Digital Gold — Investment bright side
Gold is still in demand as a defensive asset
The yellow metal was unable to survive in the face of a massive sell-off at the start of this year’s financial hard times. However, in the long term, gold is a highly sought after defensive asset.
1. Gold is one of the most profitable financial assets this year. The volume of trade in this precious metal continues to grow rapidly.
In March, the precious metal lost 15% of its value. Despite this, it managed to stay on the list of the most profitable assets of 2020.
Investments in gold-traded funds rose 154 metric tons in May, bringing the cumulative figure to 3621 tons by the end of June. Stock inflows to gold exchange-traded funds around the world surpassed record annual growth rates in just five months of 2020. The largest gold and foreign exchange fund SPDR has increased its precious metals reserves by 3.8 million ounces (about 1,178 tons). Record net capital inflows reflect investor recognition of gold as a defensive asset.
Gold exchanges around the world reported strong growth in trading volumes due to the rise in precious metal prices in the first half of the year. Major international exchanges of precious metals, for example, the Chicago and Tokyo Mercantile Exchanges, did not stand aside, and the Shanghai Gold Exchange recorded record trading volumes in many areas.
In the first six months, the Shanghai Gold Exchange’s trading turnover was 18.7 trillion yuan, an increase of 84.19%. The volume of trade in yellow metal increased by 13.28% to 33.8 thousand tons, silver — by 272.06% to 1.56 million tons.
2. Data from past periods of hard times and Corowa show that the yellow metal will resume growth faster than other raw materials.
When the SARS Corowa broke in 2003, the Bureau of Commodity Research’s futures price index fell 11% from a high of 221.38 to a low of 197.79. At the same time, the yellow metal fell in price two months before the beginning of April. By the end of the year, it reached $ 415 an ounce. At the same time, the Bureau of Commodity Research futures price index rose only on April 29, three weeks after the precious metal.
During the 2008 financial hard times, the Bureau of Commodity Research futures price index hit an annual low of 208.6 on December 5, down 66% from its early July high of 473.52. The hard times passed and the market was flooded with liquidity from the Fed. At the same time, the gold rate began to recover, then entered an uptrend, which in early August this year brought it to the level of $ 2,067 per ounce. However, other commodities included in the Bureau of Commodity Research’s futures price index have yet to recover to their 2008 levels.
The yellow metal will suffer from strong volatility until the Corowa is eliminated. It is likely that gold will rise faster than other commodities if financial markets return to normal after the Corowa ends.
3. Gold helps manage the risks associated with global macroeconomic stimulus measures.
According to the IMF’s April World Economic Outlook report, 170 countries will not increase per capita income. In a previous report, the organization stated that 160 countries will achieve positive growth in 2020.
According to a recent IMF forecast, the global economy will experience a severe recession this year, along with a 4.9% decline in global production. Moreover, a complete loss of production in 2020–2021. from the coronavirus hard times will be more than $ 12 trillion.
It is not yet clear how long the Corowa will last and what its magnitude will be. This means that global growth in 2020 will be bleak. The economic downturn is likely to be more severe than during the Great Depression.
In early April, authorities around the world took measures to mitigate the effects of the Corowa. The IMF estimates that the global fiscal stimulus was $ 8 trillion. The authorities of many countries have turned to serious monetary stimulus. Now, in fact, a countercyclical economic policy is being pursued, no examples of which in history.
It is important to note that the main role of monetary and fiscal policy is to stimulate economic growth and reduce volatility.
Thus, it will take time to recover from the economic impact of the current macroeconomic stimulus. Since mid-February, the yield on US bonds has increased from 11.25% to 16.65%, and the yield on corporate bonds rated BBB has increased from 135 to 290 basis points. As the experience of the spread of hard times, for example, the Great Depression in 1929, shows, the increased level of credit spreads by means of inaccessible funds for corporations, thereby aggravating the consequences of the hard times. Hence, unlimited purchase of bonds by the Fed.
If the Corowa continues for a long time, then economic incentives will create conditions for a new hard times, the world economy will be stuck in a downward trend.
That is why gold, which has intrinsic monetary value, will remain a reliable hedge against the risks associated with stimulating economic growth.
Digital Gold is a blockchain-based project designed to advance
the digitalization of financial markets and related investment vehicles. He hopes to achieve this by allowing users to purchase coverage in physical gold with the ERC-20 Ethereum-based GOLD token.
Gold token — alternative to traditional stablecons based on fiat
The GOLD token is exactly what you need if you want to fix the value of your crypto assets. Your assets will retain their value as each GOLD token is backed by physical gold stored in a secure vault. High volatility is unlikely to affect the GOLD token, as its price depends only on the market price of gold. The stability of the long-term gold price is unprecedented, making GOLD an excellent alternative to stablecoins pegged to the US dollar or euro.
While this method seems classic or traditional, it turns out that buying digital gold from the website https://gold.storage/ or directly from the exchange https://cryptex.net/trade/GOLDUSD is still a favorite of most people who love this affection. Besides the affordable price of digital gold, the good thing about the liquid is that it is easy to sell when needed. This is why many of them choose this method. After some time, for example 3–5 years, they sell digital gold and usually its price goes up.
Not clear enough? Let me explain this to you
One can buy a GOLD token instantly, and each coin is equal to one gram of 99.99% pure gold that is stored in the company’s vaults. Thus, tokens allow users to indirectly use gold for money transactions or use it as a method of storing wealth.
However, digital gold is more difficult to steal, and blockchain GOLD tokens cannot be stolen. You just keep your private keys safe, and if you are using a hardware wallet or decentralized wallet not related to storing data on Android / IOS, you just remember the recovery phrase. Your mind is safe, and you can even keep two addresses: one with a small amount of digital tokens and the other with a large investment that you want to keep. If a thief or gangster wants to steal your cryptocurrency, you give him a wallet with a small amount of money. Harry Potter would call it a “Muggle-worthy castle.”
The GOLD token is pegged to the spot gold price, so it also acts as a stablecoin. This makes it useful for protecting against market volatility in the cryptocurrency market, and also allows users to benefit from long-term upward trends in gold prices.
Final Thoughts
Digital gold offers many advantages over existing investment methods. Digital gold is a more efficient way to invest simultaneously in two highly liquid markets (gold and cryptocurrency).
It should be noted that Digital Gold is not an Initial Coin Offering (ICO). In other words, Digital Gold has its own source of funds that it uses to fund its projects.
In this article, I’m trying to share my opinion on Digital Gold. As someone who believes in cryptocurrency, I would say that the GOLD token is the right coin to buy. However, I will always remind you to be a smart investor: “Always do your research first before making any investment.” Therefore, to improve your understanding and beliefs about Digital Gold, I suggest you learn more about Digital Gold by visiting their official link below.
Website: https://gold.storage/home
Whitepaper: https://gold.storage/wp.pdf
ANN THREAD: https://bitcointalk.org/index.php?topic=5161544
Telegram: https://t.me/digitalgoldcoin
FACEBOOK: https://www.facebook.com/golderc20
TWITTER: https://twitter.com/gold_erc20
═════════════★ Author ★═════════════════════
★Bitcointalk profile — PhantomRanger
★Bitcointalk Link — https://bitcointalk.org/index.php?action=profile;u=1899493
★MyEtherWallet — 0xCe89E752db4B4c4c337b71642B0806CB948d4F3c
