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

The Gold Miners Bullish Percent Index ($BPGDM) is a gauge of overbought and oversold conditions for the gold mining sector. It is a breadth indicator based on the number of stocks with Point & Figure buy signals (a Point & Figure chart emphasizes strong moves while ignoring small ones) within this index.

Gold is one of the rarest elements in the world. Gold is estimated to make up about 0.003-0.004 parts per million of the earth’s crust. It means that, gold occurs in it about 19 times less frequently than silver and 15 thousand times less frequently than copper. In 2017, global gold mine production was 3,305 tons. That supply was mined in many locations (that geographical dispersion is one of the reasons why gold was historically used as money). But what countries produce the most gold?

How much does gold cost? Why are you asking about it? Just look at kitco.com and do not bother us! Yeah, sure, we know what the price of gold per ounce is. But how much does it cost to produce it?

Shortage is a sad state in which something needed cannot be obtained in sufficient amounts. Demand exceeds supply. Shortages were very common in the communist economies, as prices were controlled by governments and couldn’t rise to clear the market. Fortunately, in a free market without government interventions in the price mechanism, shortages occur rather seldom and are temporary.

Trading gold-silver ratio can earn you money while you remain invested in the precious metals at all times - that's the first and foremost reason why every gold and silver investor should know more about this ratio. Here's the gold to silver ratio explained.

Purchasing power is the number of goods and services that can be bought by a certain good or asset. Usually, we measure the purchasing power of fiat currencies, as people are generally paid in and use them in their daily life. For example, the purchasing power of the greenback measures how many goods or services one U.S. dollar can purchase.

Gold standard is a monetary system wherein the value of domestic currencies is fixed to a certain amount of gold. National money including bank deposits and bank notes is convertible to gold at a fixed price. Gold is used as the standard because of its durability, rarity, and universal acceptance. When it is used as part of the hard-money system, it reduces the volatility of currencies.

Some things tend to repeat themselves. Summers are almost always more warm than winters. The rainfall usually peaks during specific months of the year. Birds migrate in the anticipation of the fall. But seasonality, this inherent tendency of repetition, is not restricted to the weather or wildlife. It turns out that seasonal patterns might be seen in gold stocks.

The price of gold, as each price, is determined by the market forces of demand and supply. The supply is the amount of a good offered for sale at each price. Therefore, the gold supply is the amount of gold offered for sale at a given price. The gold supply in that sense should not be confused with the annual supply of gold widely analyzed by many analysts (we will explain this later). The annual supply of gold comes from recycling, net hedging and mining production.

The gold-to-palladium ratio is the price of gold divided by the price of palladium. The indicator works just as the gold-to-silver ratio or gold-to-platinum ratio and it shows how many ounces of palladium one ounce of gold can buy. It measures the relative value of gold and palladium, indicating whether gold or palladium are undervalued or overvalued relative to each other. When the ratio is low, it means that gold is undervalued relative to palladium. When the ratio is high, it means that gold is overvalued relative to palladium. Investors can thus use the ratio as a timing indicator deciding when to rebalance their positions in gold and palladium.

The gold-to-platinum ratio is the price of gold divided by the price of platinum. It describes how many ounces of platinum are needed to purchase one ounce of gold, indicating the relative strength of gold prices compared with platinum prices. The indicator works just as the gold-to-silver ratio and it shows whether gold is undervalued or overvalued relative to platinum (and vice versa). When the ratio is low, it means that platinum is overvalued relative to gold. When the ratio is high, it means that platinum is undervalued relative to gold. Investors can thus use the ratio as a timing indicator deciding when to buy gold or platinum, or which metal to buy at any given time.

The gold window was an informal name for a two-tiered system of gold pricing. After the collapse of the London Gold Pool in March 1968, the U.S. and several other nations established a two-tier gold system. There was an official tier, in which central banks could buy and sell at the official price of $35 per ounce, and a private market, when gold was freely traded at market prices. The aim of the system was to prevent speculative profits from any rise in the official price of gold (there was a risk that the U.S. might devalue the dollar).