Allocated Gold: Allocated gold is a designated amount of physical gold bullion that the owner stores at a secure facility under a safekeeping agreement. Because allocated gold is the owner's personal property, the vault providers can't list it as an asset. That means unallocated gold, unlike allocated gold, isn't at risk of the company's business activities. The users of OneGold services trade only allocated gold.
Bailment: The term “bailment” describes a legal contract in which one party (the “bailor”) temporary transfers the possession of their personal property to another party (the “bailee”) to keep it safe. Unlike a sale, bailment doesn't affect property ownership and changes only the possession.
Ben Bernanke: From 2006 to 2014, American economist Ben Bernanke served as the chairman of the Federal Reserve, the central bank of the United States. During his service, the Federal Reserve lowered its interest rates to zero and began a quantitative easing monetary policy to stimulate the economy. The program involved buying government bonds and other financial assets and was first introduced in 2002 to solve the economic crisis in Japan. Also known as “printing money,” quantitative easing causes the U.S. dollar to depreciate and gold prices to rise.
Bear: An analyst, a trader, or an investor who expects a financial asset's price to decrease is called a “bear.” The term “bearish” also describes this financial outlook as well as a downward trend in prices. A market with falling prices is considered a “bear market.”
Bull: A “bull” investor, trader, or analyst anticipates an uptick in prices. Therefore, a “bull market” is one with prices on the rise and achieving both higher highs and higher lows. This is the opposite of a bear market.
Central Bank Gold Agreement: The amount of gold bullion that belongs to Western European central banks makes up about 35 percent of their foreign currency reserves. Representing the 19th century Gold Standard ― a monetary system that based the value of a country's currency on the amount of gold it held ― these large gold reserves were considered excessive at the end of the 20th century.

During the long period of the price drop from the 1980s to 1990s, European central banks began to sell their gold. In 1999, Switzerland decided to sell 1,300 tons, and the United Kingdom resolved to reduce its national gold reserves by half. To prevent a steep decline in prices, central banks of Europe decided to notify each other in advance of upcoming gold sales and limited the gold sale amounts to 400 tons annually up until 2004. The banks also stopped lending gold to the market in order to discourage mining companies from borrowing gold and then selling it to hedge their future business activities.

Fifteen central banks of Europe, including the European Central Bank, the Swiss National Bank, and the Bank of England, created and signed the first Central Bank Gold Agreement (CBGA). In 2004, the second CBGA increased the annual gold sale amounts to 500 tons. By 2009, gold sales dwindled substantially due to worldwide financial turbulence, and the third CBGA dropped the annual limits to 400 tons. By the fall of 2013, gold sales amounted to only 20 tons out of a 1,600-ton four-year limit.
Chain of Integrity: The chain of integrity assures wholesale traders of the quality of large bullion bars. Every buyer knows their seller and, if needed, can trace the bars back to the metal refinery a bad piece of gold originated from. To prevent tampering and guarantee gold's quality, Good Delivery gold bars always stay inside specialized third-party vaults.

OneGold utilizes only approved vaults and carriers for storage and transportation. The company's chain of integrity makes it easy to locate the original manufacturer of bad bullion and to solve any financial disputes.
Commercial Traders: Specific to the U.S. futures market, commercial traders usually trade on behalf of businesses that manufacture metal, such as refineries, mining ventures, or bullion banks. Vulnerable to drops in gold or silver prices, these companies try to protect themselves with futures contracts.and reduce their exposure to the price of a metal in case the prices decline.
Doré: To lower shipment costs, mines make doré, an alloy of unrefined gold and silver.
European Central Bank: Since its establishment in 1998, the European Central Bank (ECB) oversees the euro, the currency of the European monetary union. The ECB sets the limits for paper money in circulation and maintains price stability in the Eurozone. The ECB's president is Mario Draghi, the former governor of the Banca d'Italia.
Exchange Traded Funds: Exchange Traded Funds (ETFs) are stock market securities that also track prices of other commodities, such as bonds or business sector indexes. Similar in structure to trusts, ETFs usually own underlying assets and distribute shares to investors.

The SPDR Gold Trust is the largest gold ETF. When gold prices reached their highest in 2011, it became the world's largest ETF. The SPDR annual fee is 0.4 percent, meaning the value of shares decreases over time. OneGold's storage fee is only 0.12 percent, and transaction fees are $8.99 per transaction.
Federal Reserve: After the 1907 Banker's Panic, the U.S. economy was in need of an “elastic currency.” To fulfill this need, the government established the Federal Reserve (the Fed) in 1913. The Fed consists of 12 member banks and 25 branches. As the national central bank, the Fed devises the country's monetary policy, handles the reserves, oversees bank-related activities, and lends resources to lenders during difficult times. The Fed's policies directly affect the dollar value and the demand and prices for gold and silver.
Fineness: Fineness is the purity measure for investment gold. For almost pure 24-carat gold, fineness is 0.995 (995 parts per thousand), which is the minimum level of purity by the Good Delivery standard. Bullion coins are usually 999 fine. Wholesale traders charge only for fine gold content (weight x fineness). The wholesale standard for silver is different: 9999 fine.
Gold Futures: A gold future is an agreement to trade a certain amount of gold at a fixed price sometime in the future. Trading of futures contracts takes place at well-established exchanges, like the U.S. Comex or Shangai Gold Exchange.
Good Delivery: Good Delivery bars come from a small number of accredited refineries and are kept in approved storage facilities. Once the owner withdraws them, the chain of integrity breaks and the bars lose their Good Delivery status.

The term “Good Delivery” is usually associated with London Good Delivery, an internationally recognized standard for gold, although other markets, like the Comex futures exchange, have their own lists of accredited refiners.

Good Delivery bars undergo thorough testing to ensure they comply with fineness, shape, weight, and marking requirements. The chain of integrity guarantees the purity of London Good Delivery gold is at least 99.5 percent. Professional traders trade only pure gold content, or fine gold.
Hedging: In the financial sense, hedging refers to a strategy that helps investors protect themselves from the market's effects on their asset. Investors can reduce their risk if they take the same or opposite position with futures contracts. If you own gold and are afraid it will go down in price, you could sell futures contracts, because they'll appreciate as gold prices fall. With this strategy, you cover your loss with profit (creating the “hedge").

In commerce, manufacturers of a raw material or product use hedging strategies all the time. The gold mining sector took advantage of “producer hedging” during the price drop in the 1980s and 1990s. In anticipation of continuous price reduction, the gold mining industry borrowed and sold 3,100 tons of gold by 2001, and thus locked its prices. As gold prices picked up, some miners lost money and began buying gold back. The mining industry hedging ended in 2011 when gold prices reached their historic high.
Inflation: Inflation is a general rise in prices, leading to the decline of the purchasing power of money. Because $100 today is worth less than it was 10 years ago, for example, the amount of goods you can purchase with today's money is significantly less than the amount you could in the past. As the dollar drops in value, investors begin purchasing gold or silver as the safer and more stable asset that can preserve its value over time.
Kilobar: A kilobar is a standard investment gold bar size in India and China. Kilobars are made from the large Good Delivery bars, which are typical for wholesale markets and weigh 400 troy ounces. The Chinese market demands a higher purity of gold: While London accepts fineness of 0.995, the Chinese market's standard is 0.999.
London Bullion Market Association: As the international wholesale market for gold and silver, the London Bullion Market Association (LBMA) provides buyers and sellers with the services essential for the effective trading of large gold bars, such as banking, trading, secure storage, and transportation. To make sure that wholesale gold bars are of the highest quality and meet the shape, weight, markings, and fineness requirements, the LBMA carefully chooses which bullion producers can go on the Good Delivery List. The list contains only accredited refineries that the London market approves.

The LBMA consists of nine international investment banks. As the members of the LBMA, the banks provide quotes of buy and sell prices for gold and silver, deposited in one of London's approved safe storage facilities every day.
Long: When a trader purchases an asset or a derivative contract on the underlying asset and expects to make a profit when the asset's price increases, he or she is “long” or holds “a long position.” If you own physical gold or have gold futures contracts or options, the value of which you anticipate will appreciate as gold prices rise, you are “long (of) gold.”
Nonreportable: Large speculators who trade gold and silver futures contracts on the U.S. Comex market must declare their positions to the Commodity Futures Trading Commission on a weekly basis. The same requirement applies to commercial traders who use the futures market to hedge their business activities. However, small speculators aren't required to disclose their trading activity. As a group, these small traders make up the “nonreportable” traders' category and are included in the weekly Commitment of Traders report.
Produits Artistiques Métaux Précieux: Produits Artistiques Métaux Précieux (PAMP) is a refiner of precious metals; it was founded in 1977, is located in Ticino, Switzerland, and holds membership at the LBMA. It's also on the limited list of refiners that specialize in precious metals and manufacture 400-troy ounce Good Delivery gold bars. PAMP also makes the Fortuna 100-gram gold bars.
Paper Gold: “Paper gold” is a term that gained popularity in the sphere of internet blogging in recent years and is an investment instrument that correlates with gold prices. Paper gold investors do not own a physical supply of gold; rather, they own a promissory note to receive physical gold.

Usually, paper gold refers to U.S. gold futures and options contracts. In a nutshell, these are bets on price movements either up or down. You may settle your futures contracts with physical gold; however, in the majority of cases, investors redeem their futures contracts for cash. Various sources also mention exchange-traded gold funds when describing the term “paper gold,” although major gold ETFs on the market are backed by physical gold.
Position: A position is the amount of money that a trader invested in an asset. If you anticipate that the price on your asset will rise, you hold a long position. On the contrary, if you expect to profit from the price decline on the asset, you hold a short position. By varying how much of an asset they hold, investors can make their position smaller or larger.
Premium: A physical gold market premium refers to a charge on top of London prices and is typical for major trade institutions in Asia. Taking into account the local economic situation, the amount of premium is usually set in U.S. dollars per ounce. The premium increases when demand for gold rises faster than gold can be delivered. Before arriving in Asia as kilobars, Good Delivery gold bars must first travel from the physical gold market in London to Switzerland. There, Swiss refineries make them into kilobars and then send them only to Asia.
Rally: A rally refers to a sustained increase in the price of assets, such as gold, securities, commodities, or currencies.
Resistance: A technical term for price charts analysis, “resistance” refers to a certain point on a chart, after which the prices won't grow anymore. To find the point of resistance on the chart, an analyst will typically consider price behavior in the past and identify the point at which prices stopped rising. However, if prices continue to rise past the predicted resistance level, this resistance point could become a new “support.” A support is the lowest point of a price drop.
Speculative Position: Inherent to the U.S. futures market, “a speculative position” is a technical term that describes positions of gold or silver futures speculators who aren't involved in the precious metals industry and aren't interested in hedging their positions. Unlike commercial traders, speculative traders try to benefit from guessing whether prices will grow or decline. They will purchase futures contracts if they expect an increase in prices or sell their futures contracts if a price drop is anticipated instead.

The "speculative net long position" considers bets of all traders. To calculate it, you need to subtract the number of short contracts purchased by noncommercial investors from the total number of long contracts that all speculators hold. In the derivative contracts market, speculative net long positions usually reflect the short-term attitudes.
S&P 500: Founded in 1954 by the U.S. credit rating agency Standard & Poor's, the S&P 500 is an American stock index. Its value reflects the market capitalization of the 500 largest publicly traded corporations in the United States. To make it on the list of S&P 500 and to represent the U.S. business sector, a company must be worth at least $4 billion, the public must own at least half of its shares, and shares must cost at least a dollar each.
Short Position: When an investor sells an asset that he or she doesn't own and plans to buy it back later at a reduced price, he or she engages in a short sale. The investor's goal in this situation is to benefit from a decrease in prices. To attain a short position, a trader borrows an asset and then sells it or purchases a derivative contract. A short position is the opposite of a long position.
Support: Support is a technical term used in price charts analysis. It indicates the lowest price point, below which prices don't fall (according to past price behavior).
Troy Ounce: A troy ounce is a standard unit of measure that English-speaking countries of the Western Hemisphere commonly use to weigh and price precious metals. Originating from Troyes, France, the troy ounce is larger than an imperial ounce and weighs 1.097 of a regular ounce. The London physical market and New York futures market quote their prices in troy ounces.
Treasury Bond: To finance its spending, the U.S. government issues fixed-income Treasury bonds (T-bonds). As T-bonds are traded in the securities market, their prices will go up or down, depending on interest rates, inflation levels, the demand for “safe haven” investments during the stock market's difficult times, and the current U.S. debt. Treasury bondholders receive fixed interest income every year. At the time of the bonds' maturity, the U.S. government pays investors the principal value and makes all payments in U.S. dollars.
Unallocated Gold: Unallocated gold refers to an investment organization's accounting record, detailing how much gold they owe an investor. On a bank's books, this gold is a liability to an investor. Unallocated gold is the same as gold “accounts.” The holders of unallocated gold are essentially unsecured bank's creditors.
World Gold Council: The World Gold Council is a nonprofit association that devises strategies for growth and development of the gold markets. It consists of the 23 largest international gold mining companies, which produce about 60 percent of corporate gold worldwide.

The World Gold Council collaborates with the technology, investment, and jewelry industries and advises on government affairs. The organization's goal is to set the industry's standards as well as maintain and increase demand for gold.
World Platinum Investment Council: The World Platinum Investment Council was founded by the six platinum production leaders in order to establish the demand and to grow the market for platinum investments.

To attract investors of physical platinum, the World Platinum Investment Council teams up with refineries, producers, financial organizations, and other businesses. It designs platinum investment instruments and performs thorough research to help investors gain a deep understanding and knowledge of investment industry and trends.
What Next?: This information is for informational and reference purposes only. Past performance is no guarantee of future results. We encourage you to consult with a financial expert to determine the best investment strategy for your individual situation.