Gold has been an essential component in the financial reserves of nations for centuries, and its appeal is showing no sign of diminishing, with central banks set to be net purchasers of gold once again this year. Indeed, central banks now hold more than 35,000 metric tons of the metal, about a fifth of all the gold ever mined. But what is it about gold that has made it such a key asset for so long?
One of gold’s primary roles for central banks is to diversify their reserves. The banks are responsible for their nations’ currencies, but these can be subject to swings in value depending of the perceived strength or weakness of the underlying economy. At times of need, banks may be forced to print more money, since interest rates, the traditional lever of monetary control, have been stuck near zero for over a decade. This increase in money supply may be necessary to stave off economic turmoil but at the cost of devaluing the currency. Gold, by contrast, is a finite physical commodity whose supply can’t easily be added to. As such, it is a natural hedge against inflation.
As gold carries no credit or counterparty risks, it serves as a source of trust in a country, and in all economic environments, making it one of the most crucial reserve assets worldwide, alongside government bonds.
Gold’s inverse relationship with the US dollar, another major reserve asset, is an added element to its appeal. When the dollar dips in value, gold typically rises, enabling central banks to protect their reserves at times of market volatility.
The profile of the most active central banks has changed, with the traditional economic powerhouses such as the U.S., Germany, France and Italy no longer buying more gold but instead retaining the substantial holdings they already have. The U.S. possesses the most gold, with over 8,100 tons, which equates to almost 78 percent of its total foreign reserves. That’s more than double Germany’s holdings of more than 3,300 tons, which makes it second on the list and equates to about 74 percent of its reserves.
In their place as purchasers of gold have stepped emerging economies such as Russia, China, Turkey and India. Yet despite the four countries buying substantial quantities of gold over the last decade or so, they still lag behind their Western counterparts, with gold representing just 22 percent of Russia’s reserves, while China’s holdings of just under 2,000 tons represent a mere 3 percent.
More recently, European Union members Poland and Hungary have been making regular additions to their holdings. The statement issued by Hungary’s central bank at the time of its March purchase, which tripled its total gold holdings to 94.5 tons, gave an insight into the asset’s modern-day relevance as well as its enduring appeal. It said that managing “new risks arising from the coronavirus pandemic” played a key role in the bank’s decision, while “the appearance of global spikes in government debts or inflation concerns further increase the importance of gold in national strategy as a safe-haven asset and as a store of value.”
So while the origin of the central banks buying gold may have changed over the years, the reasons for holding the asset have changed little.
Among a plethora of precious metals, gold is the most preferred investment option in India. The charm and prestige of this yellow metal complemented with its high liquidity and inflation capacity make it one of the most sought after investments in the form of jewellery, coins, bars, gold exchange-traded funds, gold funds and sovereign gold bonds schemes.
Regardless of which income class you belong to, physical gold remains a safe and profitable asset that you can consider investing in.
Inflation Risk Protection
In cash investing, long term inflation is a significant risk, especially in India’s growing economic landscape. Having some savings in gold can scale down the risk of inflation. You will be able to understand how gold outperforms the inflation rate by tracking the rates for some duration on online portals.
Money-Saving for Future
It is important to make savings from your regular income for the future. Compared to real estate or fixed deposits, physical gold investments can guarantee stable returns in the future. It is a great option to buy gold coins that come with the NABL certified and quality guarantee.
Easy Buying and Selling
The foremost benefit of investing in gold bars and coins is the convenience of buying from the Kundan’s online platform that ensures NABL certified, guarantees certification and proper receipts for further reference. You can sell gold easily through local traders at a time when the prices are high.
Less Maintenance
The most significant benefit of investing in gold mints is its incomparable ease of maintenance for years. While any other investment option requires some kind of maintenance, gold can be kept safe in your locker for many years without the need for any maintenance.
Price Stability
As per historically available data, the fall in gold prices in the market doesn’t last for long, and even makes a strong comeback. People turn towards gold at the time of financial crisis and the price sees an increase.
Easy Transfer Over Generations
It is a traditional practice in India to pass on investments in gold to children and grandchildren, especially as a gift during marriage and other important events in life.
Loan Against Gold
Every physical gold asset comes with a guarantee for easy liquidation in the market. You can easily pledge them to secure instant loans from banks or financial institutions.
Supplement Stock Market and Real Estate Investment
Despite the good returns the stock market and real estate provide they also come with a lot of long term risks. By investing in gold, the risk can be diversified in the long run as the gold rate will not fall drastically.
Secured Investments
When compared with past rates, it can be noticed that the gold investments can offer complete security to your future as they will have good value in the market even after many years.
Lesser Time Deterioration
The gold assets that you are investing in will not deteriorate in their value in the future. As the value of your gold mints is unaffected by age, you will get good returns and long term security.
One of the top reasons to buy gold is that it serves as a store of wealth that has retained its value over the years.
Gold has played a role in currencies throughout history and has been seen as a valuable material good to possess. It’s seen as an unchanging asset that provides real value and will continue to in the future as well.
Because of its unwavering value over time, buying gold seems like a better long-term option for investing and storing financial wealth than other options.
Compared to fiat currencies, gold has a better track record and tends to fluctuate less over the course of time. That makes it a great choice for maintaining long-term wealth or passing wealth on to your heirs.
2. Gold Can Offer Protection During Uncertain Times
Gold can also serve as a way to reduce your risk during times of crisis and economic uncertainty.
Whether there’s an economic downturn or inflation is high, gold can be a safe investment that can help you get through it. If the US dollar goes down, then gold’s value is likely to still stay the same or go up. Gold prices tend to rise during a recession.
This makes gold well worth having available during these times. It can serve as a hedge against inflation and can help to protect you as the cost of living increases.
Even if the stock market goes down, gold is likely to stay the same or continue going up in value. This means that it serves as a good hedge against other stock market investments that you might be making and will serve to protect you in case they go poorly.
3. There Is No Middleman
An advantage of owning gold bars and coins is that there is no middleman to deal with. You won’t need to have faith that a third party will fulfill its obligations if they go bankrupt or default on the promises that they have made.
When you own physical gold, nothing stands between you and its value. Gold isn’t another party’s liability. If there are economic changes or if an entity goes out of business or goes bankrupt, you’ll still be protected.
Gold will continue holding value despite what happens in the economy, and there will be no counterparty to deal with. This makes gold a very attractive asset to have.
4. Gold Has High Liquidity
Another benefit of physical gold is that it is liquid and easy to sell.
There are multiple ways that you can sell gold jewelry, coins, and bullion, and different parties that you can sell it or trade it to if needed. You can easily go to a local gold dealer or sell your gold online if you choose to do so.
When selling stocks, you’ll often need to wait several days before you can transfer cash to your bank account. Collectibles and other items of value can also take a long time to sell, and there will be fewer people that you could potentially sell to for the right price.
When it comes to gold, selling is easy, and there are many places where you can do it. You won’t have a hard time trading it or converting it to cash when the time comes to do so.
5. Gold Offers More Privacy
One of the best things about buying physical gold is that it can serve as a more anonymous and confidential asset.
Unlike other assets and investments that you may have, banks and other financial institutions won’t know everything about the gold you own. You can buy and store gold anonymously if you choose to do so and without getting a financial institution involved.
For investors who are looking for a private and confidential type of wealth, gold can serve as a good option.
6. Gold Is a Hedge Against Digital Assets
As a tangible asset, physical gold offers some unique benefits.
There are certain risks associated with paper assets, and they can cause problems if not taken into consideration. Because gold is tangible, it can’t be hacked or changed in the way that a bank account or brokerage account potentially could be. You’ll be able to keep gold with you if you choose to do so and can always access it when needed.
Some people prefer to have some non-digital assets in order to protect themselves from potential cyber-attacks or other similar problems. Gold is one of the best tangible assets that you could own and can help mitigate the risk of keeping all of your assets in the digital space.
7. Gold Fees Are Minimal
Compared to some other types of investments, there are fewer fees associated with owning gold.
While it’s possible to store gold at home or on your private property, it’s usually a good idea to get professional storage for it. However, while there will be fees for this gold storage, there will be very few other fees that you’ll have to pay when investing in gold.
Brokerage accounts, on the other hand, come with lots of charges and fees to think about. Other investments can be costly as well.
Gold is a much more straightforward type of investment. There’ll be low maintenance costs, so you can be sure that buying gold won’t cost you much more than its actual value.
8. Gold Can Offer Protection Against Government Overreach
One of the major advantages of buying gold is that it can protect against government overreach.
In times of political turmoil, it’s possible that bank accounts could get frozen or funds could be confiscated. It’s in the realm of possibility that the government may pass laws or take actions that are problematic and that infringe on your rights and your investments. When the economy takes a turn for the worse, the risk that a government will meddle in a citizen’s private affairs rises.
By investing in gold, you’re more likely to protect yourself from government overreach. You can keep your gold at home physically without having a third party involved. You can also choose to store physical gold offshore in another country as well.
9. Gold Maintains Value Better Than Other Precious Metals
Even compared to other precious metals, gold offers some unique advantages. Because gold is used primarily as a valuable material rather than for industrial applications, its value won’t fluctuate as much.
Other metals are used primarily for industrial purposes rather than serving monetary needs. This means that gold is more likely to retain its value during an economic downturn. Other precious metals, including silver, will likely be affected by how much they’re in demand for industrial purposes.
When looking at the history of gold, it does a better job during stock market crashes and recessions and will likely continue to perform well in economic downturns in the future as well.
10. Gold Investments Have a Shorter Learning Curve
One of the top benefits of investing in gold is that there is a much shorter learning curve when compared to other investments.
It takes a lot of knowledge to trade stocks effectively. Dealing with collector’s items such as paintings can also take a lot of effort, knowledge, and experience as well.
While investing in gold, on the other hand, the process is pretty straightforward. This means that you won’t need to worry about getting it wrong or need to put in the effort to constantly learn new things and refine your approach.
Have you ever considered gold as an investment? Or maybe just as a hobby?
In the days of instant online stock trading and financial accounts, sometimes money seems almost make-believe. Many of us no longer see our money as a tangible object.
That’s why there’s something very satisfying and solid about investing in and wanting to buy gold coins. There’s nothing like going to a coin shop, coming out with a small-but-heavy paper bag, and then taking it home and feeling the weight of each coin.
But is it crazy to invest in gold coins in 2023 and beyond? Let’s look at some advantages and disadvantages of buying gold coins as an investment.
At a glance:
Investing in gold can stabilize your portfolio during market declines and safeguard against inflation.
Investing in tangible objects such as gold comes with a risk of theft and no perks of dividends or interest payments.
Alternatives for investing in gold include purchasing mining stocks or buying gold with your IRA investments.
Advantages to buying gold coins
Gold and other hard metals have always been a time-honored part of traditional investment plans. Here’s why:
Gold tends to go up when other investments decline, providing a stabilizing effect for your portfolio.
Gold is a safeguard against inflation.
You don’t have to pay capital gains tax until you sell.
Nobody must know you have it — if that matters to you.
In worst-case financial scenarios, such as massive currency devaluation, you can use gold and silver to buy and sell. That may sound crazy, but it has happened in other countries.
Disadvantages to buying gold coins
On the other hand, there are some disadvantages to buying gold:
A thief could take your gold if you’re not careful.
Unlike stocks and bonds, a purchase of gold is not an investment in company growth. You won’t get dividends or interest from tangible gold.
You may have to wait years for gold to go up in value.
How to buy and keep gold coins
If you decide to buy gold coins, it’s best to get them from a reputable dealer or financial institution. We wouldn’t recommend buying gold coins on Craigslist, for example (but you do you). If you buy gold coins from individuals or from anyone else you’re not sure of, have their authenticity verified first. You don’t want to unwittingly end up with a collection of gold-plated lead.
U.S. gold coins come in one, one-half, one-quarter, and one-tenth ounce denominations. You pay a premium over the price per ounce when you buy gold coins, which is how the dealer makes a profit. You may pay a higher premium if you buy gold coins that are less than one ounce each. You should generally buy bullion coins, such as the American Gold Eagle, Canadian Gold Maple Leaf, or South African Krugerrand. Collector’s coins, called numismatic coins, are a different game than bullion gold coins. They can sell at a very high premium, and their prices are dependent on more factors. Unless you are very knowledgeable about collector’s coins, stick with bullion coins.
Don’t get carried away buying gold either. Perhaps 5-15% of your portfolio should be in hard assets like gold coins. Most investors want most of their portfolios to be in growth funds, stocks, or other investments. That’s a good way to get the best balance of risk and return.
Where to store gold coins
Once you buy gold coins, make sure to keep them in their cases, away from scratches and fingerprints.
Don’t even think of hiding gold in your house, unless you have a safe. Thieves know where to look, or they can find it with a metal detector. Instead, consider renting a safe at a bank where you can keep your gold and other valuables.
Investing in gold coins in other ways
Did you know you can even buy coins with your Individual Retirement Arrangement (IRA)? There’s just one catch — you won’t be able to take these coins home. Instead, your IRA administrator will keep them in a vault for you. Coins must meet standards of purity to qualify as IRA investments.
There are other ways to invest in gold without actually bringing home any gold coins. By purchasing gold mining stock, gold certificates, or exchange-traded products, for example, you can gain the advantages of gold’s hedge against inflation without lugging heavy gold coins around or worrying about where to keep them.
If Gold is becoming the world’s new reserve currency
Why central banks have started buying up more Gold as a reserve
How economic sanctions has influenced central banks actions towards the USD and Gold
As the world’s most well-known precious metal, Gold has been used as a store of value for thousands of years. In modern times, gold has become a popular investment option, particularly as a hedge against inflation and economic uncertainty. Recently, there has been talk that gold is becoming the new reserve currency, replacing the US dollar. In this article, we will explore this topic and provide insights into Gold investing, Gold prices and the USD (US dollar).
What is Gold investing?
Gold has been a reliable store of value for centuries, making it an attractive investment option for those looking to diversify their portfolio. One of the most significant benefits of investing in Gold is its ability to act as a hedge against inflation. As inflation rises, the value of currencies decreases, but the value of Gold tends to remain stable. Additionally, gold has a low correlation with other assets, such as stocks and bonds, making it a good portfolio diversification tool. However, as with any investment, there are risks involved, such as fluctuations in the price of Gold and the performance of the companies in the Gold mining industry.
Gold investing refers to the process of buying and holding physical Gold or Gold-related financial instruments with the aim of generating a return on investment.
There are several ways to invest in Gold:
Physical Gold: Investors can buy physical Gold in the form of Gold coins, bars or jewelry. The value of physical gold is determined by its weight and purity, and investors can sell their gold for a profit when its value increases.
Gold ETFs: Exchange-traded funds (ETFs) that track the price of Gold are a popular way to invest in Gold. These funds hold physical Gold and allow investors to buy and sell shares on an exchange like stocks.
Gold mining stocks: Investors can also invest in Gold mining stocks, which are stocks of companies that mine and produce Gold. The value of these stocks is directly related to the price of Gold and the performance of the company.
Gold CFDs: CFDs allow investors to buy or sell Gold without owning the underlying asset physically. As a type of derivative, it enables both retail and institutional investors to speculate on the price movement of Gold prices with leverage, meaning that their potential return on investment (profits or losses) is magnified. Learn more about Gold CFD trading.
Is Gold Becoming the World’s New Reserve Currency?
The idea that Gold is becoming the world’s new reserve currency is not new, and many analysts have debated this topic for years. While gold has been used as a form of currency for centuries, it is unlikely to replace the US dollar as the world’s reserve currency anytime soon. However, gold’s role as a reserve asset is growing, with several central banks increasing their gold reserves in recent years.
Why have central banks started buying up Gold as a reserve instead of USD?
Central banks around the world have been increasing their Gold reserves in recent years, leading some to question whether Gold is becoming the new reserve currency. Data from the World Gold Council showed that Gold demand increased by 18% in 2022 to more than 4,700 tonnes, which was in part driven from the biggest purchases of Gold by central banks for 55 years. There are several reasons why central banks have started buying Gold as a reserve instead of the USD:
Diversification: Central banks have traditionally held US dollars as a reserve currency due to its stability and liquidity. However, recent geopolitical tensions and economic uncertainties have led central banks to diversify their reserves to reduce their exposure to the USD. Gold provides a hedge against inflation and economic uncertainty, making it an attractive option for diversifying a reserve portfolio.
The limited supply: Gold is a finite resource, which means its supply is limited. This makes it a valuable asset to hold as a reserve, as it is less susceptible to inflation and currency fluctuations than fiat currencies.
A store of value: Gold has a long history as a store of value, with its value remaining relatively stable over time. Central banks hold reserves to maintain the value of their currency, and Gold can help achieve this goal due to its stability and long-standing reputation as a store of value.
A shift in global power: As emerging economies, such as China and Russia, continue to grow and gain economic power, they are increasingly looking for alternatives to the USD as a reserve currency. Holding Gold provides these countries with a way to diversify their reserves and reduce their reliance on the USD.
Has economic sanctions from the United States influenced Central Banks to buy more Gold?
The role of economic sanctions by the United States has certainly played a role in encouraging Gold buying by certain central banks. Economic sanctions are a tool used by the US government to restrict trade and financial transactions with specific countries, entities or individuals. These sanctions can have a significant impact on the economies of the targeted countries, as well as their access to global financial systems.
In recent years, the US government has used economic sanctions as a foreign policy tool more frequently, targeting countries such as Iran, Russia, and Venezuela. This has led these countries, along with others, to seek ways to reduce their reliance on the US dollar and the US financial system.
One way that central banks have sought to reduce their exposure to the US financial system is by increasing their holdings of Gold. Gold is a tangible asset that is not subject to US sanctions, and therefore offers a level of protection against the economic impact of sanctions.
For example, in 2018, Turkey increased its Gold holdings citing the need to diversify its reserves amid US sanctions. Similarly, Russia and China have also been increasing their Gold holdings in recent years, in part to reduce their exposure to the US dollar and the US financial system. In the final months of 2022, China bought 62 tonnes of Gold and in effect lifting its total bullion reserves above 2,000 tonnes for the first time ever.
The term Gold Reserve Act of 1934 refers to a law that took away the title of all gold and gold certificates held by private individuals and institutions and transferred ti to the United States Treasury. The Act, which also included gold held by the Federal Reserve Bank, was signed into law by President Franklin D. Roosevelt. Banks, financial institutions, and the Federal Reserve could no longer exchange U.S. dollars for gold.1
Understanding the Gold Reserve Act of 1934
The Gold Reserve Act of 1934 was the culmination of emergency executive measures and banking laws passed under Franklin D. Roosevelt in his first 100 days in office, which fell during the 1933 banking crisis. In March and April of 1933, Roosevelt declared a national bank holiday to stem a run on the banks and passed the Emergency Banking Act of 1933 that allowed the recapitalization of banks by the Federal Reserve Bank.2 Congress also passed the Banking Act of 1933 in June, also known as the Glass-Steagall Act, which created deposit insurance and other policies to stabilize banking.3
On April 5, 1933, Roosevelt issued Executive Order 6102, forbidding “the hoarding of gold coin, gold bullion, and gold certificates within the continental United States.”4 The order required individuals, businesses, and banks to deliver their gold and gold certificates to the Federal Reserve in exchange for $20.67. This made the trade and possession of gold of more than $100 a criminal offense.4 This, in effect, suspended the gold standard that the U.S. followed since the 1800s.5
The subsequent passing of the Gold Reserve Act of 1934 completed this suspension and the transfer of gold from private hands to the U.S. Treasury. As mentioned above, the law required that the Federal Reserve, private individuals, and business entities remit any gold in their possession over the value of $100 to the government.6
Gold was functionally converted from a currency to a commodity. Even gold coins at the Treasury were ordered to be melted down and converted to gold bars. The act also fixed the weight of the dollar at 15.715 grains of nine-tenths fine gold.1 It changed the nominal price of gold from $20.67 per troy ounce to $35. By doing this, the Treasury saw the value of their gold holdings increase by $2.81 billion.7
The price of gold was fixed until 1971, when then-President Richard Nixon created a fiat currency system by ending the convertibility of U.S. dollars into gold.
Special Considerations
Though the Act didn’t technically take the U.S. off the gold standard, it did give the government more control over the domestic money supply. It also allowed the Treasury to buy gold internationally to further devalue the dollar in foreign exchange markets.
Roosevelt and the Congress’s action were not entirely popular, though, and several cases were brought before the U.S. Supreme Court in 1935 to test the constitutionality of the government’s requisitioning of domestic gold, notably:
Norman v. Baltimore & Ohio Railroad
United States v. Bankers Trust Co.
Nortz v. United States
Perry v. United States
These cases rested on the Fifth Amendment to the Constitution, which forbids private property to be taken for public use without just compensation.8
In the first two cases, the question before the court was whether the federal government had the power to regulate contracts with gold clauses. In a five-to-four ruling, the court said the government has plenary power over the money supply, and therefore it also had the power to abrogate gold clauses in contracts.
In the other two cases, the plaintiffs argued that they were not justly compensated for their gold because they paid the lower price of $20.67 after the price of gold on the international market rose to more than $50. The Supreme Court held that the compensation given to the plaintiffs was fair because the remuneration was for the face amount of the currency, not for the intrinsic value of the gold. The legal reasoning is complicated, and a thorough review is given by Kenneth W. Dam in “From the Gold Clause Cases to the Gold Commission: A Half-Century of American Monetary Law.”
It’s natural and even prudent for an investor to wonder if a particular asset is a good investment or not. That’s especially true for gold, since it’s an inert metal and doesn’t earn any interest.
Let me tell you that gold continues to be a popular investment for ages. It has been respected all over the world for its value and rich history.
People have wanted to hold gold for various reasons. With various innovations, gold trading has evolved from physical gold to virtual trading. However, all forms of gold are equally attractive for investments.
There are various reasons why people, especially Indians, invest in gold to meet their financial goals.
However, there are those that invest in gold for the wrong reasons.
Here are the top 10 reasons why every investor should have gold in their portfolio, with an emphasis on investment implications.
10 Reasons to Invest in Gold
Here are 10 right reasons why one should have gold in their investment portfolios.
1. Gold Is Money
Gold is not used as a currency today, but its role as money makes it superior to any currency.
In fact, gold has been money longer than any currency in history. Gold has been a store of value for at least 3,000 years, while one of the longest currencies in history, the British Pound Sterling, is about 1,200 years old.
One of the crucial promises of money is that it serves as a long-term store of value. Gold fulfills this promise better than any currency. Look how much purchasing power all major government currencies have lost compared to gold.
Since 1900, physical gold has been the best long-term store of value.
There were periods wherein the short-term currencies grew in value more than gold, but over the long-term, this chart demonstrates exactly why the rich have always held it in their investment portfolio.
2. Gold Investments Cannot Go Bankrupt!
If you hold gold, no paper contract is needed to make it whole. No middleman or other party is necessary to fulfil a contractual obligation.
That’s because gold is the only financial asset that is not simultaneously some other entity’s liability.
This is important because gold will be the last man standing when bubbles pop or a crisis hits. That’s a powerful tool to have in your portfolio when things start to go wrong in your country or economy.
It also means gold won’t go to zero. It’s never happened in its 3,000+ year history.
Gold will always have value. You can always sell it if you need currency.
3. Gold Investments Act as an Inflation Hedge
The hedge against inflation is the traditional motive behind the investment in gold. The yellow metal serves as an inflation hedge in the long run.
When inflation rises, the value of the currency goes down. Over the long-term, almost all major currencies have depreciated in value relative to gold.
But gold prices have doubled over the last five years and quadrupled in a decade.
In a country like India, where every saving instrument may not provide returns, gold fares well when the inflation rate exceeds the interest rate.
Likewise, the annualized return of gold over ten years has been way higher than that of inflation. What this means is that gold has given individuals a real rate of return.
4. Gold is a Tangible Asset
Gold is one of the few assets that is tangible, and thus, it creates a perception of safety among investors.
Purchasing gold is much easier compared to purchasing other tangible assets such as real estate.
Also, because of this feature, while assets stored digitally are prone to hacking and other misuses, gold is free from such concerns.
However, it does come with its own risks. So, be mindful of them.
5. Gold is Highly Liquid
Gold is also ideal because it is easy to sell and can be carried in your pocket anywhere you go.
Gold is highly liquid. Virtually any jewelry dealer in the world will recognize gold and buy it from you. You can sell it to your local coin shop, a pawn shop, a private party, or an online dealer. It can always be sold for cash or traded for goods.
The process is frequently quicker than selling a stock in your brokerage account.
It usually takes 3 business days for settlement before cash can be transferred to your bank account or a check mailed.
And other collectables, like artwork, could take longer to sell, have a smaller customer base and would likely entail a big commission. But with gold, you can get cash or goods in hand on the spot with no hoops to jump through.
This liquidity means you can take gold with you literally anywhere in the world. And if you’re uncomfortable crossing a border with it, you can buy gold you can transport.
6. Gold Requires No Specialized Knowledge
Can you spot a real diamond?
Can you look at two paintings and tell which one is fake?
Can you pick stocks or invest in other financial securities of your own knowledge alone?
Gold investment requires none of this. No special skills, training, or equipment are needed to buy or recognize gold.
Unlike stocks, bonds, cryptocurrencies, real estates, among a series of other investments, gold requires no specialized skills. As an investor, all you need to do is simply buy and store your gold.
There are no tedious charts to compare all day long, or trading bots to trust with your investments.
Buying gold is relatively straightforward.
7. Gold Can be Your Saviour
One of gold’s strongest advantages is that it can protect your investments, even your standard of living, during periods of an economic, monetary, or geopolitical crisis. And depending on the nature of the crisis, gold can move from a defensive tool to an offensive profit machine.
Many investors use gold in times of financial distress.
The Indian Government itself airlifted national gold reserves to pledge to the International Monetary Fund (IMF) in the early 1990s, to cover the balance of payment debts.
Households also sell or pledge the precious metal in times of financial distress. It is a refuge in times of trouble.
8. For Portfolio Diversification
It is believed by some economists that gold is a highly effective portfolio diversifier due to its low to negative correlation with all other major asset classes.
However, some suggest that there is evidence that when equities are under stress, in other words, when shares are falling rapidly in value, an inverse correlation can develop between gold and equities.
Gold protects one’s portfolio from volatility because the factors, both at the macro-economic and micro-economic fronts that affect the returns of most asset classes do not significantly influence the price of gold.
For a given level of returns from a portfolio, the risk or volatility can be reduced by adding gold to it.
9. Risk-Reduction and Wealth Creation can be Achieved With Investing in gold
Gold as an investment offers dual benefits of risk-reduction and wealth creation.
Even if there is no economic crisis or geopolitical tensions, the precious metal can still give decent returns in the long term.
Its past track record has already proven that. In case there is an economic or political shock, gold as an investment provides the perfect investment hedge, against capital losses from equities.
10. Gold as Investment Absorbs any Jitters or Value-erosion in a Country’s Currency
In case the local currency of an economy sees any major fall owing to macro-economic factors, gold provides investors with a cushion.
When India’s currency remained under acute pressure in 2013-2014, all major global currencies still managed to support gold price in rupee terms.
Gold Coin Reserve, a tethered cryptocurrency, is an interesting token with investment potential. The emergence of blockchain technology has revolutionised sectors across the globe from big data to supply chain management. The Gold Coin Reserve was developed alongside the original decentralised systems that have gone onto spearhead the digital currency movement.
Whilst these cryptocurrencies have created huge value, they are yet to integrate themselves into mainstream rhetoric. There has been much speculation as to why this is the case but most agree that the volatility of these currencies fails to deliver any real rate of return to the holder. Enter the Gold Coin Reserve – an asset tethered to the price of gold, finally able to provide the stability not currently offered by the big names in crypto. So, what is GCR? And what is its potential?
The Gold Coin Reserve (GCR) token is a tradeable digital asset, the value of which is tethered to the US federal reserve gold. The stablecoin is currently traded on the Ethereum network but will soon be hosted on the newly developed GCR network. The GCR blockchain operates as a hybrid currency, integrating into internal banking systems whilst also being used as a transactional instrument by the general public.
The blockchain infrastructure is utilised by banks across the world, enjoying unlimited economic integration, scalability and adoptability. The GCR asset has already gained a popular following, supporting an average of $16,000,000 in daily transactions.
The network has been developed by the same people that developed blockchains for global central banks but, for the first time, the technology has been brought to the retail market. The objective is to create a regulatory-compliant network that allows companies to build and then trade their tokens on a secondary market.
The network was built to facilitate continual growth, adopting a stable fee structure and high network speeds, unlike blockchains such as Ethereum, in which speeds increase with usage. The Gold Coin Reserve is backed by eMoney Bank.
How The GCR Works
The GCR digital asset operates in a similar way to Ethereum but there are a few major distinctions that are unique to GCR:
Unique Mining – Creates a self-sustaining, distributed ledger. Token holders are rewarded for contributing to the network by validating transactions. This provides another point of decentralisation, removing the need for validation intermediaries.
10% Miner’s RoR – The annual rate of return for miners is up to 10%, compounded. This may fluctuate somewhat, depending on the relative stability and network conditions.
Stablecoin Function – Limits price volatility by implementing market-making services across all trading platforms.
Business Development – The GCR network will provide business development services such as priority access and discounted listings on popular digital asset exchanges.
The GCR Blockchain
The GCR cryptocurrency runs off a relatively unique blockchain, with some standout features, including:
Hybrid Chain – Users can operate across both private and public chains. The flexibility enables greater control over fees, compatibility and custody of data.
Aggregate Transactions – The GCR network can merge multiple transactions into a single-use smart contract. The process enables clients to pay fees on behalf of another, in addition to benefits for business operations.
Enterprise-Grade Security – In-built security features help fortify the network, mitigating risks and protecting against attacks on the network. Users can also create advanced multi-signature accounts, which aids account recovery and the monitoring of fraud.
Account and Token Restrictions – Token creation can be restricted from any account, which enables clients to more easily create compliant assets, such as IDs.
GCR Alliance Platform
The Gold Coin Reserve is more than just a stablecoin, it also provides a platform for cryptocurrency speculation and trading. The Alliance platform allows clients to convert between all major crypto and fiat currencies in one place, also supporting crypto staking for the GCR, BTC and ETH blockchains. The platform has no fees and can be accessed from any device, be it a PC or smartphone.
Pros Of Gold Coin Reserve
There are several positives to trading with GCR, a few of the most notable are:
Control – GCR blockchain technology gives traders greater control over transactions.
Security – Fully integrated, robust security features are designed to help minimise risks and protect traders.
Demand – With over $16,000,000 reported daily active transactions, there is considerable interest in the system and, with the potential of further integration, this is only set to increase
Stability – Given that GCR is tethered to the price of gold, it is less volatile than many traditional cryptocurrencies.
Cons Of Gold Coin Reserve
The primary drawback of investing in and trading on the GCR system is the level of uncertainty surrounding the technology. Given its novelty, it’s not yet clear how well the technology will integrate into existing systems and, therefore, its value is not easily measurable. As with any exchange, there are risks involved and traders should consider these in full before investing capital.
Security
Security is a serious concern for all traders, especially when it comes to digital assets. Thankfully, the level of security provided by GCR is robust. In fact, the company is rumoured to be announcing a hackathon event in which hackers will be encouraged to try and break into its network.
There have been no reports of security breaches, scams or concerns published by clients or industry professionals. The wealth of financial services experience that the GCR team have is extensive.
Customer Support
The best way to get in contact with the team is via email, though there is no phone number or live chat feature.
Email: support@goldcoinreserve.net
Additional information can be found on social media. You can find the Gold Coin Reserve on Facebook, Twitter, Telegram and LinkedIn.
Getting Started With GCR
Traders and investors can purchase the crypto via bank transfer or with a credit card on the GCR Fiat platform. The withdrawal is quick and simple with competitive conversion rates. The interface enables users to stake USDT in deposits, in addition to purchasing digital assets with Euros. Clients will need to have an account to make purchases, which can be opened on the blockchain company’s website.
Gold Coin Reserve can also be traded on several crypto exchanges, including CoinGecko, CoinMarketCap, CoinTiger, Bitlocus, BakerySwap and PancakeSwap.
Final Word On Gold Coin Reserve
The Gold Coin Reserve is an exciting step in the cryptocurrency movement. The GCR blockchain technology represents a new era of possibilities for digital asset integration in mainstream trade and business in ways that the likes of Bitcoin and Ethereum have been unable to do. GCR distinguishes itself by the stability and security it offers, providing real value to the market. The growing interest and subsequent demand for GCR suggest that the future could be bright for this blockchain.
FAQs
What Is The Maximum Supply Of GCR?
The maximum supply is 3,000.000 GCRR. No more than this will be circulated to stabilise and regulate the currency.
What Is The Market Symbol For Gold Coin Reserve?
The Gold Coin Reserve digital asset is traded on the crypto markets with the symbol GCR.
How Do I Open An Account With Gold Coin Reserve?
To open a live trading account, head to www.goldcoinreserve.io and, in the top-right corner, you’ll find an option to register. Once you have set up your account you can begin purchasing and trading GCR.
What Is The US Gold Coin Reserve?
It is a gold-backed blockchain network. The recently developed network aims to enable businesses to create tokens and trade on a secondary market.
What Is A Gold Coin Reserve Token?
At the heart of the Gold Coin reserve system is a stablecoin, a digital asset traded under the name GCR. The token acts much like a traditional currency and can be traded on markets by investors to generate profits.
