Investment & Economy

Allocated gold refers to physical gold that is individually assigned to an owner, stored separately and does not appear on the custodian's balance sheet.

Allocation refers to the deliberate division of a portfolio across different asset classes - including precious metals - in order to bring risk and return into a desired balance.

A bonded warehouse is a state-approved facility in which goods can be stored outside the duty point, so that no import duty or import VAT falls due while the goods remain there.

Bretton Woods refers to the international monetary system established in 1944 that pegged the US dollar to gold and is named after the venue in New Hampshire.

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

A crisis currency is an asset regarded as particularly stable in value during phases of economic or political instability and therefore in especially high demand.

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

A US legal order of 1933 that forced private individuals to hand over gold to the Federal Reserve and banned private gold ownership for around 40 years.

Gold mine hedging is the practice by gold producers of selling 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 in 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 refers to the physical safekeeping of precious metals by the owner themselves — in a safe at home, in a bank safe-deposit box or at another self-chosen location.

An inflation hedge is the property of an asset to preserve or increase the real purchasing power of the invested capital even when the price level is rising.

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

Shares in companies that mine precious metals or other commodities, offering a leveraged stake in the price performance of the respective metals.

The opportunity cost of gold is the foregone return that would arise if the capital tied up in gold were instead invested in interest-bearing or higher-yielding assets.

Pound-cost averaging describes the phenomenon whereby regular purchases of an asset with a constant sum automatically lead to a lower average price than the arithmetic mean of all the individual prices.

With a precious metal savings plan, you regularly buy gold or silver for a fixed amount - pound-cost averaging smooths out the price fluctuations.

The real interest rate is the nominal interest rate adjusted for the rate of inflation, and indicates the actual change in purchasing power that an investment delivers.

Financing companies that provide mines with capital up front and in return obtain the right to buy future precious-metal production at a pre-agreed price or in exchange for a revenue-based royalty.

A safe haven is an asset that retains or increases its value during periods of economic or political uncertainty, while other asset classes fall.

Unallocated gold describes a claim to gold against a bank or provider, to which no individually assigned, physically segregated bar or coin corresponds.

Wealth protection refers to strategies and instruments aimed at preserving the real value of assets against inflation, currency devaluation, crises and political risks.