How to invest in Gold online?
Do you want to start investing in Gold online without hassle?
With Deriv, a popular online Forex and CFD broker, you can start investing Gold, Silver and various other financial markets easily.
Just follow the steps below to start investing in Gold and Silver today.
- Go to Deriv’s Official Website;
- Go to the account opening page;
- Complete the registration and receive login credentials;
- Log in to Deriv’s client portal (trading platform) and make a deposit;
- Go to the platform and start investing in Gold (Buy or Sell orders).
With Deriv, you can trade Forex currency pairs, Commodities, Stocks, Stock Indices and various other financial instruments along with Gold and Silver.
Go to Deriv’s Official Website and find out more about their trading service.
In this article, we will get into more details about Gold, and how it has become a safe haven asset today.
The value of gold skyrocketed as an asset
The biggest cause of concern is the soaring price of gold! After entering the 21st century, the price of gold has climbed all the way.
Throughout the ages, gold jewelry has always been a symbol of wealth, and gold has also been used as currency.
After entering the era of paper money, gold once retreated to a supporting role, but now it has returned to the world with its unparalleled sense of existence.
Speaking of where does money exist? Banks first come to your mind, right? However, bank interest rates are relatively low, and it is still difficult to increase value through bank deposits.
What about stocks? Although higher than the bank interest rate, there is also a risk of depreciation. Judging from the data of the past 20 years, there have been periods of high rises and periods of lows.
In sharp contrast with the above background, the price of gold has risen sharply after entering the 21st century.
On the basis of RMB, the price of gold in 2000 was 80 RMB/gram, and in 2019 it rose to 350 RMB/gram, which was more than four times higher.
You may think that it is such a loop mechanism: the price of gold soars → attention is doubled → purchases are swarming → burst buying leads to skyrocketing? It is true, but not only this, there are other factors.
It is also intriguing that the price of gold has soared, but the Japanese rarely buy it.
The main sources of gold purchases are Europe, Asia, China, and India.
So according to the recent market situation, let’s analyze the hot mystery of gold!
Mistrust in currencies causes funds to flood into gold
The implementation of the single currency euro in Europe can be described as a major historical experiment.
It is an attempt to integrate Europe, and the use of the same currency in several countries is also an economic exploration in itself.
In the autumn of 2009, Greece, one of the member states of the Eurozone, was exposed to a huge fiscal deficit.
Due to deliberately under-reporting the true amount of the deficit, Greece’s credibility fell sharply and the Greek national debt was downgraded.
Subsequently, its national debt was scrambled to sell, and the price plummeted.
At the same time, many financial institutions in the Eurozone have also suffered a severe impact on their operations due to their large holdings of Greek government bonds.
The world is full of crisis for a while.
What will happen if financial institutions go bankrupt? Will it repeat the same mistakes that caused the global financial crisis after the collapse of Lehman Brothers Securities in the fall of 2008? The stock prices of countries around the world have fallen, and the euro has fallen sharply in the foreign exchange market.
Due to the use of the same currency, its impact will inevitably spread to other eurozone member states.
It just so happens that the implementation of the single currency euro makes it difficult for countries to adopt independent financial policies, and the member states of the euro zone have become indistinguishable from each other.
After all the setbacks, countries finally reached a financing rescue plan for rebuilding Greece’s finances, and the Greek government also stated that it would reduce the deficit as its primary goal.
But as of now, the crisis has not been resolved, and the life-hanging situation continues.
In addition to Greece, there are several Eurozone member states that are also in fiscal deficits.
Where is the economic trend of various countries in the future? What will happen to the fate of the euro? This distrust of currency has led to a steady flow of funds to gold.
After entering the 21st century, gold, which has been singing all the way, has continued to surge in value due to explosive purchases.
Unlike currency, gold is stateless.
Unlike printed banknotes, gold does exist as a “physical object”. From ancient times to the present, when people sense a crisis, people will focus on gold and buy a lot.
Perhaps it lacks romance, but as an asset to keep its value just in case, gold has attracted much attention.
Especially around 2010 and in recent years, people’s trust in the base currency, the US dollar, has declined.
The euro crisis has caused uneasiness on the European economy, and the stock prices of various countries have fallen.
Investors are extremely worried about existing financial products.
However, gold does not carry label risks such as “currency, bonds, stocks issued by a certain company in a certain country”, which speeds up the flow of funds to gold.
In addition, in order to cope with the economic crisis, governments and financial institutions of various countries have adopted financial relaxation policies, which actually dilute the value of financial assets and raise the value of gold as a “physical object”.
What is the nature of the value of gold?
What are the most important characteristics of gold? The author believes that it is the immutability it possesses.
Unlike other materials, gold has been immutable and eternal for thousands of years.
Because of its eternal sense of stability, it is processed into a currency to measure economic value, or it is treasured to preserve its value.
These characteristics further enhance the value of gold.
What is the value of gold? This question is difficult.
Although the author has been dealing with gold trading for nearly 30 years, gold is really a multi-faceted monster that cannot be explained in a word.
Immutability is its most important feature!
Since ancient times, people have realized the existence and value of gold.
Unlike other metals, gold exists on the earth in its original ecology like placer gold, and it can be mined and used even without special technology.
The melting point of gold is 1064 degrees, which can be melted by firewood.
It is soft and easy to process, especially popular.
During the ancient civilizations such as Egypt and Mesopotamia in the 3rd millennium BC, gold products of various shapes began to be produced, and they have survived to this day.
At least when the so-called “civilization” kicked off, gold has always been loved by people.
From what clues did our ancestors discover the value of gold? First of all, because it looks shiny, it is heavy to pick up, and the number is only a little! But in the final analysis, it must be attributed to the characteristics of gold that is not easy forever, stainless and corrosion-free, and eternally shining!
Golds preserves value with unchanging characteristics
“Unchanging” is actually a very rare trait. Gold does not react with all substances in nature.
Usually, metal will oxidize and rust and deteriorate, but gold will not oxidize and can always maintain its original shape.
Although it is only melted by aqua regia (a 3:1 mixture of concentrated hydrochloric acid and concentrated nitric acid), aqua regia hardly exists in nature.
Because of this characteristic, the gold products representing ancient civilizations thousands of years ago are still well preserved, and our descendants can see the beauty in the museum.
Everything is in constant change, which is common sense in the world.
The battle turns and the stars move, everything is heaven and earth, life and death are reincarnations.
Organic and inorganic, after all, it is the pure land.
In the passage of time for hundreds of thousands of years, metals will also corrode and deform and become totally unrecognizable.
Beyond the rule that everything will perish, only gold!
At first, people should not know the eternal characteristics of gold, maybe they just think that Huang Cancan is really beautiful.
But as the friendship deepened, people discovered the eternity of gold and realized its unique value-preserving effect.
Gold is processed into a currency that measures economic value.
In modern times, the “gold standard” has been implemented, that is, when countries issue currencies, they must be based on a corresponding amount of gold reserves.
As a means of preserving value, gold can be said to be the only one in the world, and this characteristic gives it greater value.
People’s recognition of gold has consolidated the value of gold.
It would be far-fetched to theoretically explain the value of gold today.
Although the cost of producing gold and the demand for gold in industrial applications can be calculated, it is not the above-mentioned visible factors that really determine the value of gold, but the thought of “gold worship” rooted in the heart of mankind and has been baptized over the years!
Human beings sincerely trust the value of gold.
Paper money, stocks, and bonds are nothing but a piece of paper, and the creditworthiness of the issuing country, enterprise, and local public organization determine their value.
And gold itself has value, and its credibility does not depend on anything else, which makes capital flock to gold whenever it falls into an economic crisis.
The reason why gold is called “the last resort” is simply because its intrinsic value is recognized by people.
For thousands of years, people’s trust has been accumulated, and after countless wars and disasters, gold has become indestructible.
The content of this section is taken from part of the “New Textbook of Gold Investment” written by Mr. Yuichi Ikemizu. We have adapted some of the content on the basis of the original work.