Economic crises such as the one brought about by the Covid-19 pandemic highlight the concept of safe-haven assets, which are the ones investors turn to, moving away from other riskier assets, to maintain their assets. Traditionally, certain currencies such as the Swiss franc or precious metals have been considered as the ideal haven assets. But in recent years, the rise of cryptocurrencies like Bitcoin has led some analysts to suggest that they may be the safe haven assets of the future. In this post we are going to explain why bitcoin cannot replace the value as a refuge for gold.
The highs reached by Bitcoin in recent years have been spectacular, far exceeding the recent highs reached by gold.
That has led some analysts to raise the question of whether Bitcoin and other cryptocurrencies could replace the precious metal as a haven asset in the coming years. Much has been written for and against this thesis.
Quotation
To compare both assets, the first thing to do is consider their revaluation so far this year. Gold started 2020 at $1,527.10 an ounce and on November 9 it was trading at $1,867.30 , that is, a rise of 22.28%.
In the case of Bitcoin, it was trading at $6,966 on January 2 and at 15,335 on November 9: a revaluation of 120.14%.
The absolute figures tip the balance towards Bitcoin. However, one variable must be taken into account: volatility.
While gold has been on a steady upward trajectory since the beginning of the year, the cryptocurrency has experienced rises and falls ranging from -30% to +82% above the average price.
Figures that would affect the portfolio of an investor who decided to entrust part of their money to Bitcoin and that no one, in their right mind, would want for an asset whose objective is to act as a refuge.
When it comes to investing in a refuge asset, movements such as those registered by Bitcoin cause more fear than confidence. Investors who go to a safe haven do so to protect their wealth from adverse market conditions rather than to earn money. So the main objective is to maintain security in your investments.
Advantages and disadvantages
Despite this, it cannot be denied that Bitcoin has some advantages as an investment asset. One of them is its decentralization : no bank, country or entity owns or issues it, so it is free from the pressures of any of them and the effect of economies, which gives it a certain advantage over other assets.
Although gold is also independent and does not constitute anyone’s responsibility, it is somewhat affected by the global economy and investors’ decisions move based on the state of the main economic powers.
In both cases, Bitcoin and gold are limited resources , which have a cost associated with extracting or mining them. Both are divisible into very small quantities. But there is something that gold has that Bitcoin lacks: intrinsic value.
Gold is a luxury good, a raw material known throughout the world and accepted by all, because it has its own value, attributable to a metal that has been considered wealth for tens of centuries.
On the other hand, Bitcoin lacks intrinsic value : it is only used to buy goods and services, but there are not many people who want to collect their salary in this cryptocurrency.
The conclusion reached by the FXStreet article is that while Bitcoin and gold have many similarities, there are also many differences between them:
“Gold is the main safe haven asset and that is something that is not going to change. Investors know this and appreciate gold for its great intrinsic value, which Bitcoin, however, lacks. So no, Bitcoin is not going to replace gold as a safe haven asset .
JPMorgan , one of the world’s leading investment banks, has recently pronounced in this sense . In one of its publications aimed at investors, ‘Flows & Liquidity’ , the entity’s analysts point out that it is more appropriate to classify Bitcoin as a risk asset than as a refuge asset, due to the growing positive correlation, since the past month of March, of the cryptocurrency with the US stock index S&P 500 .
According to this report:
“Bitcoin’s role is more a reflection of the need for an alternative currency than a safe haven or protection asset . “
In the opinion of analysts, the market capitalization of Bitcoin would have to increase tenfold to match the private sector’s investment in gold. So it is clear: although it has qualities that may be interesting for investors at certain times, Bitcoin is not an alternative to gold as a safe haven asset.
…
The post The Reasons Why Bitcoin Can Never Replace Gold appeared first on Best Gold IRA Companies.
[content] => Array ( [encoded] =>Economic crises such as the one brought about by the Covid-19 pandemic highlight the concept of safe-haven assets, which are the ones investors turn to, moving away from other riskier assets, to maintain their assets. Traditionally, certain currencies such as the Swiss franc or precious metals have been considered as the ideal haven assets. But in recent years, the rise of cryptocurrencies like Bitcoin has led some analysts to suggest that they may be the safe haven assets of the future. In this post we are going to explain why bitcoin cannot replace the value as a refuge for gold.
The highs reached by Bitcoin in recent years have been spectacular, far exceeding the recent highs reached by gold.
That has led some analysts to raise the question of whether Bitcoin and other cryptocurrencies could replace the precious metal as a haven asset in the coming years. Much has been written for and against this thesis.
Quotation
To compare both assets, the first thing to do is consider their revaluation so far this year. Gold started 2020 at $1,527.10 an ounce and on November 9 it was trading at $1,867.30 , that is, a rise of 22.28%.
In the case of Bitcoin, it was trading at $6,966 on January 2 and at 15,335 on November 9: a revaluation of 120.14%.
The absolute figures tip the balance towards Bitcoin. However, one variable must be taken into account: volatility.
While gold has been on a steady upward trajectory since the beginning of the year, the cryptocurrency has experienced rises and falls ranging from -30% to +82% above the average price.
Figures that would affect the portfolio of an investor who decided to entrust part of their money to Bitcoin and that no one, in their right mind, would want for an asset whose objective is to act as a refuge.
When it comes to investing in a refuge asset, movements such as those registered by Bitcoin cause more fear than confidence. Investors who go to a safe haven do so to protect their wealth from adverse market conditions rather than to earn money. So the main objective is to maintain security in your investments.
Advantages and disadvantages
Despite this, it cannot be denied that Bitcoin has some advantages as an investment asset. One of them is its decentralization : no bank, country or entity owns or issues it, so it is free from the pressures of any of them and the effect of economies, which gives it a certain advantage over other assets.
Although gold is also independent and does not constitute anyone’s responsibility, it is somewhat affected by the global economy and investors’ decisions move based on the state of the main economic powers.
In both cases, Bitcoin and gold are limited resources , which have a cost associated with extracting or mining them. Both are divisible into very small quantities. But there is something that gold has that Bitcoin lacks: intrinsic value.
Gold is a luxury good, a raw material known throughout the world and accepted by all, because it has its own value, attributable to a metal that has been considered wealth for tens of centuries.
On the other hand, Bitcoin lacks intrinsic value : it is only used to buy goods and services, but there are not many people who want to collect their salary in this cryptocurrency.
The conclusion reached by the FXStreet article is that while Bitcoin and gold have many similarities, there are also many differences between them:
“Gold is the main safe haven asset and that is something that is not going to change. Investors know this and appreciate gold for its great intrinsic value, which Bitcoin, however, lacks. So no, Bitcoin is not going to replace gold as a safe haven asset .
JPMorgan , one of the world’s leading investment banks, has recently pronounced in this sense . In one of its publications aimed at investors, ‘Flows & Liquidity’ , the entity’s analysts point out that it is more appropriate to classify Bitcoin as a risk asset than as a refuge asset, due to the growing positive correlation, since the past month of March, of the cryptocurrency with the US stock index S&P 500 .
According to this report:
“Bitcoin’s role is more a reflection of the need for an alternative currency than a safe haven or protection asset . “
In the opinion of analysts, the market capitalization of Bitcoin would have to increase tenfold to match the private sector’s investment in gold. So it is clear: although it has qualities that may be interesting for investors at certain times, Bitcoin is not an alternative to gold as a safe haven asset.
The post The Reasons Why Bitcoin Can Never Replace Gold appeared first on Best Gold IRA Companies.
) [summary] =>Economic crises such as the one brought about by the Covid-19 pandemic highlight the concept of safe-haven assets, which are the ones investors turn to, moving away from other riskier assets, to maintain their assets. Traditionally, certain currencies such as the Swiss franc or precious metals have been considered as the ideal haven assets. But in recent years, the rise of cryptocurrencies like Bitcoin has led some analysts to suggest that they may be the safe haven assets of the future. In this post we are going to explain why bitcoin cannot replace the value as a refuge for gold.
The highs reached by Bitcoin in recent years have been spectacular, far exceeding the recent highs reached by gold.
That has led some analysts to raise the question of whether Bitcoin and other cryptocurrencies could replace the precious metal as a haven asset in the coming years. Much has been written for and against this thesis.
Quotation
To compare both assets, the first thing to do is consider their revaluation so far this year. Gold started 2020 at $1,527.10 an ounce and on November 9 it was trading at $1,867.30 , that is, a rise of 22.28%.
In the case of Bitcoin, it was trading at $6,966 on January 2 and at 15,335 on November 9: a revaluation of 120.14%.
The absolute figures tip the balance towards Bitcoin. However, one variable must be taken into account: volatility.
While gold has been on a steady upward trajectory since the beginning of the year, the cryptocurrency has experienced rises and falls ranging from -30% to +82% above the average price.
Figures that would affect the portfolio of an investor who decided to entrust part of their money to Bitcoin and that no one, in their right mind, would want for an asset whose objective is to act as a refuge.
When it comes to investing in a refuge asset, movements such as those registered by Bitcoin cause more fear than confidence. Investors who go to a safe haven do so to protect their wealth from adverse market conditions rather than to earn money. So the main objective is to maintain security in your investments.
Advantages and disadvantages
Despite this, it cannot be denied that Bitcoin has some advantages as an investment asset. One of them is its decentralization : no bank, country or entity owns or issues it, so it is free from the pressures of any of them and the effect of economies, which gives it a certain advantage over other assets.
Although gold is also independent and does not constitute anyone’s responsibility, it is somewhat affected by the global economy and investors’ decisions move based on the state of the main economic powers.
In both cases, Bitcoin and gold are limited resources , which have a cost associated with extracting or mining them. Both are divisible into very small quantities. But there is something that gold has that Bitcoin lacks: intrinsic value.
Gold is a luxury good, a raw material known throughout the world and accepted by all, because it has its own value, attributable to a metal that has been considered wealth for tens of centuries.
On the other hand, Bitcoin lacks intrinsic value : it is only used to buy goods and services, but there are not many people who want to collect their salary in this cryptocurrency.
The conclusion reached by the FXStreet article is that while Bitcoin and gold have many similarities, there are also many differences between them:
“Gold is the main safe haven asset and that is something that is not going to change. Investors know this and appreciate gold for its great intrinsic value, which Bitcoin, however, lacks. So no, Bitcoin is not going to replace gold as a safe haven asset .
JPMorgan , one of the world’s leading investment banks, has recently pronounced in this sense . In one of its publications aimed at investors, ‘Flows & Liquidity’ , the entity’s analysts point out that it is more appropriate to classify Bitcoin as a risk asset than as a refuge asset, due to the growing positive correlation, since the past month of March, of the cryptocurrency with the US stock index S&P 500 .
According to this report:
“Bitcoin’s role is more a reflection of the need for an alternative currency than a safe haven or protection asset . “
In the opinion of analysts, the market capitalization of Bitcoin would have to increase tenfold to match the private sector’s investment in gold. So it is clear: although it has qualities that may be interesting for investors at certain times, Bitcoin is not an alternative to gold as a safe haven asset.
…
The post The Reasons Why Bitcoin Can Never Replace Gold appeared first on Best Gold IRA Companies.
[atom_content] =>Economic crises such as the one brought about by the Covid-19 pandemic highlight the concept of safe-haven assets, which are the ones investors turn to, moving away from other riskier assets, to maintain their assets. Traditionally, certain currencies such as the Swiss franc or precious metals have been considered as the ideal haven assets. But in recent years, the rise of cryptocurrencies like Bitcoin has led some analysts to suggest that they may be the safe haven assets of the future. In this post we are going to explain why bitcoin cannot replace the value as a refuge for gold.
The highs reached by Bitcoin in recent years have been spectacular, far exceeding the recent highs reached by gold.
That has led some analysts to raise the question of whether Bitcoin and other cryptocurrencies could replace the precious metal as a haven asset in the coming years. Much has been written for and against this thesis.
Quotation
To compare both assets, the first thing to do is consider their revaluation so far this year. Gold started 2020 at $1,527.10 an ounce and on November 9 it was trading at $1,867.30 , that is, a rise of 22.28%.
In the case of Bitcoin, it was trading at $6,966 on January 2 and at 15,335 on November 9: a revaluation of 120.14%.
The absolute figures tip the balance towards Bitcoin. However, one variable must be taken into account: volatility.
While gold has been on a steady upward trajectory since the beginning of the year, the cryptocurrency has experienced rises and falls ranging from -30% to +82% above the average price.
Figures that would affect the portfolio of an investor who decided to entrust part of their money to Bitcoin and that no one, in their right mind, would want for an asset whose objective is to act as a refuge.
When it comes to investing in a refuge asset, movements such as those registered by Bitcoin cause more fear than confidence. Investors who go to a safe haven do so to protect their wealth from adverse market conditions rather than to earn money. So the main objective is to maintain security in your investments.
Advantages and disadvantages
Despite this, it cannot be denied that Bitcoin has some advantages as an investment asset. One of them is its decentralization : no bank, country or entity owns or issues it, so it is free from the pressures of any of them and the effect of economies, which gives it a certain advantage over other assets.
Although gold is also independent and does not constitute anyone’s responsibility, it is somewhat affected by the global economy and investors’ decisions move based on the state of the main economic powers.
In both cases, Bitcoin and gold are limited resources , which have a cost associated with extracting or mining them. Both are divisible into very small quantities. But there is something that gold has that Bitcoin lacks: intrinsic value.
Gold is a luxury good, a raw material known throughout the world and accepted by all, because it has its own value, attributable to a metal that has been considered wealth for tens of centuries.
On the other hand, Bitcoin lacks intrinsic value : it is only used to buy goods and services, but there are not many people who want to collect their salary in this cryptocurrency.
The conclusion reached by the FXStreet article is that while Bitcoin and gold have many similarities, there are also many differences between them:
“Gold is the main safe haven asset and that is something that is not going to change. Investors know this and appreciate gold for its great intrinsic value, which Bitcoin, however, lacks. So no, Bitcoin is not going to replace gold as a safe haven asset .
JPMorgan , one of the world’s leading investment banks, has recently pronounced in this sense . In one of its publications aimed at investors, ‘Flows & Liquidity’ , the entity’s analysts point out that it is more appropriate to classify Bitcoin as a risk asset than as a refuge asset, due to the growing positive correlation, since the past month of March, of the cryptocurrency with the US stock index S&P 500 .
According to this report:
“Bitcoin’s role is more a reflection of the need for an alternative currency than a safe haven or protection asset . “
In the opinion of analysts, the market capitalization of Bitcoin would have to increase tenfold to match the private sector’s investment in gold. So it is clear: although it has qualities that may be interesting for investors at certain times, Bitcoin is not an alternative to gold as a safe haven asset.
The post The Reasons Why Bitcoin Can Never Replace Gold appeared first on Best Gold IRA Companies.
) [1] => Array ( [title] => Why Should We Continue To Trust Gold As A Refuge Value? [link] => https://goldiracompanies.best/why-should-we-continue-to-trust-gold-as-a-refuge-value/ [dc] => Array ( [creator] => Jeromy Wallen ) [pubdate] => Tue, 29 Nov 2022 05:18:31 +0000 [category] => Gold [guid] => https://goldiracompanies.best/?p=30 [description] =>
Gold has become one of the star investments in this difficult year of 2020. After staging a spectacular climb during the summer, culminating in the all-time high at the end of July, the price has lost some steam, remaining in a narrow fork between $1,850 and $1,900 an ounce. Despite this, the interest of investors in the metal as a refuge asset and the geopolitical events that are coming make it advisable to continue trusting gold. In this post we will explain why.
One of the factors that have contributed to this performance of gold during 2020 has been the increase in demand from the investment sector , which has served to partially offset the drop in demand from the jewelry sector, the largest consumer of the precious metal.
As stated in the Gold Demand Trends report for the third quarter of the year, published by the World Gold Council , investment in gold bars and coins increased by 49%, to 222.1 tons , between July and September , compared to the same period of 2019.
This increase has occurred in almost all countries, progressively as the economies of the confinement emerged and the supply problems caused by the bottlenecks derived from the closure of communications were solved.
In addition, the increase in the price of the metal has also caused the value of this demand for gold bars and coins to skyrocket, reaching 34.9 billion dollars in the third quarter.
The fact that international investors are strongly supporting gold is significant and suggests that the upward trend in its price has not ended, so it still makes sense to trust the precious metal as a refuge asset, in a particularly difficult year for the rest of the assets.
According to David Kuo , CEO of Smart Investor , the main reason to continue betting on gold is that it continues to be the best among the main investment assets so far this year.
Gold vs. Actions
Since the beginning of the year, the metal has appreciated 24% , clearly outperforming the main world stock indices, such as the Straits Times Index , which brings together the 30 main companies on the Singapore Stock Exchange and which has dropped 21% this year. year, or the Dow Jones Industrial in the United States, which has lost just over 7%.
Gold has also far exceeded the revaluation of the MSCI World Index (+4%), which brings together the quotes of companies from 23 markets and has only yielded compared to the Nasdaq (+32%), although at many times in July and August past also exceeded this percentage.
Even so, gold is a long-term asset, which shows its best version in the long term. And its evolution from January 2019 to now (+54%) far exceeds that of the Dow Jones Industrial and the Nasdaq.
Gold vs Dollar
As we have already seen in other posts on this blog, gold maintains a negative correlation with the dollar, so when the greenback falls, gold appreciates.
At the beginning of the year, the Dollar Index (which compares this currency with several international currencies: the euro, the British pound, the Swiss franc, the Swedish krona, the Japanese yen and the Canadian dollar) was at 96.5, while the dollar was trading at $1,514 an ounce.
As of mid-October, the Dollar index has fallen to 93.8, while gold is trading at $1,923 an ounce, which means that the dollar has lost 3% year to date, while gold has revalued by 24%.
In the longer term, since January 2019, the Dollar index has fallen from 96.8 to 93.2 (-4%), while the price of gold has grown by 48%. As pointed out by Smart Investor, this may suggest that investors are concerned that the dollar may continue to fall.
Gold vs Interest Rates
In addition to the US dollar, gold is also negatively correlated with interest rates. Since the beginning of the year, the central banks of the main countries have reduced interest rates, in many cases to almost zero.
For example, at the beginning of 2020, the Federal Reserve interest rate was between 0 and 0.25% in March . Last September, the Fed confirmed that it would keep rates close to zero until at least 2023.
In the Eurozone, Japan, the United Kingdom, Canada and Australia, rates are also at record lows. This is a favorable factor for gold, as the state of interest rates means that yields on treasury bonds, an asset with which gold competes for investors’ favor, are also close to zero or even negatives.
The fear index
Another point in favor of investing in gold is the feeling of fear that investors face in the face of a possible second wave of the pandemic and other sources of international geopolitical instability, such as the presidential elections in the United States. There is an economic indicator that makes it possible to measure the intensity of this ‘fear’ among investors: it is the VIX index , also called the ‘volatility index’. While this is not a perfect measure of fear in the markets, it does provide a gauge of how investors view the future.
Thus, when the VIX index is at a high level, it may be an indication that investment in the stock markets is uncertain. And when it goes down, the stock price is expected to be less volatile.
The more volatility there is in the markets, the more positive it is for gold, as investors tend to look for safe-haven assets like gold in which to invest their money.
Last March, this index shot up to 85 points, coinciding with the moment when the Covid-19 pandemic had spread to many parts of the world. At that time, the price of gold rose from $1,474 to $1,617 an ounce.
Although the VIX index has returned to its normal levels (around 25 points), the price of gold remains high, and is expected to remain so throughout 2021.
The future of gold
The conjunction of factors that have allowed gold to reach its all-time high during 2020 are still, for the most part, valid.
Among them is concern about the ability of companies to recover the level they had before the pandemic; the unprecedented policies of support for economies by central banks, which could lead to the devaluation of paper money, especially the dollar; the low level of interest rates, which will remain so at least until 2023; and the rise in inflation.
Precisely, the combination of low interest rates and high inflation constitutes an explosive cocktail that can continue to push up the price of gold.
To this must be added the foreseeable continuation of international geopolitical instability, which will not subside after the US elections, until a viable vaccine for Covid-19 is found.
In short, everything indicates that gold will continue to rise and, in any case, it is an active refuge that should be bet on in times of instability like the current ones.…
The post Why Should We Continue To Trust Gold As A Refuge Value? appeared first on Best Gold IRA Companies.
[content] => Array ( [encoded] =>Gold has become one of the star investments in this difficult year of 2020. After staging a spectacular climb during the summer, culminating in the all-time high at the end of July, the price has lost some steam, remaining in a narrow fork between $1,850 and $1,900 an ounce. Despite this, the interest of investors in the metal as a refuge asset and the geopolitical events that are coming make it advisable to continue trusting gold. In this post we will explain why.
One of the factors that have contributed to this performance of gold during 2020 has been the increase in demand from the investment sector , which has served to partially offset the drop in demand from the jewelry sector, the largest consumer of the precious metal.
As stated in the Gold Demand Trends report for the third quarter of the year, published by the World Gold Council , investment in gold bars and coins increased by 49%, to 222.1 tons , between July and September , compared to the same period of 2019.
This increase has occurred in almost all countries, progressively as the economies of the confinement emerged and the supply problems caused by the bottlenecks derived from the closure of communications were solved.
In addition, the increase in the price of the metal has also caused the value of this demand for gold bars and coins to skyrocket, reaching 34.9 billion dollars in the third quarter.
The fact that international investors are strongly supporting gold is significant and suggests that the upward trend in its price has not ended, so it still makes sense to trust the precious metal as a refuge asset, in a particularly difficult year for the rest of the assets.
According to David Kuo , CEO of Smart Investor , the main reason to continue betting on gold is that it continues to be the best among the main investment assets so far this year.
Gold vs. Actions
Since the beginning of the year, the metal has appreciated 24% , clearly outperforming the main world stock indices, such as the Straits Times Index , which brings together the 30 main companies on the Singapore Stock Exchange and which has dropped 21% this year. year, or the Dow Jones Industrial in the United States, which has lost just over 7%.
Gold has also far exceeded the revaluation of the MSCI World Index (+4%), which brings together the quotes of companies from 23 markets and has only yielded compared to the Nasdaq (+32%), although at many times in July and August past also exceeded this percentage.
Even so, gold is a long-term asset, which shows its best version in the long term. And its evolution from January 2019 to now (+54%) far exceeds that of the Dow Jones Industrial and the Nasdaq.
Gold vs Dollar
As we have already seen in other posts on this blog, gold maintains a negative correlation with the dollar, so when the greenback falls, gold appreciates.
At the beginning of the year, the Dollar Index (which compares this currency with several international currencies: the euro, the British pound, the Swiss franc, the Swedish krona, the Japanese yen and the Canadian dollar) was at 96.5, while the dollar was trading at $1,514 an ounce.
As of mid-October, the Dollar index has fallen to 93.8, while gold is trading at $1,923 an ounce, which means that the dollar has lost 3% year to date, while gold has revalued by 24%.
In the longer term, since January 2019, the Dollar index has fallen from 96.8 to 93.2 (-4%), while the price of gold has grown by 48%. As pointed out by Smart Investor, this may suggest that investors are concerned that the dollar may continue to fall.
Gold vs Interest Rates
In addition to the US dollar, gold is also negatively correlated with interest rates. Since the beginning of the year, the central banks of the main countries have reduced interest rates, in many cases to almost zero.
For example, at the beginning of 2020, the Federal Reserve interest rate was between 0 and 0.25% in March . Last September, the Fed confirmed that it would keep rates close to zero until at least 2023.
In the Eurozone, Japan, the United Kingdom, Canada and Australia, rates are also at record lows. This is a favorable factor for gold, as the state of interest rates means that yields on treasury bonds, an asset with which gold competes for investors’ favor, are also close to zero or even negatives.
The fear index
Another point in favor of investing in gold is the feeling of fear that investors face in the face of a possible second wave of the pandemic and other sources of international geopolitical instability, such as the presidential elections in the United States. There is an economic indicator that makes it possible to measure the intensity of this ‘fear’ among investors: it is the VIX index , also called the ‘volatility index’. While this is not a perfect measure of fear in the markets, it does provide a gauge of how investors view the future.
Thus, when the VIX index is at a high level, it may be an indication that investment in the stock markets is uncertain. And when it goes down, the stock price is expected to be less volatile.
The more volatility there is in the markets, the more positive it is for gold, as investors tend to look for safe-haven assets like gold in which to invest their money.
Last March, this index shot up to 85 points, coinciding with the moment when the Covid-19 pandemic had spread to many parts of the world. At that time, the price of gold rose from $1,474 to $1,617 an ounce.
Although the VIX index has returned to its normal levels (around 25 points), the price of gold remains high, and is expected to remain so throughout 2021.
The future of gold
The conjunction of factors that have allowed gold to reach its all-time high during 2020 are still, for the most part, valid.
Among them is concern about the ability of companies to recover the level they had before the pandemic; the unprecedented policies of support for economies by central banks, which could lead to the devaluation of paper money, especially the dollar; the low level of interest rates, which will remain so at least until 2023; and the rise in inflation.
Precisely, the combination of low interest rates and high inflation constitutes an explosive cocktail that can continue to push up the price of gold.
To this must be added the foreseeable continuation of international geopolitical instability, which will not subside after the US elections, until a viable vaccine for Covid-19 is found.
In short, everything indicates that gold will continue to rise and, in any case, it is an active refuge that should be bet on in times of instability like the current ones.…
The post Why Should We Continue To Trust Gold As A Refuge Value? appeared first on Best Gold IRA Companies.
) [summary] =>Gold has become one of the star investments in this difficult year of 2020. After staging a spectacular climb during the summer, culminating in the all-time high at the end of July, the price has lost some steam, remaining in a narrow fork between $1,850 and $1,900 an ounce. Despite this, the interest of investors in the metal as a refuge asset and the geopolitical events that are coming make it advisable to continue trusting gold. In this post we will explain why.
One of the factors that have contributed to this performance of gold during 2020 has been the increase in demand from the investment sector , which has served to partially offset the drop in demand from the jewelry sector, the largest consumer of the precious metal.
As stated in the Gold Demand Trends report for the third quarter of the year, published by the World Gold Council , investment in gold bars and coins increased by 49%, to 222.1 tons , between July and September , compared to the same period of 2019.
This increase has occurred in almost all countries, progressively as the economies of the confinement emerged and the supply problems caused by the bottlenecks derived from the closure of communications were solved.
In addition, the increase in the price of the metal has also caused the value of this demand for gold bars and coins to skyrocket, reaching 34.9 billion dollars in the third quarter.
The fact that international investors are strongly supporting gold is significant and suggests that the upward trend in its price has not ended, so it still makes sense to trust the precious metal as a refuge asset, in a particularly difficult year for the rest of the assets.
According to David Kuo , CEO of Smart Investor , the main reason to continue betting on gold is that it continues to be the best among the main investment assets so far this year.
Gold vs. Actions
Since the beginning of the year, the metal has appreciated 24% , clearly outperforming the main world stock indices, such as the Straits Times Index , which brings together the 30 main companies on the Singapore Stock Exchange and which has dropped 21% this year. year, or the Dow Jones Industrial in the United States, which has lost just over 7%.
Gold has also far exceeded the revaluation of the MSCI World Index (+4%), which brings together the quotes of companies from 23 markets and has only yielded compared to the Nasdaq (+32%), although at many times in July and August past also exceeded this percentage.
Even so, gold is a long-term asset, which shows its best version in the long term. And its evolution from January 2019 to now (+54%) far exceeds that of the Dow Jones Industrial and the Nasdaq.
Gold vs Dollar
As we have already seen in other posts on this blog, gold maintains a negative correlation with the dollar, so when the greenback falls, gold appreciates.
At the beginning of the year, the Dollar Index (which compares this currency with several international currencies: the euro, the British pound, the Swiss franc, the Swedish krona, the Japanese yen and the Canadian dollar) was at 96.5, while the dollar was trading at $1,514 an ounce.
As of mid-October, the Dollar index has fallen to 93.8, while gold is trading at $1,923 an ounce, which means that the dollar has lost 3% year to date, while gold has revalued by 24%.
In the longer term, since January 2019, the Dollar index has fallen from 96.8 to 93.2 (-4%), while the price of gold has grown by 48%. As pointed out by Smart Investor, this may suggest that investors are concerned that the dollar may continue to fall.
Gold vs Interest Rates
In addition to the US dollar, gold is also negatively correlated with interest rates. Since the beginning of the year, the central banks of the main countries have reduced interest rates, in many cases to almost zero.
For example, at the beginning of 2020, the Federal Reserve interest rate was between 0 and 0.25% in March . Last September, the Fed confirmed that it would keep rates close to zero until at least 2023.
In the Eurozone, Japan, the United Kingdom, Canada and Australia, rates are also at record lows. This is a favorable factor for gold, as the state of interest rates means that yields on treasury bonds, an asset with which gold competes for investors’ favor, are also close to zero or even negatives.
The fear index
Another point in favor of investing in gold is the feeling of fear that investors face in the face of a possible second wave of the pandemic and other sources of international geopolitical instability, such as the presidential elections in the United States. There is an economic indicator that makes it possible to measure the intensity of this ‘fear’ among investors: it is the VIX index , also called the ‘volatility index’. While this is not a perfect measure of fear in the markets, it does provide a gauge of how investors view the future.
Thus, when the VIX index is at a high level, it may be an indication that investment in the stock markets is uncertain. And when it goes down, the stock price is expected to be less volatile.
The more volatility there is in the markets, the more positive it is for gold, as investors tend to look for safe-haven assets like gold in which to invest their money.
Last March, this index shot up to 85 points, coinciding with the moment when the Covid-19 pandemic had spread to many parts of the world. At that time, the price of gold rose from $1,474 to $1,617 an ounce.
Although the VIX index has returned to its normal levels (around 25 points), the price of gold remains high, and is expected to remain so throughout 2021.
The future of gold
The conjunction of factors that have allowed gold to reach its all-time high during 2020 are still, for the most part, valid.
Among them is concern about the ability of companies to recover the level they had before the pandemic; the unprecedented policies of support for economies by central banks, which could lead to the devaluation of paper money, especially the dollar; the low level of interest rates, which will remain so at least until 2023; and the rise in inflation.
Precisely, the combination of low interest rates and high inflation constitutes an explosive cocktail that can continue to push up the price of gold.
To this must be added the foreseeable continuation of international geopolitical instability, which will not subside after the US elections, until a viable vaccine for Covid-19 is found.
In short, everything indicates that gold will continue to rise and, in any case, it is an active refuge that should be bet on in times of instability like the current ones.…
The post Why Should We Continue To Trust Gold As A Refuge Value? appeared first on Best Gold IRA Companies.
[atom_content] =>Gold has become one of the star investments in this difficult year of 2020. After staging a spectacular climb during the summer, culminating in the all-time high at the end of July, the price has lost some steam, remaining in a narrow fork between $1,850 and $1,900 an ounce. Despite this, the interest of investors in the metal as a refuge asset and the geopolitical events that are coming make it advisable to continue trusting gold. In this post we will explain why.
One of the factors that have contributed to this performance of gold during 2020 has been the increase in demand from the investment sector , which has served to partially offset the drop in demand from the jewelry sector, the largest consumer of the precious metal.
As stated in the Gold Demand Trends report for the third quarter of the year, published by the World Gold Council , investment in gold bars and coins increased by 49%, to 222.1 tons , between July and September , compared to the same period of 2019.
This increase has occurred in almost all countries, progressively as the economies of the confinement emerged and the supply problems caused by the bottlenecks derived from the closure of communications were solved.
In addition, the increase in the price of the metal has also caused the value of this demand for gold bars and coins to skyrocket, reaching 34.9 billion dollars in the third quarter.
The fact that international investors are strongly supporting gold is significant and suggests that the upward trend in its price has not ended, so it still makes sense to trust the precious metal as a refuge asset, in a particularly difficult year for the rest of the assets.
According to David Kuo , CEO of Smart Investor , the main reason to continue betting on gold is that it continues to be the best among the main investment assets so far this year.
Gold vs. Actions
Since the beginning of the year, the metal has appreciated 24% , clearly outperforming the main world stock indices, such as the Straits Times Index , which brings together the 30 main companies on the Singapore Stock Exchange and which has dropped 21% this year. year, or the Dow Jones Industrial in the United States, which has lost just over 7%.
Gold has also far exceeded the revaluation of the MSCI World Index (+4%), which brings together the quotes of companies from 23 markets and has only yielded compared to the Nasdaq (+32%), although at many times in July and August past also exceeded this percentage.
Even so, gold is a long-term asset, which shows its best version in the long term. And its evolution from January 2019 to now (+54%) far exceeds that of the Dow Jones Industrial and the Nasdaq.
Gold vs Dollar
As we have already seen in other posts on this blog, gold maintains a negative correlation with the dollar, so when the greenback falls, gold appreciates.
At the beginning of the year, the Dollar Index (which compares this currency with several international currencies: the euro, the British pound, the Swiss franc, the Swedish krona, the Japanese yen and the Canadian dollar) was at 96.5, while the dollar was trading at $1,514 an ounce.
As of mid-October, the Dollar index has fallen to 93.8, while gold is trading at $1,923 an ounce, which means that the dollar has lost 3% year to date, while gold has revalued by 24%.
In the longer term, since January 2019, the Dollar index has fallen from 96.8 to 93.2 (-4%), while the price of gold has grown by 48%. As pointed out by Smart Investor, this may suggest that investors are concerned that the dollar may continue to fall.
Gold vs Interest Rates
In addition to the US dollar, gold is also negatively correlated with interest rates. Since the beginning of the year, the central banks of the main countries have reduced interest rates, in many cases to almost zero.
For example, at the beginning of 2020, the Federal Reserve interest rate was between 0 and 0.25% in March . Last September, the Fed confirmed that it would keep rates close to zero until at least 2023.
In the Eurozone, Japan, the United Kingdom, Canada and Australia, rates are also at record lows. This is a favorable factor for gold, as the state of interest rates means that yields on treasury bonds, an asset with which gold competes for investors’ favor, are also close to zero or even negatives.
The fear index
Another point in favor of investing in gold is the feeling of fear that investors face in the face of a possible second wave of the pandemic and other sources of international geopolitical instability, such as the presidential elections in the United States. There is an economic indicator that makes it possible to measure the intensity of this ‘fear’ among investors: it is the VIX index , also called the ‘volatility index’. While this is not a perfect measure of fear in the markets, it does provide a gauge of how investors view the future.
Thus, when the VIX index is at a high level, it may be an indication that investment in the stock markets is uncertain. And when it goes down, the stock price is expected to be less volatile.
The more volatility there is in the markets, the more positive it is for gold, as investors tend to look for safe-haven assets like gold in which to invest their money.
Last March, this index shot up to 85 points, coinciding with the moment when the Covid-19 pandemic had spread to many parts of the world. At that time, the price of gold rose from $1,474 to $1,617 an ounce.
Although the VIX index has returned to its normal levels (around 25 points), the price of gold remains high, and is expected to remain so throughout 2021.
The future of gold
The conjunction of factors that have allowed gold to reach its all-time high during 2020 are still, for the most part, valid.
Among them is concern about the ability of companies to recover the level they had before the pandemic; the unprecedented policies of support for economies by central banks, which could lead to the devaluation of paper money, especially the dollar; the low level of interest rates, which will remain so at least until 2023; and the rise in inflation.
Precisely, the combination of low interest rates and high inflation constitutes an explosive cocktail that can continue to push up the price of gold.
To this must be added the foreseeable continuation of international geopolitical instability, which will not subside after the US elections, until a viable vaccine for Covid-19 is found.
In short, everything indicates that gold will continue to rise and, in any case, it is an active refuge that should be bet on in times of instability like the current ones.…
The post Why Should We Continue To Trust Gold As A Refuge Value? appeared first on Best Gold IRA Companies.
) [2] => Array ( [title] => Gold, An Investment That Works Better In The Long Term [link] => https://goldiracompanies.best/gold-an-investment-that-works-better-in-the-long-term/ [dc] => Array ( [creator] => Jeromy Wallen ) [pubdate] => Mon, 28 Nov 2022 07:04:41 +0000 [category] => Gold [guid] => https://goldiracompanies.best/?p=33 [description] =>
The price of gold has experienced considerable ups and downs during this atypical year 2020: a fall in March that interrupted the upward path, to then start a rally that took it to its all-time high in August, and then fall below $1,900 an ounce .
Despite this, the trajectory is clearly upward and it is estimated that it will close the year with a revaluation of 25%. The conclusion that we can draw from this behavior of the precious metal is clear: gold is an asset that offers its best qualities over long periods of time.
“What’s wrong with gold, that it’s in the doldrums?” or “Didn’t you say that gold was going up? Well, yesterday it lost xx dollars!” .
Those of us who follow the news of the gold market on a daily basis are familiar with a figure that we could describe as ‘the short-sighted’ : a person who, although he consults the daily price of gold daily, is not familiar with the peculiarities of this market and simplifies its operation. at the price level, just as if it were the price of a stock.
It is necessary to explain to this type of interlocutors that gold is a very simple asset and that it has multiple advantages, such as its ability to maintain purchasing power, protect against inflation and constitute a refuge in times of crisis. But that is not the most appropriate to earn easy money and, above all, fast.
Crisis and short-termism
Just a few days ago, the director of External Relations of the World Gold Council , John Mulligan , published a post on the blog of this organization, Goldhub , in which he addressed this controversial issue of short-termism in investing in gold, after detecting a worrying lack of long-term vision in the media that contact them.
In his post, Mulligan expresses his fear that the Covid-19 crisis, the great financial crisis of 2008 or the European sovereign debt crisis that followed it have almost wiped out strategic thinking or long-term vision among analysts and media, which seem to pay attention only to immediate movements and their impact on the price.
As the executive of the World Gold Council explains:
“After each crisis we witness a relatively rapid return to risky assets, but with doubts as to whether risk appetite is a sign of real recovery, with rational expectations, or rather a reflection of ‘tunnel vision’ ‘ and short-term optimism” .
An opinion that reflects what a lot of people think about the financial markets: that the desire for a quick exit from the crisis and an excessively short-term vision prevent the adoption of security measures to prevent this situation from happening again. Some security measures in which precious metals and, particularly gold, have a lot to say.
Gold and long term
As they defend from the World Gold Council, the precious metal works better as a long-term investment because it is acquired by many more people, in many more countries, for many more reasons than any other investment asset. Precisely, the countries that buy the most gold (China and India) are the most populous in the world, with the fastest growing economies and populations that are rising out of poverty and increasingly have higher incomes, as well as a cultural affinity with gold that stretches back many centuries.…
The post Gold, An Investment That Works Better In The Long Term appeared first on Best Gold IRA Companies.
[content] => Array ( [encoded] =>The price of gold has experienced considerable ups and downs during this atypical year 2020: a fall in March that interrupted the upward path, to then start a rally that took it to its all-time high in August, and then fall below $1,900 an ounce .
Despite this, the trajectory is clearly upward and it is estimated that it will close the year with a revaluation of 25%. The conclusion that we can draw from this behavior of the precious metal is clear: gold is an asset that offers its best qualities over long periods of time.
“What’s wrong with gold, that it’s in the doldrums?” or “Didn’t you say that gold was going up? Well, yesterday it lost xx dollars!” .
Those of us who follow the news of the gold market on a daily basis are familiar with a figure that we could describe as ‘the short-sighted’ : a person who, although he consults the daily price of gold daily, is not familiar with the peculiarities of this market and simplifies its operation. at the price level, just as if it were the price of a stock.
It is necessary to explain to this type of interlocutors that gold is a very simple asset and that it has multiple advantages, such as its ability to maintain purchasing power, protect against inflation and constitute a refuge in times of crisis. But that is not the most appropriate to earn easy money and, above all, fast.
Crisis and short-termism
Just a few days ago, the director of External Relations of the World Gold Council , John Mulligan , published a post on the blog of this organization, Goldhub , in which he addressed this controversial issue of short-termism in investing in gold, after detecting a worrying lack of long-term vision in the media that contact them.
In his post, Mulligan expresses his fear that the Covid-19 crisis, the great financial crisis of 2008 or the European sovereign debt crisis that followed it have almost wiped out strategic thinking or long-term vision among analysts and media, which seem to pay attention only to immediate movements and their impact on the price.
As the executive of the World Gold Council explains:
“After each crisis we witness a relatively rapid return to risky assets, but with doubts as to whether risk appetite is a sign of real recovery, with rational expectations, or rather a reflection of ‘tunnel vision’ ‘ and short-term optimism” .
An opinion that reflects what a lot of people think about the financial markets: that the desire for a quick exit from the crisis and an excessively short-term vision prevent the adoption of security measures to prevent this situation from happening again. Some security measures in which precious metals and, particularly gold, have a lot to say.
Gold and long term
As they defend from the World Gold Council, the precious metal works better as a long-term investment because it is acquired by many more people, in many more countries, for many more reasons than any other investment asset. Precisely, the countries that buy the most gold (China and India) are the most populous in the world, with the fastest growing economies and populations that are rising out of poverty and increasingly have higher incomes, as well as a cultural affinity with gold that stretches back many centuries.…
The post Gold, An Investment That Works Better In The Long Term appeared first on Best Gold IRA Companies.
) [summary] =>The price of gold has experienced considerable ups and downs during this atypical year 2020: a fall in March that interrupted the upward path, to then start a rally that took it to its all-time high in August, and then fall below $1,900 an ounce .
Despite this, the trajectory is clearly upward and it is estimated that it will close the year with a revaluation of 25%. The conclusion that we can draw from this behavior of the precious metal is clear: gold is an asset that offers its best qualities over long periods of time.
“What’s wrong with gold, that it’s in the doldrums?” or “Didn’t you say that gold was going up? Well, yesterday it lost xx dollars!” .
Those of us who follow the news of the gold market on a daily basis are familiar with a figure that we could describe as ‘the short-sighted’ : a person who, although he consults the daily price of gold daily, is not familiar with the peculiarities of this market and simplifies its operation. at the price level, just as if it were the price of a stock.
It is necessary to explain to this type of interlocutors that gold is a very simple asset and that it has multiple advantages, such as its ability to maintain purchasing power, protect against inflation and constitute a refuge in times of crisis. But that is not the most appropriate to earn easy money and, above all, fast.
Crisis and short-termism
Just a few days ago, the director of External Relations of the World Gold Council , John Mulligan , published a post on the blog of this organization, Goldhub , in which he addressed this controversial issue of short-termism in investing in gold, after detecting a worrying lack of long-term vision in the media that contact them.
In his post, Mulligan expresses his fear that the Covid-19 crisis, the great financial crisis of 2008 or the European sovereign debt crisis that followed it have almost wiped out strategic thinking or long-term vision among analysts and media, which seem to pay attention only to immediate movements and their impact on the price.
As the executive of the World Gold Council explains:
“After each crisis we witness a relatively rapid return to risky assets, but with doubts as to whether risk appetite is a sign of real recovery, with rational expectations, or rather a reflection of ‘tunnel vision’ ‘ and short-term optimism” .
An opinion that reflects what a lot of people think about the financial markets: that the desire for a quick exit from the crisis and an excessively short-term vision prevent the adoption of security measures to prevent this situation from happening again. Some security measures in which precious metals and, particularly gold, have a lot to say.
Gold and long term
As they defend from the World Gold Council, the precious metal works better as a long-term investment because it is acquired by many more people, in many more countries, for many more reasons than any other investment asset. Precisely, the countries that buy the most gold (China and India) are the most populous in the world, with the fastest growing economies and populations that are rising out of poverty and increasingly have higher incomes, as well as a cultural affinity with gold that stretches back many centuries.…
The post Gold, An Investment That Works Better In The Long Term appeared first on Best Gold IRA Companies.
[atom_content] =>The price of gold has experienced considerable ups and downs during this atypical year 2020: a fall in March that interrupted the upward path, to then start a rally that took it to its all-time high in August, and then fall below $1,900 an ounce .
Despite this, the trajectory is clearly upward and it is estimated that it will close the year with a revaluation of 25%. The conclusion that we can draw from this behavior of the precious metal is clear: gold is an asset that offers its best qualities over long periods of time.
“What’s wrong with gold, that it’s in the doldrums?” or “Didn’t you say that gold was going up? Well, yesterday it lost xx dollars!” .
Those of us who follow the news of the gold market on a daily basis are familiar with a figure that we could describe as ‘the short-sighted’ : a person who, although he consults the daily price of gold daily, is not familiar with the peculiarities of this market and simplifies its operation. at the price level, just as if it were the price of a stock.
It is necessary to explain to this type of interlocutors that gold is a very simple asset and that it has multiple advantages, such as its ability to maintain purchasing power, protect against inflation and constitute a refuge in times of crisis. But that is not the most appropriate to earn easy money and, above all, fast.
Crisis and short-termism
Just a few days ago, the director of External Relations of the World Gold Council , John Mulligan , published a post on the blog of this organization, Goldhub , in which he addressed this controversial issue of short-termism in investing in gold, after detecting a worrying lack of long-term vision in the media that contact them.
In his post, Mulligan expresses his fear that the Covid-19 crisis, the great financial crisis of 2008 or the European sovereign debt crisis that followed it have almost wiped out strategic thinking or long-term vision among analysts and media, which seem to pay attention only to immediate movements and their impact on the price.
As the executive of the World Gold Council explains:
“After each crisis we witness a relatively rapid return to risky assets, but with doubts as to whether risk appetite is a sign of real recovery, with rational expectations, or rather a reflection of ‘tunnel vision’ ‘ and short-term optimism” .
An opinion that reflects what a lot of people think about the financial markets: that the desire for a quick exit from the crisis and an excessively short-term vision prevent the adoption of security measures to prevent this situation from happening again. Some security measures in which precious metals and, particularly gold, have a lot to say.
Gold and long term
As they defend from the World Gold Council, the precious metal works better as a long-term investment because it is acquired by many more people, in many more countries, for many more reasons than any other investment asset. Precisely, the countries that buy the most gold (China and India) are the most populous in the world, with the fastest growing economies and populations that are rising out of poverty and increasingly have higher incomes, as well as a cultural affinity with gold that stretches back many centuries.…
The post Gold, An Investment That Works Better In The Long Term appeared first on Best Gold IRA Companies.
) [3] => Array ( [title] => The Covid19 Crisis Triggers Demand In Gold [link] => https://goldiracompanies.best/the-covid19-crisis-triggers-demand-in-gold/ [dc] => Array ( [creator] => Jeromy Wallen ) [pubdate] => Sun, 27 Nov 2022 07:07:55 +0000 [category] => Gold [guid] => https://goldiracompanies.best/?p=35 [description] =>
Factors like these are hardly going to translate into an immediate rise in the price of the metal, but they help explain why the global gold market is so much bigger and more valuable than it was two or three decades ago.
As Mulligan explains, the long-term vision of the gold business starts from the very origin of the metal: the mining companies that extract it know perfectly well that it is a business that takes years, with a long task of planning, exploration and investment.
Investors familiar with the precious metal also know that it’s its long-term appreciation that counts , where it often wins out against the investment assets it’s often compared to: stocks and treasury bonds.
The problem is that some players whose objective is to earn quick and easy money also intervene in the gold market, with speculative movements that often involve maneuvers designed to lower the price of the metal, through legal or illegal means (such as the so-called ‘spoofing’, for which JPMorgan has been sentenced to pay a fine of 920 million dollars ) .
In moments of crisis and instability in the markets, it is common for the demand for gold to skyrocket, since it is considered by investors as an ideal asset to take refuge in until the storm passes, before returning to other assets with greater risk and profitability. short term.
This is what has happened in recent months, with the economic crisis caused by the Covid-19 pandemic: investor demand for gold, both in its physical form and in ‘paper’ products such as ETFs, has it has shot up to levels even higher than those recorded during and after the 2008 financial crisis.
According to John Mulligan, this could lead to a structural change in the demand for gold, thanks to the expansion of the investor base:
“The last crisis aroused the interest of European private investors in gold and changed the position on the precious metal of central banks, which went from being sellers to buyers. Gold proved its value as a haven when it was most needed, and those who bought it then have even maintained substantial demand for the metal .
This can cause an important structural change, which is the appreciation of gold by institutional investors and that can have enormous relevance for gold in the long term, convincing other investors that the metal is a better solution for several years to come. that with the aim of giving a ‘pitch’ in the short term.
So when someone close to you wonders why gold has lost a few dollars from one day to the next, you already have arguments to answer them. Or, if you prefer, just show him this graph of the evolution of the price of gold since 1972 , where he can see that the line is always rising.…
The post The Covid19 Crisis Triggers Demand In Gold appeared first on Best Gold IRA Companies.
[content] => Array ( [encoded] =>Factors like these are hardly going to translate into an immediate rise in the price of the metal, but they help explain why the global gold market is so much bigger and more valuable than it was two or three decades ago.
As Mulligan explains, the long-term vision of the gold business starts from the very origin of the metal: the mining companies that extract it know perfectly well that it is a business that takes years, with a long task of planning, exploration and investment.
Investors familiar with the precious metal also know that it’s its long-term appreciation that counts , where it often wins out against the investment assets it’s often compared to: stocks and treasury bonds.
The problem is that some players whose objective is to earn quick and easy money also intervene in the gold market, with speculative movements that often involve maneuvers designed to lower the price of the metal, through legal or illegal means (such as the so-called ‘spoofing’, for which JPMorgan has been sentenced to pay a fine of 920 million dollars ) .
In moments of crisis and instability in the markets, it is common for the demand for gold to skyrocket, since it is considered by investors as an ideal asset to take refuge in until the storm passes, before returning to other assets with greater risk and profitability. short term.
This is what has happened in recent months, with the economic crisis caused by the Covid-19 pandemic: investor demand for gold, both in its physical form and in ‘paper’ products such as ETFs, has it has shot up to levels even higher than those recorded during and after the 2008 financial crisis.
According to John Mulligan, this could lead to a structural change in the demand for gold, thanks to the expansion of the investor base:
“The last crisis aroused the interest of European private investors in gold and changed the position on the precious metal of central banks, which went from being sellers to buyers. Gold proved its value as a haven when it was most needed, and those who bought it then have even maintained substantial demand for the metal .
This can cause an important structural change, which is the appreciation of gold by institutional investors and that can have enormous relevance for gold in the long term, convincing other investors that the metal is a better solution for several years to come. that with the aim of giving a ‘pitch’ in the short term.
So when someone close to you wonders why gold has lost a few dollars from one day to the next, you already have arguments to answer them. Or, if you prefer, just show him this graph of the evolution of the price of gold since 1972 , where he can see that the line is always rising.…
The post The Covid19 Crisis Triggers Demand In Gold appeared first on Best Gold IRA Companies.
) [summary] =>Factors like these are hardly going to translate into an immediate rise in the price of the metal, but they help explain why the global gold market is so much bigger and more valuable than it was two or three decades ago.
As Mulligan explains, the long-term vision of the gold business starts from the very origin of the metal: the mining companies that extract it know perfectly well that it is a business that takes years, with a long task of planning, exploration and investment.
Investors familiar with the precious metal also know that it’s its long-term appreciation that counts , where it often wins out against the investment assets it’s often compared to: stocks and treasury bonds.
The problem is that some players whose objective is to earn quick and easy money also intervene in the gold market, with speculative movements that often involve maneuvers designed to lower the price of the metal, through legal or illegal means (such as the so-called ‘spoofing’, for which JPMorgan has been sentenced to pay a fine of 920 million dollars ) .
In moments of crisis and instability in the markets, it is common for the demand for gold to skyrocket, since it is considered by investors as an ideal asset to take refuge in until the storm passes, before returning to other assets with greater risk and profitability. short term.
This is what has happened in recent months, with the economic crisis caused by the Covid-19 pandemic: investor demand for gold, both in its physical form and in ‘paper’ products such as ETFs, has it has shot up to levels even higher than those recorded during and after the 2008 financial crisis.
According to John Mulligan, this could lead to a structural change in the demand for gold, thanks to the expansion of the investor base:
“The last crisis aroused the interest of European private investors in gold and changed the position on the precious metal of central banks, which went from being sellers to buyers. Gold proved its value as a haven when it was most needed, and those who bought it then have even maintained substantial demand for the metal .
This can cause an important structural change, which is the appreciation of gold by institutional investors and that can have enormous relevance for gold in the long term, convincing other investors that the metal is a better solution for several years to come. that with the aim of giving a ‘pitch’ in the short term.
So when someone close to you wonders why gold has lost a few dollars from one day to the next, you already have arguments to answer them. Or, if you prefer, just show him this graph of the evolution of the price of gold since 1972 , where he can see that the line is always rising.…
The post The Covid19 Crisis Triggers Demand In Gold appeared first on Best Gold IRA Companies.
[atom_content] =>Factors like these are hardly going to translate into an immediate rise in the price of the metal, but they help explain why the global gold market is so much bigger and more valuable than it was two or three decades ago.
As Mulligan explains, the long-term vision of the gold business starts from the very origin of the metal: the mining companies that extract it know perfectly well that it is a business that takes years, with a long task of planning, exploration and investment.
Investors familiar with the precious metal also know that it’s its long-term appreciation that counts , where it often wins out against the investment assets it’s often compared to: stocks and treasury bonds.
The problem is that some players whose objective is to earn quick and easy money also intervene in the gold market, with speculative movements that often involve maneuvers designed to lower the price of the metal, through legal or illegal means (such as the so-called ‘spoofing’, for which JPMorgan has been sentenced to pay a fine of 920 million dollars ) .
In moments of crisis and instability in the markets, it is common for the demand for gold to skyrocket, since it is considered by investors as an ideal asset to take refuge in until the storm passes, before returning to other assets with greater risk and profitability. short term.
This is what has happened in recent months, with the economic crisis caused by the Covid-19 pandemic: investor demand for gold, both in its physical form and in ‘paper’ products such as ETFs, has it has shot up to levels even higher than those recorded during and after the 2008 financial crisis.
According to John Mulligan, this could lead to a structural change in the demand for gold, thanks to the expansion of the investor base:
“The last crisis aroused the interest of European private investors in gold and changed the position on the precious metal of central banks, which went from being sellers to buyers. Gold proved its value as a haven when it was most needed, and those who bought it then have even maintained substantial demand for the metal .
This can cause an important structural change, which is the appreciation of gold by institutional investors and that can have enormous relevance for gold in the long term, convincing other investors that the metal is a better solution for several years to come. that with the aim of giving a ‘pitch’ in the short term.
So when someone close to you wonders why gold has lost a few dollars from one day to the next, you already have arguments to answer them. Or, if you prefer, just show him this graph of the evolution of the price of gold since 1972 , where he can see that the line is always rising.…
The post The Covid19 Crisis Triggers Demand In Gold appeared first on Best Gold IRA Companies.
) [4] => Array ( [title] => Why Is The Purity of Gold Measured In Karats? [link] => https://goldiracompanies.best/why-is-the-purity-of-gold-measured-in-karats/ [dc] => Array ( [creator] => Jeromy Wallen ) [pubdate] => Sat, 26 Nov 2022 07:08:44 +0000 [category] => Gold [guid] => https://goldiracompanies.best/?p=37 [description] =>
When we mention the word ‘carat’, a high percentage of those who hear it are likely to immediately associate it with diamonds or other precious stones. However, the carat was originally a unit of measurement for gold and is still used to refer to the purity of this metal. In this post we are going to explain where the term comes from and how many carats gold has according to its purity.
Since time immemorial, the value of gold has been related to its purity. It seems logical that two pieces of gold of the same weight do not have the same value, if in one of them the gold is mixed with another metal and in the other it is pure.
For this reason, it became necessary from the beginning of its use as a means of payment to establish a way of evaluating the purity of the gold pieces that were used as coins. We are talking about transactions carried out many centuries ago.
Gold as a means of payment
As explained by the Australian Perth Mint , one of the world’s leading mints (which mints bullion like the Kangaroo or the Koala ), the physical properties of gold, such as its durability, density and brightness, had made it the natural choice as a store of value even before it began to be used as a means of payment.
Indeed, about 2,000 years before the first coins were minted, a great innovation that appeared around 700 BC. C. (see image), gold was already used as a means of payment. The problem was that, in each transaction, the purity of the metal had to be proven and weighed on a scale to determine its exact weight.
The need to verify the purity of gold forced the creation of a specific system for this purpose, a system that has been maintained throughout the centuries and was later extended to precious stones as well.
The carat, unit of measurement
The system that was established then to measure the purity of gold and that has survived to this day, is based on a unit of measurement: the carat.
The etymological origin of ‘carat’ is in the Greek word ‘keration’, which passed into Arabic as ‘qīrāṭ’ and, from there. Designates the carob (whose scientific name is Ceratonia siliqua). Its relationship with gold is given because the seeds of this fruit were used as a standard to weigh gold.
This is because they are very regular seeds (they are all exactly the same), weighing a fifth of a gram, so they were considered very appropriate to serve as a reference in terms of the weight of gold and precious stones.
Hence, the carat was established as a measure of weight for gold. Each carat equaled 0.199 grams.
From carat to troy ounce
Over the centuries, the units of measurement were perfected and gold began to be weighed in a new measure that became the standard for many years: the grain (‘grain’ in English).
Each grain weighed 0.064 grams. For larger quantities it became necessary to acquire new units of measure. Thus, the so-called troy ounce was established, which took its name from the French city of Troyes, in whose important medieval market it began to be used.
This new measurement was equivalent to 480 grains or, what is the same, 31.10 grams . Do not confuse the troy ounce , intended to measure precious metals, with the conventional ounce or ‘avoirdupois’ , which is equivalent to 28.35 grams , and which is used in Anglo-Saxon countries as a unit of weight for any material.
The coexistence of the grain and the troy ounce forced the adoption of the custom of expressing the weight in grains and the price in troy ounces.
Carats of purity
At present, the carat has remained as the unit of measurement of the purity of gold. In an alloy that contains gold along with other metals, one carat is equal to 1/24 of pure gold . That is to say, that pure gold, without mixing with any other metal, would have 24 carats (24/24).
Pure gold, 24 carats (99.99% gold) , is used to mint investment coins and to make bars. It is soft, highly malleable and resistant to rust and corrosion, making it ideal for investment gold, which remains stored for years in vaults.
On the other hand, it is not usual for it to be used in jewelry, since being pure gold, it is more expensive and also, gold is a soft metal that has to be alloyed with others to increase its resistance to wear.
22 – carat gold (91.67% gold) is more resistant, when mixed with other metals such as silver or copper. It can be used in jewelry and also for minting investment coins.
In fact, the first bullion in history, the South African Krugerrand , is minted in 22-carat gold, mixed with copper, which gives it its characteristic reddish glow.
British gold sovereigns are also minted in 22-carat gold, as are unadorned gold jewelery such as wedding bands, chains or bracelets.
However, in jewelry, the most common is to use 18-carat gold (75% gold) , which reduces the price of the pieces and increases their resistance to wear, allowing filigree and intricate designs to be made that, if the piece were made of pure gold, they would not withstand daily use.
…
The post Why Is The Purity of Gold Measured In Karats? appeared first on Best Gold IRA Companies.
[content] => Array ( [encoded] =>When we mention the word ‘carat’, a high percentage of those who hear it are likely to immediately associate it with diamonds or other precious stones. However, the carat was originally a unit of measurement for gold and is still used to refer to the purity of this metal. In this post we are going to explain where the term comes from and how many carats gold has according to its purity.
Since time immemorial, the value of gold has been related to its purity. It seems logical that two pieces of gold of the same weight do not have the same value, if in one of them the gold is mixed with another metal and in the other it is pure.
For this reason, it became necessary from the beginning of its use as a means of payment to establish a way of evaluating the purity of the gold pieces that were used as coins. We are talking about transactions carried out many centuries ago.
Gold as a means of payment
As explained by the Australian Perth Mint , one of the world’s leading mints (which mints bullion like the Kangaroo or the Koala ), the physical properties of gold, such as its durability, density and brightness, had made it the natural choice as a store of value even before it began to be used as a means of payment.
Indeed, about 2,000 years before the first coins were minted, a great innovation that appeared around 700 BC. C. (see image), gold was already used as a means of payment. The problem was that, in each transaction, the purity of the metal had to be proven and weighed on a scale to determine its exact weight.
The need to verify the purity of gold forced the creation of a specific system for this purpose, a system that has been maintained throughout the centuries and was later extended to precious stones as well.
The carat, unit of measurement
The system that was established then to measure the purity of gold and that has survived to this day, is based on a unit of measurement: the carat.
The etymological origin of ‘carat’ is in the Greek word ‘keration’, which passed into Arabic as ‘qīrāṭ’ and, from there. Designates the carob (whose scientific name is Ceratonia siliqua). Its relationship with gold is given because the seeds of this fruit were used as a standard to weigh gold.
This is because they are very regular seeds (they are all exactly the same), weighing a fifth of a gram, so they were considered very appropriate to serve as a reference in terms of the weight of gold and precious stones.
Hence, the carat was established as a measure of weight for gold. Each carat equaled 0.199 grams.
From carat to troy ounce
Over the centuries, the units of measurement were perfected and gold began to be weighed in a new measure that became the standard for many years: the grain (‘grain’ in English).
Each grain weighed 0.064 grams. For larger quantities it became necessary to acquire new units of measure. Thus, the so-called troy ounce was established, which took its name from the French city of Troyes, in whose important medieval market it began to be used.
This new measurement was equivalent to 480 grains or, what is the same, 31.10 grams . Do not confuse the troy ounce , intended to measure precious metals, with the conventional ounce or ‘avoirdupois’ , which is equivalent to 28.35 grams , and which is used in Anglo-Saxon countries as a unit of weight for any material.
The coexistence of the grain and the troy ounce forced the adoption of the custom of expressing the weight in grains and the price in troy ounces.
Carats of purity
At present, the carat has remained as the unit of measurement of the purity of gold. In an alloy that contains gold along with other metals, one carat is equal to 1/24 of pure gold . That is to say, that pure gold, without mixing with any other metal, would have 24 carats (24/24).
Pure gold, 24 carats (99.99% gold) , is used to mint investment coins and to make bars. It is soft, highly malleable and resistant to rust and corrosion, making it ideal for investment gold, which remains stored for years in vaults.
On the other hand, it is not usual for it to be used in jewelry, since being pure gold, it is more expensive and also, gold is a soft metal that has to be alloyed with others to increase its resistance to wear.
22 – carat gold (91.67% gold) is more resistant, when mixed with other metals such as silver or copper. It can be used in jewelry and also for minting investment coins.
In fact, the first bullion in history, the South African Krugerrand , is minted in 22-carat gold, mixed with copper, which gives it its characteristic reddish glow.
British gold sovereigns are also minted in 22-carat gold, as are unadorned gold jewelery such as wedding bands, chains or bracelets.
However, in jewelry, the most common is to use 18-carat gold (75% gold) , which reduces the price of the pieces and increases their resistance to wear, allowing filigree and intricate designs to be made that, if the piece were made of pure gold, they would not withstand daily use.
…
The post Why Is The Purity of Gold Measured In Karats? appeared first on Best Gold IRA Companies.
) [summary] =>When we mention the word ‘carat’, a high percentage of those who hear it are likely to immediately associate it with diamonds or other precious stones. However, the carat was originally a unit of measurement for gold and is still used to refer to the purity of this metal. In this post we are going to explain where the term comes from and how many carats gold has according to its purity.
Since time immemorial, the value of gold has been related to its purity. It seems logical that two pieces of gold of the same weight do not have the same value, if in one of them the gold is mixed with another metal and in the other it is pure.
For this reason, it became necessary from the beginning of its use as a means of payment to establish a way of evaluating the purity of the gold pieces that were used as coins. We are talking about transactions carried out many centuries ago.
Gold as a means of payment
As explained by the Australian Perth Mint , one of the world’s leading mints (which mints bullion like the Kangaroo or the Koala ), the physical properties of gold, such as its durability, density and brightness, had made it the natural choice as a store of value even before it began to be used as a means of payment.
Indeed, about 2,000 years before the first coins were minted, a great innovation that appeared around 700 BC. C. (see image), gold was already used as a means of payment. The problem was that, in each transaction, the purity of the metal had to be proven and weighed on a scale to determine its exact weight.
The need to verify the purity of gold forced the creation of a specific system for this purpose, a system that has been maintained throughout the centuries and was later extended to precious stones as well.
The carat, unit of measurement
The system that was established then to measure the purity of gold and that has survived to this day, is based on a unit of measurement: the carat.
The etymological origin of ‘carat’ is in the Greek word ‘keration’, which passed into Arabic as ‘qīrāṭ’ and, from there. Designates the carob (whose scientific name is Ceratonia siliqua). Its relationship with gold is given because the seeds of this fruit were used as a standard to weigh gold.
This is because they are very regular seeds (they are all exactly the same), weighing a fifth of a gram, so they were considered very appropriate to serve as a reference in terms of the weight of gold and precious stones.
Hence, the carat was established as a measure of weight for gold. Each carat equaled 0.199 grams.
From carat to troy ounce
Over the centuries, the units of measurement were perfected and gold began to be weighed in a new measure that became the standard for many years: the grain (‘grain’ in English).
Each grain weighed 0.064 grams. For larger quantities it became necessary to acquire new units of measure. Thus, the so-called troy ounce was established, which took its name from the French city of Troyes, in whose important medieval market it began to be used.
This new measurement was equivalent to 480 grains or, what is the same, 31.10 grams . Do not confuse the troy ounce , intended to measure precious metals, with the conventional ounce or ‘avoirdupois’ , which is equivalent to 28.35 grams , and which is used in Anglo-Saxon countries as a unit of weight for any material.
The coexistence of the grain and the troy ounce forced the adoption of the custom of expressing the weight in grains and the price in troy ounces.
Carats of purity
At present, the carat has remained as the unit of measurement of the purity of gold. In an alloy that contains gold along with other metals, one carat is equal to 1/24 of pure gold . That is to say, that pure gold, without mixing with any other metal, would have 24 carats (24/24).
Pure gold, 24 carats (99.99% gold) , is used to mint investment coins and to make bars. It is soft, highly malleable and resistant to rust and corrosion, making it ideal for investment gold, which remains stored for years in vaults.
On the other hand, it is not usual for it to be used in jewelry, since being pure gold, it is more expensive and also, gold is a soft metal that has to be alloyed with others to increase its resistance to wear.
22 – carat gold (91.67% gold) is more resistant, when mixed with other metals such as silver or copper. It can be used in jewelry and also for minting investment coins.
In fact, the first bullion in history, the South African Krugerrand , is minted in 22-carat gold, mixed with copper, which gives it its characteristic reddish glow.
British gold sovereigns are also minted in 22-carat gold, as are unadorned gold jewelery such as wedding bands, chains or bracelets.
However, in jewelry, the most common is to use 18-carat gold (75% gold) , which reduces the price of the pieces and increases their resistance to wear, allowing filigree and intricate designs to be made that, if the piece were made of pure gold, they would not withstand daily use.
…
The post Why Is The Purity of Gold Measured In Karats? appeared first on Best Gold IRA Companies.
[atom_content] =>When we mention the word ‘carat’, a high percentage of those who hear it are likely to immediately associate it with diamonds or other precious stones. However, the carat was originally a unit of measurement for gold and is still used to refer to the purity of this metal. In this post we are going to explain where the term comes from and how many carats gold has according to its purity.
Since time immemorial, the value of gold has been related to its purity. It seems logical that two pieces of gold of the same weight do not have the same value, if in one of them the gold is mixed with another metal and in the other it is pure.
For this reason, it became necessary from the beginning of its use as a means of payment to establish a way of evaluating the purity of the gold pieces that were used as coins. We are talking about transactions carried out many centuries ago.
Gold as a means of payment
As explained by the Australian Perth Mint , one of the world’s leading mints (which mints bullion like the Kangaroo or the Koala ), the physical properties of gold, such as its durability, density and brightness, had made it the natural choice as a store of value even before it began to be used as a means of payment.
Indeed, about 2,000 years before the first coins were minted, a great innovation that appeared around 700 BC. C. (see image), gold was already used as a means of payment. The problem was that, in each transaction, the purity of the metal had to be proven and weighed on a scale to determine its exact weight.
The need to verify the purity of gold forced the creation of a specific system for this purpose, a system that has been maintained throughout the centuries and was later extended to precious stones as well.
The carat, unit of measurement
The system that was established then to measure the purity of gold and that has survived to this day, is based on a unit of measurement: the carat.
The etymological origin of ‘carat’ is in the Greek word ‘keration’, which passed into Arabic as ‘qīrāṭ’ and, from there. Designates the carob (whose scientific name is Ceratonia siliqua). Its relationship with gold is given because the seeds of this fruit were used as a standard to weigh gold.
This is because they are very regular seeds (they are all exactly the same), weighing a fifth of a gram, so they were considered very appropriate to serve as a reference in terms of the weight of gold and precious stones.
Hence, the carat was established as a measure of weight for gold. Each carat equaled 0.199 grams.
From carat to troy ounce
Over the centuries, the units of measurement were perfected and gold began to be weighed in a new measure that became the standard for many years: the grain (‘grain’ in English).
Each grain weighed 0.064 grams. For larger quantities it became necessary to acquire new units of measure. Thus, the so-called troy ounce was established, which took its name from the French city of Troyes, in whose important medieval market it began to be used.
This new measurement was equivalent to 480 grains or, what is the same, 31.10 grams . Do not confuse the troy ounce , intended to measure precious metals, with the conventional ounce or ‘avoirdupois’ , which is equivalent to 28.35 grams , and which is used in Anglo-Saxon countries as a unit of weight for any material.
The coexistence of the grain and the troy ounce forced the adoption of the custom of expressing the weight in grains and the price in troy ounces.
Carats of purity
At present, the carat has remained as the unit of measurement of the purity of gold. In an alloy that contains gold along with other metals, one carat is equal to 1/24 of pure gold . That is to say, that pure gold, without mixing with any other metal, would have 24 carats (24/24).
Pure gold, 24 carats (99.99% gold) , is used to mint investment coins and to make bars. It is soft, highly malleable and resistant to rust and corrosion, making it ideal for investment gold, which remains stored for years in vaults.
On the other hand, it is not usual for it to be used in jewelry, since being pure gold, it is more expensive and also, gold is a soft metal that has to be alloyed with others to increase its resistance to wear.
22 – carat gold (91.67% gold) is more resistant, when mixed with other metals such as silver or copper. It can be used in jewelry and also for minting investment coins.
In fact, the first bullion in history, the South African Krugerrand , is minted in 22-carat gold, mixed with copper, which gives it its characteristic reddish glow.
British gold sovereigns are also minted in 22-carat gold, as are unadorned gold jewelery such as wedding bands, chains or bracelets.
However, in jewelry, the most common is to use 18-carat gold (75% gold) , which reduces the price of the pieces and increases their resistance to wear, allowing filigree and intricate designs to be made that, if the piece were made of pure gold, they would not withstand daily use.
…
The post Why Is The Purity of Gold Measured In Karats? appeared first on Best Gold IRA Companies.
) ) [channel] => Array ( [title] => Best Gold IRA Companies [link] => https://goldiracompanies.best/ [lastbuilddate] => Wed, 30 Nov 2022 09:55:32 +0000 [language] => en-US [sy] => Array ( [updateperiod] => hourly [updatefrequency] => 1 ) [generator] => https://wordpress.org/?v=6.1.1 [tagline] => ) [textinput] => Array ( ) [image] => Array ( [url] => https://goldiracompanies.best/wp-content/uploads/2023/02/cropped-logo-26-Flavicon-32x32.png [title] => Best Gold IRA Companies [link] => https://goldiracompanies.best/ [width] => 32 [height] => 32 ) [feed_type] => RSS [feed_version] => 2.0 [stack] => Array ( ) [inchannel] => [initem] => [incontent] => [intextinput] => [inimage] => [current_field] => [current_namespace] => [ERROR] => [_CONTENT_CONSTRUCTS] => Array ( [0] => content [1] => summary [2] => info [3] => title [4] => tagline [5] => copyright ) [last_modified] => Fri, 24 Feb 2023 10:36:26 GMT [etag] => "9299be25c54c1b459a8c647bc75159f2" )