The characteristics of gold and how to invest in it

Gold lost about 30 per cent of its value in 2013, raising doubts about the quality of investment in gold and the importance of escaping currency to tangible assets as a result of the erosion of the real value of currencies as they continue to be printed by central banks around the world. Is gold, in general, suitable for investment? Is gold still suitable for investment? What are the ways to invest in gold?

With a brief historical review, gold has grown by about 300 per cent in the past 15 years, while stocks (represented by the Dow Jones Index) have reached about 80 per cent over the same period, although gold has lost 30 per cent of its value this year, At the same time, the Dow Jones rose by about 23 per cent. That is, except for 2013, gold has grown by over 450 per cent in 15 years, while Dow Jones has grown by 42 per cent over the same period, plus annual dividends of 1-3 per cent.

There is no doubt that one of the most important reasons for the rise in the price of gold in the past years is due to the great appetite to be acquired by investors and some central banks who believe that the dollar is in a state of deterioration will continue for many years, and that there is no room to save wealth only through tangible assets, . Despite the negative performance of gold this year, there are many who adhere to the idea of ??investing in gold and does not deviate from it, whether it has risen or fallen. 

What is the reason for the attraction of gold?
The idea of ??investing in gold is based on two hypotheses. First, the purchasing power of paper currencies is constantly eroded. Second, the supply of gold is limited, so the price of gold is always at the mercy of demand, which is expected to last for decades. As for the limited quantities of gold, it is known, as the total of the extracted from gold over the life of mankind estimated at less than six billion ounces, or about 170 thousand tons, and produces annually in the world about 2500 tons, and more than half of the production was during the 100 years past.

This means that the amount of gold in the world is increasing annually by about 1.5 per cent, which makes gold fundamentally different from many other goods that do not have the factor of accumulation, that is, those goods that are extracted and remain on the face of the earth, unlike many other goods as depleted as oil Which is extracted and consumed irreversibly. But since the amount of gold extracted on the surface of the earth is increasing - that is, the quantity is increasing - under the law of supply and demand is supposed to increase the supply lead to lower prices, the gold price is supposed to fall! The imbalance in this analysis is that demand is growing more than supply, and this is true even in years when demand is relatively modest, due to the weak growth rate of annual gold, which we have seen does not exceed 1.5 per cent.

Gold Trading
How can a person invest in gold? There are several ways, one of which is the purchase of products made of gold such as jewelry and ornaments, which can be used as a decoration for women and as an investment at the same time, but there are a number of reservations about this method. First, we have to know that the quality of gold is measured in carats, and the highest quality is pure gold, which was given a measure of 24 carats, since the gold ratio exceeds 99 per cent and up to 100 per cent.

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Important secrets about the gold trade

After the first six months of 2018, the luster of gold did not fade. On the contrary, the yellow metal rose, not all as expected, did not win the strong Trump dollar. Gold was the biggest beneficiary of the US interest rate hike. Which is a coup in the economic base fixed in the minds of almost all economists, has changed this rule? Or does gold no longer care about the dollar? Or what happens?

In the beginning, gold is the most important and most valuable precious metal, and the acquisition of gold is a constant desire of individuals and countries - central banks - and is the most important part of the reserves of countries, because of the material value and moral enjoyed by the yellow metal, American interest, and political events in the world.

The relationship between gold and the dollar is inverse. The demand for one increases when the price of the other rises. This relationship is that gold is one of the most important hedge instruments against the risk of change in the exchange rate. Investors use it to cover the risk of weakening the dollar. Safe haven or security haven for investors, and gold speculation is always linked to the economic risks in the world which are the main factor in the demand for gold at the moment.

By the end of last year, all expectations were in the interest of the dollar. The worst for the financial markets, according to analysts, ended in 2016, as the year passed with major events, which helped the collapse of economic indicators and the recovery of gold, we saw Britain's sudden exit from the European Union, Voting on the Italian constitution, the victory of Donald Trump, raising American interest, Turkey's military coup, continuing tensions in the Middle East, terrorist attacks in Europe, and so on. 

Apart from the narrative, all these factors were a major reason that gold ended the year 2016 with its first annual gain since 2012, although the yellow metal fell sharply following the victory of Donald Trump in the US presidential election in November. It fell 12% in the fourth quarter, but a strong start to gold in 2016 helped to end the yellow metal last year up 8.5%.

Dollar
We mentioned that there is a close correlation between gold and the greenback, as the dollar's appreciation increases the cost of gold to other currency holders, while the increase in interest rates leads to higher bond yields, which limits the demand for non-yielding gold and increases US interest twice within 3 months , All expectations were in the interest of the dollar, which did not happen, as the green currency continued to fluctuate during the first quarter of this year.

The Federal Reserve's New York Federal Reserve Chairman William Dudley said the central bank was not rushing to tighten monetary policy. James Bullard, the Federal Reserve chairman, "I do not think we need a major adjustment of monetary policy at this point in order to stay on track and keep inflation near the target," he said.

Another reason for the volatility of the US currency is the expectation that Federal Reserve Chairman Janet Yellin will pursue a sharp austerity policy towards the interest rate by increasing the rate at a higher rate, which did not happen at the last interest rate hike. The dollar is reviving, but markets are not reacting enthusiastically if events are below market expectations.

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Advantages of gold trading

Gold is the most important and most precious metals prevalent, and the acquisition of gold is a permanent desire of individuals and countries - represented by central banks - and it is the most important part of the reserves in countries, and given the physical and moral value of the yellow metal is quickly hidden by the central banks in the event of economic risk Or political, and this is precisely what central banks are doing around the world in recent times, central banks are still the biggest net buyers of gold in the world.

A report released by the World Gold Council last year showed global demand for gold increased by 70 percent year-on-year in 2016, its highest level in four years. Demand for investment in the precious metal jumped to 1,561.1 metric tons In 2016 from 918.7 metric tons in 2015.

For example, in 2017, Russia increased its gold reserves by 223 tonnes, up 17.7 percent. Since June 2015, it has added 558 tonnes to its international reserves, This rate is standard. The Russian Central Bank recently said: "The total value of the precious metal reached 1838,211 tons by the end of December."

On the other hand, Turkey was one of the most gold buyers during the past year. The Reserve Bank of Turkey's gold reserves reached a record 564.8 tons. The value of gold held by the bank rose from $ 14.1 billion to $ 23.5 billion In 2017. This data shows the large trend towards buying gold at the level of central banks, indicating that the price trend to rise in the coming months amid increasing demand.

Global Fear: Fear Boosts Gold Fortunes
Gold is the old safe haven. The yellow metal occupies a great place in the world economy. It is the best criterion for determining the wealth of individuals and peoples. It was the main reason for many wars, and the use of gold is always associated with fear. For example, Britain for the exit from the European Union, as a result of fear of the negative effects of this withdrawal.

In the face of political and social crises such as wars and others, the immediate recourse to gold, so always escalates when there are any tensions of global policy, and with the decline of confidence of peoples and investors in the stability of the situation burning global, fear is increasing and with it all resort to gold, and the problem of this fear in time We are witnessing a new vote for the exit of other countries from the European Union, and the new American policy continues to raise the concerns of many, not to mention the constant ignition of the situation in the a Middle Eastern.

More recently, the Global Threat Report highlighted a number of major threats in 2018, including environmental risks from weather, unusual temperatures, economic disparities and cyber attacks, as well as growing political concerns that make the world closer to nuclear conflict than ever before in decades.

The report, which involved about 1,000 experts from governments, companies, academics and NGOs, predicted 93% of them to exacerbate political or economic confrontation between major powers in 2018, and about 79% likely military conflict between two states.

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What are the best ways to invest in gold?

In general, many market participants believe that the dollar has to decline one day and may even collapse, but when? No one knows, but everyone knows that gold is the root of the fundamental hedge against the depreciation of the dollar, so when investors believe that the value of the dollar tends to decline; gold is always the solution.

The dollar's rise, despite expectations of interest rate hikes, is further reinforced by the US administration's desire to keep the dollar at current levels. US Treasury Secretary Stephen Menochin said recently that "the dollar's decline has benefited the trade balance" Of the currency in the first place »explaining that the weakness of the dollar is not a concern for him, which reveals the strategy of the current US administration, which works to address the deficit trade balance in the first place, which will ultimately be in the interest of gold prices.

Stocks: Heavy volatility in money markets strengthens gold position
Although some believe that there is no fixed correlation between gold and equity prices, high volatility in equities and lower investment returns in most sectors in light of the dollar's decline are considered by many analysts to be the main drivers of gold's rise. Will be limited amid these fluctuations, so gold will be a safe haven for many investors who do not want to risk.

On February 2, the three main indices of US stocks fell, with the Dow Jones Industrial Average losing the biggest percentage loss since June 2016, shedding 2.54%, while the broader S & P 500 The Nasdaq Composite Index fell 1.96%. The week ended Feb. 2, the worst week for Dow Jones and S & P since January 2016, and the worst week for Nasdaq since February 2016.

Europe's biggest weekly loss in more than a year in the week ending February 2, as risk appetite eased amid losses across sectors. The Stoxx 600 index fell 13 During the week, its worst weekly loss since November 2016.

These sharp fluctuations in the stock markets reversed their recovery last year. The indices recorded the largest rise in their history in 2017, by about 22% on average, while Wall Street, the world's largest stock market, recorded a growth rate of 27%, indicating that the year The current will not be as its predecessor, which makes gold the best option, which will increase the demand for it.

"The current conditions in the financial markets are reminiscent of what they were in 2006, before the financial crisis," Barclays Bank chief executive Jess Staley said. "The nominal value of assets is currently very high, In the event of any risk, we will see a heavy sell-off of investors to avoid losses, which of course means a significant drop in stocks, that is, the risk ratio in the stock market is large, which strengthens the status of gold as a safe haven.

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The reasons gold makes the best investment for you in 2018

After the first month of this year, the yellow metal has increased brilliantly, after achieving its biggest annual increase since 2010 in the past year. Gold prices rose in January for the third month in a row and increased 3.1% since the beginning of the month, The best monthly performance since August, after a strong end of 2017; gold gained 13%, indicating a strong rebound in gold. Will this rally continue in 2018? Can gold be considered the best investment in the coming months?

Analysts say the service " F. Mother. The gold price could exceed $ 1,500 an ounce this year for the first time since its collapse in 2013, as it will enhance its appeal as a safe haven of risk, both economic and political, said Sida Letoch, analyst at the service. "The geopolitical climate and equity markets, which face growing risks of sharp correction, will be major engines for gold to rise."

Leitouch believes that global markets will increase volatility due to the ambiguity surrounding Trump's policies, Britain's exit from the EU and tensions in Europe, as well as accelerating demand for gold from private investors from Asia in particular. Indian demand, for example, rose by about a third last year To 611.2 tons.

These data indicate that gold will continue to rise, and in the next few lines we will discuss the reasons that will promote the rise of gold, making it perhaps the best investment option this year. 

1 - Dollar .. Gold more beneficiaries of the weakness of the US currency
The exchange rate of the US dollar is one of the most important determinants of the global gold price, since there is an inverse relationship between the value of the dollar and gold, meaning that the increase in the price of gold is often a reflection of the depreciation of the dollar and vice versa. Against the risk of changes in the exchange rate of currencies in general, as investors and traders in the exchange market to buy gold to cover the risks resulting from fluctuations in currency rates.

The gold price hit its biggest annual gain since 2010, after a sharp drop in the value of the US dollar, which recorded its biggest annual decline since 2003 last year, on doubts about the continued recovery of US economic growth, ending the year at a loss of 9.5%. The US currency fell against the euro, the Japanese yen, the pound sterling, the Canadian dollar, the Swedish krona and the Swiss franc, and these currencies are the components of the dollar index.

While data from the International Monetary Fund showed that the US dollar's share of global foreign exchange reserves fell in the third quarter of 2017 to its lowest level since mid-2014, the third consecutive quarterly decline in the US dollar's share of global reserves, Weak US currency.

With the end of 2017, it is not expected that the dollar will offset some losses last year in 2018, which is in the interest of gold prices. According to Steven Ines, director of trading control for the Asia Pacific Pacific currency company, "Oanda" Strong for gold, this year.

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Secrets of gold trading and gold investment?

Gold is always gold and gold, and gold is a very lucrative trade. There are gold bullion, gold coins and so on, despite the crises. Which has affected the world in successive times and affected all things, but gold alone is the thing that was not affected and of course was not affected by those who put their wealth to invest in it, and because the demand at all times and places and because the trade has always won some investors, especially those who We have been affected by many changes in the world of investment and trade to the orientation of their investments in whole or in part to trade in gold because it is a guaranteed trade, so we are keen to share with you all the new and useful in the world of investment and trade and if you are interested in knowing some things about gold and how to trade Let me tell you in this article about all the secrets of gold trade and how to profit from it.

Gold Trading Project
Because gold is the element that is constantly increasing its value and is not affected by the economic crises that affect other elements and other things and its value increases over time, but other elements value their value compared to gold, so the idea of ??trade in gold is a very successful and profitable idea but it needs those who understand well and towards you to trade In gold:
- Ensures great profits
- Stay away from many areas that may be hurt and occur to you a lot of losses
- Helps to promote the gold market
- Helps to revive and promote the local economy of your country
In order to implement the gold trade project you need to know a lot of different things.

Types of Gold Trading
The gold trade is not limited to the sale of gold jewelry. The gold trade is based on the sale and purchase of gold jewelry. There are several different types of gold trade,
Crude Gold Trading (Gold Bullion):
Gold bullion weighs in ounces and is traded in banks and weighs up to 400 ounces and those bought by major investors. You can buy gold bullion from the specialized banks or from the big gold shops and you can deal with them in the gold bourse. You can also rely on a gold speculator. The alloy shall be one piece to ensure the highest rate of profit.

Gold Trading:
Gold coins have a lot of shapes. They are made of pure gold and are mixed with copper, which are easy to form and draw different graphics. The gold coins trade is very popular among currency lovers and collectors, but it is not very recommended for those interested in trading gold. You decide to trade in them, you can get them in more than one way, including the companies and sites through which currencies are traded, buying them from people you trust, or large gold shops.

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