Have you missed the boat with gold?
The answer to that is a resounding no! Especially if you are an individual, corporation, sovereign wealth fund or central bank looking at gold for its safe haven/wealth preservation qualities. And now it’s easier than ever to invest in gold with the introduction of the G-Coin™ — a digital token, backed by vaulted, conflict-free and responsibly sourced gold.
Today, gold is actually behaving in a much more mature way, almost resembling a grownup asset class. Sure, you’d be feeling smug if you’d bought at sub $1,100 levels but in the big picture it doesn’t matter whether you got in then or are getting in at today’s price of approximately $1,300, per ounce or approximately $42 a gram. With the G-Coin, it’s easier to invest in gold and to use it as a digital currency. The G-Coin is a tokenized gram of gold that has a digital certificate of ownership that can be used for investing, wealth transfer and payments.
A hedge fund manager looking to “trade” the market would disagree wholeheartedly with the statement that gold is behaving in a more mature way, because his job is to maximize returns by trading ranges and jumping on trends. The rest of us just want to hang on to what we’ve got in these uncertain times.
I have gold in my portfolio because it helps me sleep at night. I know that it will trade sideways to lower while all’s well in the world; but I also know that the next time my UK or U.S. equity holdings take a knock for one of any number of reasons, I’ll probably have an overall positive outcome thanks to gold.
And the news on Gold is good. The LBMA 2017 precious metals forecast predicts that the average gold price in 2017 will be 5.3 percent higher than the average price in the first half of January 2017.
The thing to remember with gold is that it goes through cycles of being a commodity and a financial asset/currency. Gold has been a currency since before the credit crisis of 2008 and yet the smartest forecasters still like talking about cost of production, but that’s changing. The gold price is not being driven by fundamentals in the mining industry, it’s not even being overly influenced by the huge scrap flows into and out of India.
It’s all about the fear factor being exercised by people around the world who want to either diversify their risk away from conventional investments or simply to reduce the exposure to their own currency, which is either yielding a negative interest rate or is in danger of depreciation. Gold neutralizes all those risks and does not represent the volatility of alternative investments/currencies such as Bitcoin or Ethereum.
A person could draw an analogy with Bitcoin to an extent. Whilst Bitcoin holders have a very different motivation to gold holders, you could say that “entry level” is simply not relevant to Bitcoin investors. If you’ve decided to participate, then it makes no odds whatsoever whether you bought in at $420, $1,000 or $3,000, you are simply “in” or you are not! While the payout profile is likely to be more binary for Bitcoin, I could imagine gold forecasters changing their philosophy to a much more asymmetric forecast next time around with a greater acceptance to a proper upside number.
About the author:
Matthew Keen is lead commodity advisor for Responsible Gold™ and brings more than 30-years of precious metals experience to the team. In 2014, he established Evidens, a precious metal specific consultancy; in that capacity, he has served as an advisor to the World Gold Council (WGC), as well as the Independent Governance Committee for the Dubai Multi Commodity Centre (DMCC) and is a member of the Dubai Gold Advisory Group.