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Invest in gold

27 September 2023 68 Views No Comments

What should we invest in?

Whether you are new to bullion investing or not, it is important to understand the difference between the two precious metals – gold and silver – and the two forms in which they are sold – bullion and coin. Before making a decision, it is recommended that you do some research and weigh the pros and cons. There is no definitive right or wrong answer, the choice of what to invest in depends on the circumstances of each investor.

– Investment in gold

Since its discovery, gold has been embedded in many cultures around the world. Whether valued as a currency, a commodity, or simply for its visual beauty, gold has remained a store of value for thousands of years. It is now revered as the most precious commodity in the world. Gold’s scarcity, proven uses and performance all contribute to making gold an ideal investment.

– Demand and supply of gold

Demand for gold can be divided into four main categories: jewelry, investment, technology, and central banking. Demand for gold has been growing steadily in recent years as continued volatility has driven investors to the safe-haven asset of physical gold. Key economic drivers such as the trade war between the United States and China, slowing global growth, etc. have all contributed to the increase in gold prices over the past three years.
Over the past 10 years, there has been a clear upward trend in the purchase of gold bars and coins for investment purposes. After the drop in the price of gold between the fourth quarter of 2013 and the fourth quarter of 2015, 2016 saw a significant increase in the price of gold and thus investor demand for gold. In fact, the two are probably related.
Demand for gold among investors has increased steadily in recent years, and the first quarter has shown the most growth in demand. Globally, gold demand rose 12 percent, boosted by countries such as the United States, Iran, Turkey and India.

-Why invest in gold?
From ancient times to today, gold has always been synonymous with wealth and prosperity. Historically, this precious commodity was a store of cash wealth and was often used for trade. Although gold is no longer in circulation as a standard currency, it remains an inalienable asset. From major central banks to smaller individual investors, many choose to store a significant portion of their cash holdings in this scarce resource.
Physical gold gives investors the opportunity to spread their investment risk through a balanced portfolio, providing them with a store of wealth outside of the banking system. Even though there is no gold standard, gold is still seen and used as a universal currency around the world and is a stable and reliable alternative to printed fiat money.
Time and again, with stock market concerns and economic fragility, we see investors turning to safe assets like gold bullion. A sensible way to diversify a portfolio to protect against risk.


If central banks are so keen on physical gold, can you profit from the investment?


-Gold as an ideal investment base:

Gold investment is an ideal way to accumulate and protect wealth. In addition, due to its negative correlation with stocks and bonds, it is also seen as an ideal way to diversify an investment portfolio.
Although the price of gold may fluctuate in the short term, gold holds its value over longer periods of time and provides a useful hedge against the erosion of fiat currency value.

– The ability to preserve value in times of crisis:

Gold is often referred to as a “crisis commodity” due to its ability to retain value in financial and geopolitical uncertainty. As global tensions increase or trust in governments declines, gold outperforms other investments. Not holding gold means fully trusting the government at all levels and relying on them to maintain the economy.
With the US dollar technically so weak, the global currency’s devaluation is a concern for many, especially those who don’t own gold. If a large devaluation occurs, tangible assets – including gold – will increase in value significantly.
Buying physical gold allows you to hold your assets outside of the banking system, which reduces the risks associated with the bank while diversifying your wealth distribution. Unlike fiat currency, the value of gold is not determined by governments. Fiat currencies have no tangible value and their value is only backed by government laws.

– Increasing demand for investment:

Faced with an uncertain economic future in Europe and elsewhere, investors are increasingly turning to gold. Countries such as India, Turkey and Iran have seen bullion demand grow in the first quarter of 2019 ahead of the initial Brexit deadline in March.


Which gold is better for investment?

1. Gold with low wages and no wages

– Low-paid gold is actually the simple and delicate gold that is considered one of the best-selling types of gold. Some people confuse low-paid gold with no-paid (second-hand) gold because they do not know the differences between these two types of gold.
– Second-hand gold (used gold) is gold that was previously bought and later sold to a gold dealer. Those who buy this gold model again do not need to pay wages. This type of gold is not taxed because its tax is usually calculated on the same wage. However, the head of the Gold Dealers Union recently announced that sellers can eventually charge seven percent of the tax from buyers.
(The method of calculating the gold wage is in two ways: Riyal and percentage. In the percentage calculation of the gold wage, the selling price of raw gold is considered as a wage, but some gold sellers calculate their wages as a fixed amount in Riyal. When buying gold, be sure to Gold seller, ask how to calculate the wage and its amount)

2. Melted gold
A gold bar is a piece of gold with a specific weight and grade that is traded in the gold market. Most people buy gold bars for the purpose of investment and savings. Is gold bullion a free gold? Gold bars are sold from 0.3 grams to one kilogram. Of course, in our country, 12 kg bullion is also sold in the market under the supervision of the central bank. According to the law approved by the Islamic Council, gold bullion is considered one of the goods that are not taxed. Its price is based on its weight. In fact, you will not pay a fee for buying and selling gold bars, but what is known as free gold is not gold bars.

3. Persian coins
Gold coins have had many fans in the past and have been bought both as gifts and to preserve capital. But today, due to the increase in the price of coins and the decrease in purchasing power, Bahar Azadi coins have found an alternative. Currently, Persian coins and free gold are the choice of the majority of people for investment.


Conclusion :
Advantages of investing in gold:

-High liquidity:

All kinds of gifts are easily converted into cash. While in parallel markets such as housing, stocks, cars, etc., it takes time to find a buyer for sale. You can also sell as much of your gold as you need and keep the surplus. In the case of other capitals such as property and cars, this is not possible and must be sold at once.

– The price of each ounce of gold is determined and announced globally:
Therefore, investment in the form of gold is more secure than other investment methods.

– You can invest in gold with very small amounts:
Like Persian coins

– The volatility of gold has always been upward and increasing in the long term.
-Gold is free of maintenance and repair costs.

-Gold provides you with many different methods for investment :
Small savings from 100 thousand tomans to large funds can be invested in the gold market. There are also different ways of buying coins, buying melted gold or all kinds of gold ornaments.


Disadvantages of investing in gold:

-Investing in gold, in the short term, faces the possibility of asset reduction.
-There is a risk of gold being lost and stolen.

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