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

Have you been flying anywhere lately? Although most people are not afraid of plane travels anymore, they are a bit tense during landing. It's not surprising: we all fear a crash or hard landing. Fortunately, the vast majority of air travels end with a soft landing, which means that the airplane reaches the ground without difficulty or damage.

“Buy Treasuries, they are risk-free”, the pundits said. “Governments cannot go bankrupt, they can always print the money to cover their debts”, they explained. Boy, they have been wrong! Just ask the Greeks. Indeed, the European sovereign debt crisis revealed that for all to see.

Many people think that gold and bonds are in eternal competition as asset classes. But they are wrong, as evidenced by the Sovereign Gold Bonds (SGBs). They are government securities denominated in grams of gold. The SGBs were launched by the government of India in November 2015, under the Gold Monetisation Scheme. The authorities wanted to turn physical gold lying ‘idle’ in Indian households into a productive asset and reduce country’s dependability on gold imports.

The Standard & Poor’s 500 Index (S&P 500, or just S&P) is an index of the 500 largest U.S. corporations by market capitalization listed on the New York Stock Exchange or Nasdaq Composite. The relationship between stock valuations and the price of gold is widely debated, with a popular view being that the two markets have a negative correlation. But is this always the case?

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Generally, the spot price is an immediate price with settlement in two business days.

The S&P/TSX Composite Index is a stock index of about 250 largest companies on the Toronto Stock Exchange (TSX). The index was introduced in 1977 and is calculated by Standard and Poor's. The S&P/TSX is the headline index and the primary gauge of the Canadian stock market. We may say that it is the Canadian equivalent of the U.S. S&P 500 Index.

It was thought to be impossible. It was believed that it could not happen. But it occurred anyway. We don’t mean the sinking of Titanic but the sinking economy of the 1970s. We mean stagflation – something that was excluded in Keynes’s model, but it happened nevertheless, changing the global economy and the economics forever.

Stock (also referred to as equity or share) is a type of security that signifies ownership in a company and represents a claim on part of the corporation's assets and earnings. For instance, gold mining companies issue shares, which are commonly referred to as gold stocks and silver mining companies issue shares, which are commonly referred to as silver stocks.

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 be seen in the stock market.

The strike price (or exercise price) of an option is the fixed price at which the owner of the option can buy (in the case of a call option) or sell (in the case of a put option) the underlying security or commodity. The strike price is mostly used to describe stock, index or commodity options (stock strike price, S&P 500 strike price, gold strike price etc.). Listed options have clearly defined rules for strike prices, contract sizes and expiration dates. In short, upon expiration, call options are worth the difference between the price of the underlying security and the strike price (the same is the case with put options, only this time you subtract the current price from the strike price).

The summer doldrums is the silent period of trading during the summer, when traders are on mostly on vacation. For gold & silver investors, this creates both: threats and opportunities.