THE CONCEPT OF GOLD STABILITY

in #gold4 years ago (edited)

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Gold is often regarded as a safe haven, protecting your money against economic crisis and long term storage value. When fiat currencies and investment assets has failed, gold is always there to protect your portfolio.

The stable features of Gold is often seen as a pro by individuals with aims of protecting their assets while investors sees it has a con. In this article I'll be revealing to you why.

Gold was initially used as currency in the Medival age; a system of values based on weight of gold. Even in Modern age where paper currency was introduced it's value was still based on the backing of Gold. Although not anymore since the abandonment of the gold standard. Over this long period of time gold still remains valuable. Gold is often viewed as having negative correlation with stocks and a positive correlation with inflation, thus serving as execlent diversifying asset to hold in portfolios. This is as a result of its stable nature.

To explore this property of Gold, we need to make reference to the origin of such precious metal. We might need to go a little bit scientific for deeper understanding.
Gold is an extra terrestrial mineral cooked up in space It's presence on earth is due to a catalytic explosion of stars called Supernovae. Stars are made up of mainly hydrogen which compressed and triggers a nuclear fusion in the star's core. This process causes stars to shine.
This fusion turns hydrogen ino heavier elements such as helium, oxygen, till it's reaches the level of iron and nikel. At this point, nuclear fusion process fades out, causing the outer layer of The Star against it's core, which then bounces back with force causing the star to explode, causing a supernovae forming gold residues. This huge number of gold residues then fuses together as meteorites to reach the surface of the earth.

Gold is extremely rare. Through out history, man has minted 188,000 tonns gold. To put this into perspective, this amount of gold would fill only two olympic sized swimming pool. This rarity accounts majorly for it's increased value. The molecular make up of gold can be easily manipulated and also really pretty and shiny, as it's chemical symbol is Au is coined from that latin word Aurum meaning "Shining Dawn" hence, gold can be used in lots of aesthetics such as buildings, paintings, sculptures and more.

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STABILITY OF GOLD
Gold has a lot of amazing features such as durability, malleability, rareness etc which accounts for it's increased value, but a distinct feature which makes it being regarded as a safe haven is it's stability.
Through out history, this same gold stability feature has lead many critics to look upon it as a boring asset which they claim offers little income but they completely miss the place of gold in a portfolio because counter intuitively this boredom is one it it's greatest attractive quality.

If you think about set of circumstances that allows Gold to do well, it is usually catastrophic circumstances so I would agree with you that gold often brings boring return, boring returns like $35 in 1971 and than $1,725 today. If you think about other assets classes that offer up insurances, gold seems to be a boring asset I want.

Critics agree that gold provides boring results because they think of gold as an investment but gold basically shouldn't provide any return because there are little of no risk involved in it's acquisition. As the saying goes " no risk, no reward " thus, risks of catastrophic loss of value should also not involved. The price of Gold may relatively go up and down but gold itself is permanent.

Gold is an excellent asset in inflation and also not bad as well in times of deflation. It's is important to pay more importance to the purchasing power instead of price while dealing with Gold, because for gold to down 10%, sock must have gone down 70% which is still pretty good and inthe same vein the purchasing power is being increased.

Gold majorly hold it's stable value over a long period of time because of it very high stalk to flow ratio. The stock if Gold is far greater than the amount of new gold arriving in the market each year, making the value of Gold very stable. Thus, If the mines of gold completely creases for a couple of years, it would almost have no effect on the value of gold.

It is quite germain to note that if there's a only an small stock if a commodity compared to flow, its value will flunctuate enormously. This occurs in various fiat currencies and other investment but this is unlike gold.

The stable property of Gold is basically to save you when every other investment and asset fails you. Take for example, the current COVID-19 outbreak which has drowned the economy of several countries. Since the pandemic major counties exports has been hit, global supply chain destroyed, tourism crashed, retail shops lock down, oil price drastically fell, global stock declined, and crash in price of cryptocurrency. It is predicted that after the pandemic, major affected countries might run into economic recession. Imagine what this has done to crude oil. With the lock down has come a mighty decrease in the demand for crude oil and still being produced with no place to store them. The US price of oil due for delivery by May has fell drastically to about -$38, although recovered to $0, which is really not encouraging.

Therefore, providing you the easiest and most trust worthy way to buy Gold is the DIGITAL GOLD PLATFORM

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THE DIGITAL GOLD PLATFORM
The major aim of the Digital Gold project is to is to tokenize and digitize physical gold asset exploring the amazing features of the blockchain technology. Thus, allowing people to easily purchase physical gold with the digital Gold token.
The Digital Gold platform give clients the opportunity to diversify their portfolios in a safe state since cryptocurrency price is volatile in the market.

  • THE DIGITAL GOLD TOKEN is based on Ethereum network and is compatible with the most popular cryptocurrency wallets that support Ethereum ERC20 standard tokens

The Digital Gold coin offers an even more comprehensive solution. This token not only provides all the advantages of stablecoins, but also earns you an additional profit, since it constantly grows in value relative to all fiat-pegged stablecoins. This happens since the GOLD token is pegged to gold, and the price of gold relative to fiat currencies continuously increases.

MARKET PLACE FOR DIGITAL GOLD COIN
The Digital Gold Platform creates this marketplace for an easy, effective and efficient purchase of Gold with the Digital Gold token
Here is the link to the Digital Gold marketplace: https://gold.storage/market

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CONCLUSION
Investment in gold is primarily for its unique characteristic i.e a store of value. Nations may rise and fall, currencies come and go, equity stocks prices climb in good times only to plunge later. But gold endures
Why not save your assets not but buying your gold via the digital gold platform.

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