On the financial markets, many materials can be traded, including gold. Gold is a very old commodity, and is still a safe haven that is in great demand by investors. In order to make your investment in this commodity as attractive as possible, it is important to know and follow the gold price trend as closely as possible.
In order to help professionals in monitoring the price of gold and their commodity management, DeftHedge has developed a SaaS solution offering access to a wide range of information and management advice. Thanks to our software, you will be able to protect yourself against possible risks linked to the evolution of the gold price. In order to identify the right times to buy and sell gold, trust DeftHedge.
What are the advantages and disadvantages of investing in gold ?
The main disadvantage of investing in gold is that it does not offer a return. Unlike the dividends that can come from shares or rents from a property investment, gold investments do not offer financial gains.
In return for this disadvantage, gold appears to be a suitable value to secure your savings. The reliability of this value is an important factor in protecting part of your savings.
Because of its characteristics, gold is a good diversification tool that should be the basis of a portfolio. Little subject to fluctuations in value, the price of gold makes it easy to guarantee part of your savings. Among commodities, gold is today the least volatile value.
Despite its lower return, gold is therefore a value not to be neglected in an investment strategy. Indeed, the security of this value makes it possible to compensate for the possible risks linked to shares and bonds: economic crisis, default of the issuer, bankruptcy…
The “safe-haven” aspect of gold is therefore a particularly important advantage in investments.
How to invest well in gold ?
In your commodity management, it is estimated that the share of investment in gold should represent between 5 and 10% of the total amount of your investments. Although the price of gold can fluctuate, it remains one of the safest stocks on the commodities market.
To invest well in gold, it is therefore important to identify the most favourable times to invest. You should be aware that this investment can be made in different forms: physical or paper.
This type of gold corresponds to a weight of gold that can be presented in different forms: bars, ingots, coins… From a few grams to several kilos, physical gold allows you to see directly the investment in the raw material.
The purchase of gold can also be carried out in paper format which corresponds to a financial product (ETF or listed index fund). The value of this financial product is fixed in relation to the gold price. Opting for this type of investment in gold corresponds mainly to a short-term speculative strategy.
Where to buy gold?
Gold bullion can be purchased from a bank branch. Investments in gold can be made on specific financial markets, in particular the COMEX (New York Commodity Exchange). Specialising in precious metals, gold and silver, this American exchange is the world’s largest forward exchange for gold transactions.
Why does gold go up or down?
Although gold is a safe haven, it is not immune to price rises and falls. There are a number of factors that can have a direct impact on the price of gold:
- Massive ETF sales
- Condition and purity of gold bullion
- Supply and demand
- Premium on physical gold
Paper gold has a very important weight today on the level of the value of gold and its evolution. In order to identify the most opportune moments to make an investment in this raw material, it is therefore necessary to be aware of all the indicators and the economic situation.
A constant interest in gold
Because of its appearance as a safe haven, gold is always a very privileged investment among the various raw materials.
For companies, this investment strategy in this raw material appears as a particularly interesting element to secure part of their savings.
Less subject to a significant fluctuation in its value, this raw material makes it possible to offset the risks associated with transactions in other commodities.
Easy to access, gold on paper is therefore a judicious choice in your trading strategy on the international markets. Because of its “liquid” aspect, because it is easy to resell, this material allows you to have funds available quickly in case of business needs.
In order for this investment to be as optimal as possible, it is important to determine the best time to make this investment.