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

Chemically, platinum is an element with the symbol Pt and atomic number 78. It belongs to noble metals, being one of the rarer elements in Earth's crust. Platinum is also a member of the family of platinum group metals (PGMs) which also includes palladium, rhodium, iridium, osmium, and ruthenium. It is the least reactive metal and, as other precious metals, it resists corrosion. Due to its malleability and ductility (and resistance to wear and tarnish), platinum is also widely used in the jewelry industry as a substitute for gold. Platinum is silver to dark steel-grey in color, which probably explains why it is often mistaken for silver. Actually, its name derives from the Spanish platina, literally meaning “little silver”.

Platinum has never practically served as money (except for a short period in Russia, where platinum coins were used as a regular national currency), but it is used an investment. Because it is a precious metal, platinum often trades directionally with gold. However, platinum is much more widely used in the industry; therefore, it behaves more like a commodity and it is more business cycle-sensitive than gold or even silver.

How much does platinum 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 platinum per ounce is. But how much does it cost to produce it?

The platinum-to-palladium ratio is the price of platinum divided by the price of palladium. The indicator works just as the gold-to-silver ratio, the gold-to-platinum ratio or the gold-to-palladium ratio, and it shows how many ounces of palladium one ounce of platinum can buy. It measures the relative strength of platinum prices compared to palladium prices. When the ratio is low, it means that platinum is undervalued relative to palladium. When the ratio is high, it means that platinum is overvalued relative to palladium. Investors can thus use the ratio as a timing indicator deciding when to reallocate investment positions between these two precious metals.

The PMI Index is an important indicator of economic health. It is compiled and released monthly by the Institute for Supply Management. The ISM sends surveys to senior executives at more than 400 companies, asking managers about monthly changes in business conditions in five major areas:  new orders, inventory levels, production, supplier deliveries, and employment. Contrary to Markit Economics PMI’s, the ISM weighs each of these survey areas equally.

Abbreviation for Precious Metals Stock.

Point optimization requires solving problems concerning the maximization or minimization of a real function by checking all available alternatives (variables), and thereby discovering the best available solution.

The idea of a political business cycle is one of the theories of the business cycle, formulated in the 1970s. According to it, political incumbents try to juice up the economy during election years to improve their chances of re-election. They stimulate the economy just before an election to increase their odds of remaining in office, while reversing the course and restricting the fiscal and monetary stimuli shortly after the elections (to avoid harmful long-term consequences). Thus, major elections produce economic booms and busts, as politicians try to create an artificial boom before every election and take advantage of the voters' short-sightedness. Similarly, theory and history suggest that the U.S. central bank tries to avoid, if possible, any major monetary actions as an election approaches.

A portfolio diversifier is a portfolio addition which reduces the overall risk in a portfolio. This is an important feature, since diversification allows investor to obtain a desired return without taking as much risk as with an individual security.

The pound sterling is the official currency of the United Kingdom (and some British Crown Dependencies or Overseas Territories, such as Jersey, Guernsey, the Isle of Man, Gibraltar, South Georgia and the South Sandwich Islands, Saint Helena, Ascension and Tristan da Cunha, or the claimed British Antarctic Territory). The currency is managed by the Bank of England, based in London. Its international code is “GBP”, while its symbol is £. 

The Producer Price Index (PPI) measures the average change in the price of a basket of representative goods and services sold by manufacturers and producers in the wholesale market (this is why it was known in the U.S. as the Wholesale Price Index up to 1978).

A precious metal is defined as a rare, naturally occurring chemical element that has high economic value and is chemically resistant. In the past, precious metals served as a currency. Now they are an investment or industrial commodity.