Explanations of "Gold" investment-related terms A to Z

Fractional-reserve banking is a banking system (currently practiced in most countries worldwide) in which only a fraction of bank deposits are backed by actual cash-on-hand and are available for withdrawal. In other words, contrary to full-reserve banking, only a fraction of a bank's demand deposits are kept in reserve and available for immediate withdrawal. Therefore, when you deposit $100, the bank will keep only a small fraction of your money in reserve and lend out the rest of your money. It implies that fractional-reserve banking expands credit and money supply beyond the amount of the underlying reserves of base money originally created by the central bank. The proponents of this system argue that fractional reserve banking allows for capital investment and economic growth in excess of what a full-reserve system would allow. The opponents believe that the fractional-reserve banking causes macroeconomic instability.

I do not think it an exaggeration to say that history is largely a history of inflation, and usually of inflations engineered by governments and for the gain of governments.

I bet you know Salma Hayek, one of the world’s most beautiful women in the world of her time. This is not an article about her, but about Friedrich Hayek, her grandfather (nah, bad joke, he was completely unrelated to Salma). We know that you might be slightly disappointed, as her artistic talent and appearance (Friedrich had a funny mustache and a large nose) are definitely more impressive. However, she loses when it comes to philosophical depth (try to guess who said that “I keep waiting to meet a man who has more balls than I do” versus “The mind cannot foresee its own advance”).

The analysis of underlying factors which might influence the price of an asset or security, or which might influence a particular market as a whole. In the world of gold and silver, fundamental analysis involves thorough examination of the surrounding environment in order to determine the forces that might have an impact on prices in the long term. Fundamental analysis is primarily interested in factors such as the overall state of the economy, the interest rate levels, the general sentiment on the market, etc. rather than in past price paths (as opposed to technical analysis).

In a futures contract two parties agree to exchange an asset (gold, currencies, stock indexes, hog bellies) for a price agreed upon today (the strike price) but with delivery to take place at a specified future date. The party agreeing to buy the underlying asset, is said to be "long" and hopes the price will go up, and the party agreeing to sell the asset is said to be "short" believing that the price will decline. Gold futures term usually refers to a futures contract that is based in the price of gold.

GATA is an organization whose aim is to investigate, expose and oppose collusion in the price of gold and related financial instruments.

The gross domestic product (GDP) is the monetary value of all finished goods and services produced within a country in a specific time period. It is also the most common measure of a nation's overall economic activity or the size of the economy. It is released quarterly by the Bureau of Economic Analysis.

Geographical diversification is the practice of diversifying an investment portfolio across different geographic regions in order to reduce the overall risk and improve returns.

Geopolitics studies geography, economics, and demographics on policy, including risks like conflicts and sanctions.

The world's fourth largest economy by nominal GDP, and the fifth largest by purchasing power parity. The third largest exporter of goods in the world and the richest country in Europe. The country famous for automotive industry, great culture and excellent beer. Germany. What are its links to the gold market?

How to analyze the gold market? Oh boy, this is not a piece of cake. There are many factors the analyst should take into account. But the most important thing is to have an appropriate theory of the gold market. As the saying goes, there is nothing more practical than a good theory!

Chemically, gold is an element with the symbol Au and atomic number 79. It belongs to noble metals and is a unique element. First of all, it is extremely rare. In the Earth’s crust, gold occurs 19 times less frequently than silver and 15 thousand times less frequently than copper. It is the only metal being yellow with a high luster, to which it owes its Latin name ‘aurum’, meaning “shining dawn.”

Gold had served as money for thousands of years until 1971 when the gold standard was abandoned for a fiat currency system. Since that time, gold has been used as an investment. Gold is often classified as a commodity. However, it behaves more like a currency. The yellow metal is very weakly correlated with other commodities and is less used in the industry. Unlike national currencies, the yellow metal is not tied to any particular country. Gold is a global monetary asset and its price reflects the global sentiment, however, it is mostly influenced by the U.S. macroeconomic conditions.