Gold prices have climbed to their highest levels in nearly nine years, with the precious metal seen as the investment of choice for investors dealing with pandemic-related uncertainty in the stock market.
Despite hitting its highest levels, there are still profits to be made from investing in gold in the second half of 2020, according to leading analysts at Goldman Sachs, Citi Bank and JP Morgan.
With interest rates at record lows and central banks supporting their economies, analysts predict the gold price will continue to be driven up by strong demand and continued uncertainty over the outlook of the global economy.
Sean Sanders CFA Charterholder and CEO of investment platform Revix, commented: “The yellow metal has never crossed the $2 000 per ounce threshold; however, the unprecedented money printing and lending actions of central banks, weak global growth, and higher inflation could all influence the metal to climb higher.
He continued: “It is also why it’s important now, more than ever, to hold inflationary hedges like gold in your investment portfolio. The fundamental long-term inflationary pressures that are stimulating the appetite for gold remain firmly in place. In particular, South Africans are seeing their hard-earned rand savings go up in smoke and are continuing looking to investments like gold that strengthen when the rand weakens due to inflation.”
After charging to price levels not seen in nine years, analysts at Citi Bank are still expecting gold’s price to break above $2 000 in 2021 and Goldman Sachs’ projections are similar, betting the precious metal will reach $2 000 an ounce even sooner. Making gold an appealing investment choice if you are planning to hedge your bets against the rand.
Why gold?
Gold is scarce, and less than 2% of gold’s total value is extracted from the earth every year. So, when more paper money is printed relative to how much gold is mined, each ounce of gold becomes more valuable in rand terms. Gold tends to benefit from widespread stimulus measures from central banks because it is widely viewed as a hedge against inflation and currency debasement.
Revix, the investment platform backed by JSE-listed Sabvest, offers a simple and low-cost way to invest in gold. Revix has no monthly account fees, no sign-up fees and a low once-off minimum investment amount of R500, making it easy to get started.
Through Paxos Gold - a regulated tokenised commodity - you can invest in physical gold held in fully insured LBMA London vaults and not have to worry about the custody and insurance burdens of physical ownership. One PAX Gold token is backed by one fine troy ounce of the highest quality LBMA gold and what separates Revix from competitors is that you can sell your gold investment whenever you choose - whether that’s in a couple of hours or many years’ time.