With worried adverts and an overall feeling that we are reaching the end of the world, the new wave of announcements of national lockdowns sounds like a death knell among the European population. Far from causing delight, however, this situation can be positive and potentially pay off big, at least, avoid losing you too much.
Between the unprecedented rise of Bitcoin (BTC) over the past few weeks and the surges in gold, the two best safe havens haven’t slipped under the radar, and some would say that a crisis makes good business for these assets.
With the Covid-19 crisis in full swing and the recession beginning to take its toll on households, gold has never been more popular among investors.
In this context, how can you make lockdown 2.0 a golden opportunity? We explain everything in this article, which should make you smile again, at least for a month.
Warning: This article is presented to you by Vera One. Crypto investments are risky by nature, do your own research and invest only within your financial capacity. This article does not constitute an incentive for investment.
You can’t start an article like this without pointing out, as we already described in our article about how to invest in gold, that gold has fascinated humans for millennia – and that is not about to change. Born about 5000 years ago from the discovery of deposits in Egypt and still traded in many markets, gold has managed to keep its beauty and remains synonymous with confidence and solidity in the eyes of all… even more so in times of high uncertainty and a decline in confidence in financial markets.
To further the reflection, we can even say that gold has become over the centuries the foundation of the monetary system: until 1971 (and to use a famous film quote) it was in a way “no gold, no ticket”. By becoming this indispensable guarantee for the creation of money, gold has forged its reputation as a safe haven.
Old gold coins, now defunct
Let us remember a few historical stories that confirm the idea that periods of crisis are always conducive to investments in gold:
· First, look back at the two oil shocks of 1973 and 1980: astonished analysts saw the price of an ounce of gold explode from $37 in the early 1970s to $200 in the aftermath of the shock in 1974. And just after the shock of 1980, the ounce of gold took a 2000% to rise to more than 850 dollars at its maximum.
· Closer to home, the 2009 crisis caused a major panic worldwide, especially among the French, who bought gold in bars, holding more than 6.1 tonnes of gold in the form of bullion and coins in 2011.
I don’t know about you, but from analysts at the time, I get the impression that history repeats itself, even if the reasons change. This new and ongoing global turbulence that is shaking the financial markets could well explode the price of gold, and therefore the demand for it. In any case, this is the course that the price of gold has been plotting for months, having broken records this summer by reaching more than 2000 dollars per ounce of gold on 13 August 2020. Don’t worry if you see the ounce of gold drop slightly on day one of lockdown, the finest analysts tell us that the unprecedented rise in its price over the past year should continue its momentum once the shock of the announcement has passed.
Gold prices in dollars since 2004 – source AuCoffre
While the rise in the price of gold is directly related to the health pandemic and the resulting financial crisis, it also stems from the macro turbulence at the moment: negative interest rates, higher unemployment driven by the slowdown or closure of many businesses, geopolitical tensions and more recently the US elections. A survey conducted by OpinionWay in 2019 for AuCoffre.com reveals that 73% of French savers believe that the yellow metal represents a useful savings solution to protect their savings.
“In the midst of winter, I found there was, within me, an invincible summer.”
There is no better time than the global lockdown and surrounding turmoil to acquire your precious gold and shelter from future headwinds of any kind.
Before we go into the details of your golden lockdown: let’s quickly look back at how the price of gold is set. Every day, the London Bullion Market Association (LBMA) gives an official quote in dollars and euros, the same for the whole world, based on one ounce of gold (31.10 grammes). Since it is a safe haven, its price will tend to rise or fall depending on specific events, ranging from cultural festivals to economic or political crises.
But beware, as a good, seasoned investor, pay attention to fluctuations in the price of gold, which also vary according to the activity of the jewellery, mining and finance sectors, as well as changes in monetary policy.
It must be said that the previous lockdown confirmed the trend, since a large number of investors chose gold as a safe haven for their savings. As you will have understood, lockdown is not all bad. And beyond this exceptional situation, it is also the dovish monetary policies of the central banks in recent months that intensifies the use of gold. After accumulating the bulk of their dollar reserves, they too turn to the precious metal to diversify their wealth with this equally universal and unavoidable asset.
Take a closer look:
World reserve held in gold
What if we are seeing the real gold rush now?
Now that you know that your next activity during the four weeks of lockdown will be to cash in, you’re probably wondering which gold to turn to? How do I buy gold? From whom?
We already have an article on how to invest in gold in 2020 and you are advised to take a look at it if you haven’t already. From now on remains the great debate of the security of the old and risk of the modern.
As we know, last March, lockdown restrictions had a significant impact on gold production, due to the decline in mining activity and the closure of non-essential businesses that no longer allowed some of the market’s wholesalers to sell the precious yellow metal.
So, in the fight between physical gold and paper gold who will be the big winner in 2020?
On the one hand, paper gold, a stock market asset with a short-term return allowed the purchase and resale of gold on the stock markets.
On the other, there is nothing more palpable than physical gold: beautiful ingots and gold coins, including the famous ‘Napoleon’ to measure the precious metal. Here we are talking about precautionary savings.
In the case of physical gold, the question of storage arises: at home under a tile, in a safe in the bank, by companies specialised in guarding it, there are many options. We will not return to the fabulous story from the last lockdown of two children who discovered two gold bars under their granny’s bed that went on to sell at auction afterwards. So, a word of advice, check well before you leave the premises!
So, to the question of what to choose between: physical gold or paper gold, it all depends on your initial goal, between speculating or securing a store of value.
In all, once we have said that, the real question is how to get gold in 2020 in this hostile environment, that is, in lockdown. There are several choices available to you, such as buying online or calling precious metals specialists directly.
On the cutting edge of trends, we preferred to look at innovations that have already been around for a little while such as the Veracash payment solution, a precursor in this field that has already thought of digitising and dematerialising the purchase of gold with a card. We told you about it in the first article of the alternative investments column.
Indeed, as an avant-garde visionary, Jean-François Faure thought of everything: to allow you to invest easily in physical gold and simultaneously allow you to associate this precious reserve with a bankcard, all to enable your daily payments, smart!
And it’s not for nothing that the latest addition to the Aucoffre.com family has continued to explore the endless possibilities of gold by exclusively offering you THE anti-covid solution to invest in gold, while being a visionary in crypto-assets.
I give you: VeraOne.
For the most assiduous readers among us, you already know VeraOne.
If I say Gold, you say? VeraOne!
Indeed, with the superb idea of marrying the oldest safe haven in the world and active crypto tech, arguably the future of our era, VeraOne is the best idea of the last decade.
You’ll soon realise that lockdown and gold have never been so close, thanks to VeraOne. Let’s take a little look:
· VeraOne is a token entirely backed by physical gold held in a safe, so no risk of suffering market fluctuations
· Investing in this token means both investing in a safe haven and benefiting from the intrinsic protection of a stablecoin, but also making sure the ownership of your gold is unfalsifiable
· VeraOne’s mission is also to enable the advent of a new exchange currency through crypto, even in non-banked countries.
· In short, VeraOne in 2020 means buying gold through a token, in a secure, unfalsifiable way, to build up wealth and/or exchange money all without physical contact and in a dematerialised way, so what does the government have to say? All this, without the need for a permission to leave the house, and having our trips limited to one hour within a one-kilometre perimeter. Gold is infinite and it will remain so.
Now you are ready to start the lockdown in a more serene mental state, ready to look at the price of gold and the potential of the famous yellow metal in times of crisis. Don’t hesitate to take a look at the alternative investment column, where you will learn how to invest in gold, the genesis story of the oldest safe haven, its comparison with Bitcoin, and much more… stay tuned! And above all #stayathome.
The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.
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