Against the backdrop of global economic uncertainty following the outbreak of the Coronavirus, investors are fleeing en masse in the direction of gold. This confirms the yellow metal’s status as a safe haven of refuge. However, we should not forget to mention that the gold also performed strongly last year.
With a profit of 7% since 1 January, gold outperforms other asset classes such as equities. The price of gouden munten therefore stands at USD 1,689 per troy ounce at levels that have not been recorded for 7 years.
In the summer of 2010 a peak was reached at USD 1,921. This occurred at the end of the major financial crisis. At that time, the crisis of Greek public debt was raging.
With regard to the Coronavirus, the World Health Organisation (WHO) warned of the risks of a pandemic. Against this backdrop, gold has the potential to seek out its historical peaks.
The Coronavirus does not explain everything
The Coronavirus, with the scientific name Covid-19, could possibly put the world economy on the wrong track. Yet this virus is not the only explanation why investors are fleeing to gold.
Also last year, when the virus was not yet present, the gold did well. This was not only due to geopolitical tensions, but also to fears of a slowdown in the world economy.
Another factor is that gold, as a port of refuge, does not have to take into account annoying announcements such as profit warnings.
There is therefore no question of turnover, profit or Ebitda. Gold does not pay out a coupon or dividend. Those who invest in gold only count on the added value that can be realised at the sale.
Another safe haven is the German government bonds. But these currently have a negative return and therefore cost the investor money. Some 15,000 billion dollars in outstanding bonds currently have a negative return.
How to invest in gold at Goldwasser Exchange?
Investing in gold can be done in different ways, for example by buying shares of gold mines like Newmont Mining, Barrick Gold or Anglogold.
Another way is to buy bonds issued by the companies in question. At the moment, however, both the prices of these bonds and the returns offered seem unattractive.
The holding of physical gold entails quite a few restrictions, so the easiest way to invest in gold is the purchase of a tracker which follows the price evolution of the yellow metal.
These trackers or ETFs are very liquid, so they are easily negotiable. Buying a tracker is therefore a simple and quick way to invest in gold.