INVESTMENT GOLD is purchased by both individuals and companies seeking to protect their capital. It is at the center of interest for those who want to manage and minimize currency risk.
Recently, the world has experienced two major global events — COVID-19 and the Russo-Ukrainian War — both of which triggered strong global inflation. Countries worldwide faced a common economic challenge that rapidly eroded the standard of living for both individuals and businesses. Money across the globe began losing value. There is virtually no currency that remained fully resistant to the effects of high inflation.
Taking these factors into account, many businesses began searching for ways to protect their accumulated capital, particularly retained earnings. Given the strong long-term growth of gold, investing in gold has emerged as an optimal solution.
Investment gold is considered a cash equivalent, meaning it can be liquidated at any time.
The value of gold has increased by an impressive 160% over the past five years.>
Cash equivalents are highly liquid assets that can be immediately converted into cash and used for payments. The most common examples of cash equivalents are marketable securities that can be quickly liquidated, as well as precious metals.
In addition to companies, individuals have also recognized the impact of rising inflation. As a result, the global trend of capital protection has reached our market as well. At the center of this interest is investment gold, particularly among the following types of investors:
- Individuals who invest in gold often allocate funds from dividends (profits) or income from self-employment into investment gold.
Gold purchased in this way remains in the ownership and physical possession of the buyer. - Individuals with savings in various currencies convert part of their funds into gold to protect their value.
- Individuals with fixed-term bank deposits that generate little or no return often redirect their capital into gold
- Individuals who benefit from high real estate values may sell property and invest the proceeds in gold.
- Individuals who do not yet have sufficient funds to purchase real estate use gold as a way to preserve accumulated capital until they reach their financial goal.
- Individuals who already own multiple properties often use gold to protect surplus capital from inflation. In many cases, these are among the largest investors.
- People who have sold business ownership stakes and chosen a more stable lifestyle frequently allocate significant portions of their capital into gold. This group ranks among the top investors in terms of investment size.
Across all these categories, the goal remains the same — PROTECTING MONEY FROM INFLATION.
FOR CENTURIES , GOLD WAS THE SAFEST DESTINATION IN DIFFICULT SITUATIONS
For thousands of years, gold has proven to be an unparalleled instrument in the fight against inflation.
Corporate investors purchase gold using accumulated business capital. This typically refers to funds that are not required for day-to-day operations — capital held in company accounts and recorded in financial statements as retained earnings.
Gold purchased in this way remains in the ownership and physical possession of the legal entity.
The most secure way to store gold products is in bank safety deposit boxes. These are available to both individuals and companies. The cost of using such safes is relatively low, usually amounting to only a few thousand dinars per year.
The benefits of investing in gold can sometimes be realized immediately, but this should not be considered the rule. Gold investment is primarily a long-term strategy.
There is one key characteristic shared by all categories of investors, whether individuals or companies: the protection of capital earned through real work. The primary goal for all investors is the elimination of currency risk caused by natural, artificial, or other economic factors.
The profile of a gold investor is as follows:
An educated and economically wise person of middle and older age, who does not want to entrust their capital to adventurous investments and currency risks (inflation, currency changes, etc.).
By owning investment gold, greater economic freedom, independence, diversification of the asset portfolio, as well as hedging of capital in crisis situations are achieved.
