After years of disappointing price action, gold suddenly burst into life last week on news of the Russian invasion of Ukraine.
It came close to breaking its all-time high above $2,000 per ounce (oz), but retreated to $1,900 per ounce over the weekend as the fears and uncertainties that propelled gold seemed to wane. fade.
Bitcoin, often touted as a form of digital gold, has lost ground to gold, as seen in the chart below.
bitcoin versus gold
“While Bitcoin is believed by many to be digital gold, the long-term correlations between these two assets remain low,” says Brett Hope Robertson, chief investment officer at crypto platform Revix.
“Bitcoin has traditionally behaved more like a tech stock, but with an inflation hedging aspect due to its tight supply cap. As we start to see more and more people looking to disconnect from currencies government-backed trustees, I think we could see Bitcoin go from a risky asset to becoming the risky asset of the digital age.
What is the best safe haven asset?
Analysts point to a host of reasons behind the latest surge in gold prices, as Bitcoin (BTC) is down 23% year-to-date. The rise in gold is not only due to the conflict in Ukraine, but also to worrying inflationary trends in the United States and Canada, where inflation is at its highest level in nearly four decades. This should remain a problem for several years to come, and it provides favorable support for gold.
Hope Robertson says there is a general reduction in risk in financial markets, with the tech-heavy Nasdaq down nearly 17% from its November 2021 high and the S&P 500 down about 10%. % from its peak reached in January 2022 – while gold is up 9% over the same period.
“With the humanitarian tragedy unfolding in Ukraine, this conflict will have a significant impact on the global economy,” according to precious metals news portal Kitco. “Ukraine is the third largest wheat exporter. It is also a major player in the energy market. This new conflict threatens global food and energy supply chains, which could drive up inflation.
How has gold performed?
Gold is up 8% year over year, after languishing for much of last year.
Since the 1999 low, gold has risen almost sevenfold and has been in a bull market for 15 of the past 22 years.
That said, gold has been eclipsed by cryptocurrencies like BTC, which has grown over 4,500% in the past five years. Investors looking for supercharged returns have been lured by the mind-boggling returns being achieved in cryptos, but that too could be about to change. BTC is down 23% since the start of 2022, while gold is up more than 8%.
Could it be time for gold to shine?
“I think we are seeing a fundamental shift in global financial markets that is positive for gold,” says Hope Robertson. “Inflationary pressures [are coming] outside the United States, with an inflation impression of 7.5%. It’s a bit higher than in South Africa, and it hasn’t been for many decades. Add to that geopolitical tensions in Ukraine and other supply chain issues that will affect growth – [these] could play a supporting role for gold to stay strong.
Is there an easy way to get exposure to gold?
Blockchain technology has come to the rescue of gold investors by allowing them to purchase a digital version of gold, fully backed by real gold, with the click of a button.
This solution is PAX Gold (PAXG) – a digital asset.
Each token is backed by a fine troy ounce (t oz) of 400 oz London Good Delivery gold bar, stored in Brink’s vaults. If you own PAXG, you own the underlying physical gold, held by Paxos Trust Company.
South African fintech Revix introduced PAX Gold (PAXG) in early 2020.
Revix offers PAX Gold as a standalone product for investors who want exposure to gold, but without the hassle of storage, insurance and security.
Not only that, but Revix offers 0% entry fee on PAXG purchases in ZAR for one week, from March 4 to March 10, 2022.
You can learn more about PAX Gold here.
Revix brings simplicity, confidence and excellent customer service to investing. Its easy-to-use online platform allows anyone to securely hold the world’s best investments with just a few clicks. Revix guides new clients through the sign-up process to their first deposit and first investment. Once set up, most customers manage their own portfolio but can access support from the Revix team at any time.
For more information, please visit www.revix.com
This article is intended for informational purposes only. The opinions expressed are not and should not be construed as investment advice or recommendations. This article is not an offer, or the solicitation of an offer, to buy or sell any of the assets or securities mentioned herein. You should not invest more than you can afford to lose, and before investing please consider your level of experience, your investment objectives and seek independent financial advice if necessary.
Brought to you by Revix.
Moneyweb does not endorse any product or service advertised in sponsored articles on our platform.