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

Even dead cats bounce, the saying goes. But what does it have to do with financial markets? It turns out, quite a lot actually.

The death cross is a technical indicator which occurs when an asset’s (gold’s) short-term moving average (like the 60-day moving average) crosses below its long-term moving average (like the 200-day moving average). The death cross is the opposite of the golden cross. As the name implies, it is often associated with important downward price movement and it is considered a bearish signal. The crossover is considered more significant when accompanied by high trading volume. Once it occurs, the long-term moving average is considered a major resistance level.

Have you ever tried raising a ceiling? You can’t do that barring major home reconstruction. The debt ceiling is a different kind of animal, however. The idea is beautiful – to have a limit on how much debt the federal government can carry at any given time. If there is a debt ceiling, the government has to limit its spending.

When a household, corporation or government has an existing debt obligation, they’re expected to pay down the principal and accompanying interest. But far from every debt gets extinguished this way. Actually, most of them are paid off only thanks to taking on new debt. Call it robbing from tomorrow in order to pay for today, that’s what debt rollover is.

The debt trap is a situation in which a borrower rolls over the debt because he or she is unable to repay the principal. The cause – but also a consequence – of the debt trap are ultralow interest rates. Cheap credit makes debt financing more attractive, so everyone – households, corporations and governments – is encouraged to take on more debt. Indeed, the global debt as a percentage of the GDP has increased from around 100 percent in 1950 to almost 200 percent in 2007 and to 225 percent in 2017.

In this and our upcoming series of articles on De-Dollarization, we'll break down and explain how much validity there is to the arguments about the anticipated demise of the US Dollar.

Deflation is the opposite of inflation, so it is a decrease in prices. It may be considered negative inflation, i.e. it occurs when the inflation rate falls below zero. Two most known periods of deflation are the Great Depression in the U.S. and the Japanese deflation which started in the 1990s.

Founded in 1870. One of the major drivers of the Collateralized Debt Obligation Market prior the Great Recession. The 17th largest bank in the world by total assets. German investment bank headquartered in Frankfurt, around which there is plenty of controversies and allegations of improper behavior. Deutsche Bank. Let’s analyze its link with gold – and whether its collapse is coming, which some analyst are afraid of.

A spread in financial markets is the difference between the bid price (the price that buyers are prepared to pay) and the offer price (the price which sellers are prepared to sell at) on a financial or investment product.

Inflation, deflation, hyperinflation, reflation, stagflation…  There is a definitely an inflation of terms related to inflation. It might be confusing, but our aim is to shed light on another similar term: disinflation, with the hope of bringing in some clarity.

The divergence in monetary policies is a difference in monetary policies adopted by the world’s most systemically important central banks (i.e. the Federal Reserve System, the European Central Bank and the Bank of Japan). These central banks used to synchronize their actions, however, their monetary policies started to decouple in 2014. Investors witnessed the starkest contrast between them in December, 2015, when the European Central Bank eased its monetary policy, while the Fed raised its interest rates. The main cause of the divergence in monetary policies was the fact that the U.S. recovered more quickly than Europe after the Great Recession. Therefore, the Fed started to tighten its stance compared to the ECB’s or BOJ’s actions.

Diversification is an investment strategy that calls for spreading risk and allocating resources so as to keep them from being vulnerable to external conditions, and to be as independent from each other as possible. In short, diversification is about “not putting all your eggs in one basket.” For instance, precious metals diversification could mean purchasing not only gold, but also silver and mining stocks and mining stocks diversification means buying shares of multiple mining companies instead of just one of them. Gold diversification could refer to purchasing gold in various instruments (gold bars and gold coins instead of just one of them)There are also other ways in which one can diversify including diversification between strategies and diversification between different signal providers (analysts or investment tools).