DIGITAL GOLD, AND IT RELEVANCE
Digital gold basically can be regarded as enhanced gold because both gold and digital gold possess the same value and they both use the same market trend since digital gold is backed up physical gold itself.
Note: In this article anywhere that Gold its been mention it can be taken as digital gold as it will be used interchangeably
Gold relevance cannot be overemphasis in this current world since it serves as a complement to stock, bond, and alternate asset that one can invest in to make a reasonable profit, this came into existence since gold outperformed other classes of asset that do get affected with rising and fall in the market performance.
GOLD STRATEGIC ROLE
Gold performance in the time past has been extra-ordinary due to the role is been used for as a wealth creator and a means of storing wealth to hedge against inherent and systemic risk, depreciation, and inflation of currencies. In short, gold has been a factor that aids ROI in an individual portfolio and also serves as a means to meet both short and long term liabilities.
GOLD VALUATION
In most cases, Gold valuation is innate i.e the force of demand and supply determine its price. Performance can be related to four basic and broad sets of drivers which are:
• Economic expansion: in has been observed that in the periods of boom people tend to venture in new jewelry, technology, and long-term savings investment thereby increase gold demand.
• Risk and uncertainty: in the time of market crisis demand for gold is always high
• Opportunity cost: the price of other financial asset or instrument like bond and stock influence the demand for gold
• Momentum: state of investment period weather the time of risk or off risk determine the increase and the decrease in the demand for gold.
Digital Gold
Digital gold can easily be called gold or a subunit of gold or E-Gold since the purchase of Digital gold by any investor is been regarded as an indirect purchase of physical gold, which is a means for digitalizing the financial market.
The digital gold is built on blockchain to enhance the activities of gold generally as regards, how its been purchase; and thereby evicting the vault keeping gold method to wallet keeping gold with ease, this encourage people to invest in his module of operation.
Investing in digital gold is not as tedious as investing in physical gold as long term process is not required for it purchase, the purchase of gold token is as the purchase of gold.
The cost of purchase of digital gold is pocket friendly, as the cost of transacting is the same as Ethereum Gas fee for normal transaction that is ethereum based.
Digital gold liquidity cannot be overemphasized as an independent live audit can be done, at any point in time to check the velocity and rate of what is in the circulation.
Digital gold relevance can be trace to different investment unit in one way or the other, but the basic one is
• Generating long-term and short returns for investors
• Digital gold is a means of enhancing and diversifying investment portfolio in other to mitigate loss.
• Digital gold Provide liquidity without given investors credit risk
• Digital gold improve overall portfolio performance of an investor
Conclusion
Gold is one of the most precious metal stones and its digitalization is bound to increase the general appeal of the precious metals in the world, which has been an issued faced by mankind in past years. In short Digital gold is a revolution in the world of financial markets and its relevance in the present world cannot be quantified.
Reference:
https://www.gold.org/goldhub/research/relevance-of-gold-as-a-strategic-asset-2020-individual
https://gold.storage
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