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

Tail risk it is the risk of an asset or portfolio of assets moving more than three standard deviations from its current price. Technically, tail risks arise when the possibility that an investment will move more than three standard deviations from the mean is greater than what is shown by a normal distribution (see the chart below). To simplify, tail risks are very unlikely events which entail very serious consequences.

June 19th, 2013. Day like any other day. It was supposed to be a regular press conference and nobody, including Ben Bernanke, then the Fed Chair, expected that his boring statement on monetary policy would cause the market turmoil. Let’s look the chart below. As one can see, the U.S. 10-year bond yields surge, while the greenback appreciated strongly.

The Taylor rule is a proposed formula for how central banks should alter interest rates in response to changes in macroeconomic variables.

Technical analysis is the analysis of financial markets from the point of view of past data. In other words, technical analysis aims to prescribe in which direction the price of a given asset is more likely to move given the way this asset trades now and has traded in the past.

It’s huge. And it disturbs many people, in particular President Donald Trump. The trade deficit with China. In 2018, it reached $419 billion. Actually, the U.S. runs trade deficit not only with China. As the chart below shows, America’s trade balance is negative, which denotes a trade deficit, with the rest of the world. And this imbalance has been deepening since 1992.

It starts innocently. You just try to protect domestic industry and make your nation great again. So you impose a little tariff, just to create a level playing field with other countries. But before you know it, these other countries target your exports with retaliatory tariffs and you are in the middle of trade wars.

Trend is the general direction – up, down or sideways – in which the price of an asset is heading for a prolonged period of time.

That’s the name for a little-known, but effective and useful technique for detecting reversals. It works in many markets and to be sure that we can apply it in our analyses, we tested it on the precious metals market – it proved to be very useful.

A troy ounce (abbreviation t oz) equals approximately 31.1 grams (which is equal to 480 grains).

A turning point is a point at which the price of an asset reverses direction. Turning points tend to occur at a fixed rhythm in time, such that every X days there is a turning point for that asset. However, whether the price will form a bottom or top is not known in advance, only the timing.

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.