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

Twin deficit identity is used to refer to a nation’s current account deficits and a simultaneous fiscal deficit. The term became widely used in the 1980s until the 1990s because the United States experienced the “twin” deficits during this timeframe. However, there is no reason why current account deficits and government budget deficits occurs at the same time. The term “twin deficit” is now mostly used to refer to the relationship between the country’s current account deficit and fiscal deficit. It's one of the reasons due to which the precious metals market is likely take off in the coming years.

Unconventional monetary policy is a monetary policy which directly targets the cost and availability of external financing to banks, households and non-financial companies.

It leads to anxiety disorders, depression, increased alcohol consumption or even drug addiction. And it causes 45,000 suicides a year globally. So you definitely do not want to experience it. To be unemployed. It means that a person wants to work, seeks for a job, but cannot find it. Some people, for whatever reasons, are, unfortunately, unemployed. To determine whether many or few people in a particular economy are unemployed, we use the unemployment rate, which is a percentage of unemployed individuals in the total labor force (employed and unemployed people).

We don’t need to explain what the United States is. Everyone knows that it is the world’s leading economy and military power, one of the wealthiest and the freest places on earth. However, its links to gold are less known. So let’s analyze what is America’s impact on the gold market.

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 transpire into the forex market and provide suggestions for the U.S. dollar.

Velocity means speed. And indeed, velocity of money refers to how fast money changes hands and how fast it passes from one holder to the next. It is commonly defined as the rate at which money is exchanged from one transaction to another. Simply put, the velocity of money is the number of times one dollar is spent to buy goods and services per unit of time.

Volatility is the relative rate at which the price of a security moves up and down. The more the price moves up and down, the more volatility it is considered to have.

Volume is the overall sum of all transactions executed in the market (or a single company's stock) during a given period of time, which shows us market power (importance). In case of gold futures market, the gold volume represents the amount of contracts that were traded in a given period. The greater the volume, the more powerful the market. Volume plays a significant role in the confirmation of a suggested price movement.

The World Gold Council (WGC) is the market development organization for the gold industry, based in London. It is a non-profit association of the world's leading gold producers, set up to provide industry leadership and stimulate the demand for gold. For example, the WGC is the creator of the first gold ETF.

The Philadelphia Gold and Silver Index (XAU Index) is a market capitalization index of precious metal mining company stocks. As its name suggests it includes both gold and silver mining companies.

The yen is the currency of Japan, officially adopted in 1871. The word “yen” means “circle” or “round object”. The currency is managed by the Bank of Japan, based in Tokyo, and it is one of the most difficult national currencies to counterfeit. Its international code is “JPY”. Just like the U.S. dollar or the euro, the yen is fiat money. Since it is a currency of one of the largest economies in the world, the yen is used as a reserve currency along with the U.S. dollar, the euro, and the pound sterling. It is also the third most traded currency in the foreign exchange market, after the greenback and the euro. Indeed, it is the second most widely held currency, after the U.S. dollar. The USD/JPY is also one of the most popular pairs forex trading.

The old joke is that the stock market has predicted 9 out of the last 5 recessions. However, the yield curve have much better accuracy, as nine inversions of the yield curve since 1953 predicted eight recessions and one credit crunch followed by economic slowdown.