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

Money, it’s gas, as Pink Floyd sang and as we all know. But it’s also a medium of exchange which enables economic calculation and our sophisticated civilization. Over history, a lot of things were used as money, including cattle or salt, but precious metals dominated as a medium of exchange.

The money supply is the total amount of money available in an economy at a particular point in time. The quantity of money is probably the most important concept in economic theory, since it affects the price level. The increase in money supply causes price inflation, while the decrease in money supply leads to price deflation.

A type of a loan secured by real estate. A mortgage deal involves at least two sides: the borrower (typically a home buyer) and the lender (usually a financial institution). The lender provides the borrower with financial means necessary to buy a specific property. The borrower agrees to pay interest on the loan and uses the property as collateral. The deal might encompass various intermediaries between the lender and the borrower.

A moving average (rolling average, rolling mean, running average, MA) is the average of the closing price of a security over a specified period of time. It smoothes short-term price fluctuations, thus giving a clearer picture of the trend. The 50-day and 200-day moving averages are quite often used as support and resistance levels for gold, silver and mining stocks.

Did you know that states, counties, or municipalities also can issue bonds? These bonds are called “municipal bonds”. As they are issued by local governments, they are mainly used to finance infrastructure projects such as the construction of highways, bridges or schools.

Natural interest rates often equal to the neutral interest rate in many investors' minds, but this is a mistake as they are important differences between the two. The latter is treated as the real interest rates that is consistent with output reaching its potential and stable inflation, while the former is an interest rate that reflects the time preference of market participants and allocates resources among the temporally defined stages of production. In other words, it is an equilibrating interest rate consistent with intertemporal consumption preferences and production plans.

Net Asset Value (NAV) is the value of an entity's assets minus the value of its liabilities. It is most commonly used in reference to mutual funds or exchange traded funds (ETFs) and calculated on a per-share basis. ETFs calculate the NAV at 4 p.m. EST, after the markets have closed.

Many years ago, Walter Bagehot noted that “John Bull can stand many things, but he cannot stand two per cent.” Well, since the Great Recession, he has had to stand yields well below that. Actually, in many countries, investors have to stand interest rates below zero. How logical is that?

The key concept in modern central banking. And its fatal flaw. The neutral rate of interest, often depicted as r-star (r*). In  the mainstream macroeconomic modeling, the neutral interest rate is treated as the real interest rates that is consistent with output equaling potential and stable inflation.

Newmont Mining Corporation (ticker symbol: NEM) is a U.S. based gold mining company, one of the largest gold producers in the world. It is the only gold sector company represented in the Standard & Poor's 500 Index.

The Nikkei 225, also called the Nikkei Stock Average or simply the Nikkei, is a stock index of 225 blue-chip companies traded on the Tokyo Stock Exchange. The index has been calculated since September 1950, retroactive to May 1949, by the Nikkei, officially called The Nihon Keizai Shinbun, the world's largest financial newspaper. The Nikkei, which is the oldest stock index in Asia, is the headline index and the primary gauge of the Tokyo stock market. It may be described as the Japanese equivalent of the U.S. Dow Jones.

A negative interest-rate policy (NIRP) is a monetary policy maintaining nominal short-term interest rates below zero. The global financial crisis that began in 2007 prompted major central banks to take unconventional policy measures. One of them was the reduction of short-term interest rates to about zero. However, as ZIRP was found to be ineffective, some central banks introduced NIRP. By January 2016, negative interest rates were set by the Bank of Japan, the Central Bank of Denmark, the European Central Bank (see the chart below), the Swedish Riksbank and the Swiss National Bank.