Investment & Economics

Allocated gold is physical gold individually assigned to an owner, held separately, and kept off the custodian's balance sheet.

Allocation is the deliberate division of a portfolio across different asset classes - including precious metals - to strike the desired balance between risk and return.

A bonded warehouse is a state-approved storage facility in which goods can be held outside the customs territory of the EU without import duties or import VAT becoming due.

Bretton Woods is the international monetary system established in 1944 that pegged the US dollar to gold, named after the New Hampshire town where it was agreed.

Central bank purchases refers to the acquisition of gold reserves by national central banks to strengthen currency reserves and as a strategic hedge against currency and systemic risk.

The cost-average effect is the phenomenon whereby regular purchases of an asset at a fixed amount automatically yield a lower average price than the arithmetic mean of all the individual prices.

A crisis currency is an asset regarded as especially value-stable during periods of economic or political instability, which therefore sees rising demand in troubled times.

Diversification means spreading capital across different asset classes, regions or currencies in order to reduce the overall risk of a portfolio.

A 1933 United States decree that compelled private individuals to hand their gold to the Federal Reserve and outlawed private gold ownership for roughly four decades.

Gold mine hedging is the practice by which gold producers sell future output through forward contracts at a fixed price, in order to protect themselves against falling gold prices.

A gold savings plan is a regular investment model in which a fixed sum of money is invested at set intervals into physical gold or gold-based securities.

A monetary system in which the value of a currency is fixed to a defined quantity of gold.

Home storage means keeping precious metals in the owner's own physical custody — in a safe at home, a bank deposit box or another self-chosen location.

Inflation protection describes the ability of an asset to preserve, or even increase, the real purchasing power of the capital invested when the general price level rises.

The intrinsic value (also material value) of a precious-metal item is the pure market value of the fine metal it contains, calculated as fine weight times the current spot price.

Shares in companies that mine precious metals or other raw materials, offering leveraged exposure to the price movements of the underlying metals.

The opportunity cost of gold is the return foregone when capital tied up in gold could instead have been invested in interest-bearing or higher-yielding assets.

With a precious-metal savings plan you regularly buy gold or silver for a fixed amount — the cost-average effect smooths out the price swings along the way.

The real interest rate is the nominal rate adjusted for inflation and shows the actual change in purchasing power that a savings return delivers.

Financing firms that advance capital to mining operations and, in return, secure the right to buy future precious-metal output at a pre-agreed price or to collect a revenue-based fee.

A safe haven is an asset that holds or gains value during periods of economic or political uncertainty, while other asset classes decline.

Unallocated gold is a claim to gold against a bank or provider that is not backed by any individually assigned, physically segregated bar or coin.

Wealth protection covers the strategies and instruments used to preserve the real value of assets against inflation, currency debasement, crises and political risk.