In this time of instability, one of the most important skills for everyone is how to invest and maintain your assets. In addition, gold, which is said to be the heart of the Burmese people, is currently still an investment option for most people. So why is gold so popular this time around? Is the price going up? The best investment? I would like to share what the weaknesses are.
In fact, gold has always been a precious metal throughout human history. In addition, its advantage is that it can be easily liquefied and used to make jewelry. In addition, the original color is bright and attractive. More importantly, unlike any other metal, gold itself has been used throughout the country as a currency in trade.
Coin coins mixed with gold were issued by B.C. Records show that it has been used since about 650. In addition, in the past, international central banks have used a system of printing their currency values in gold. These are the unique features and histories of the popular gold metal.
Gold is one of the most volatile markets in the short term. It is often called volatile. But over the decades, gold prices have always been on the upside. This is because
(1) High Liquidity.
Not only in the world but also in Myanmar, gold is easy to become silver. Liquidity means the ability to resell as quickly as possible at the current market price without any additional cost. In Myanmar, for example, gold can be easily resold. Other jewels, such as diamonds, can only be returned to the shop where they were purchased, but gold, like academia or Ba Than, can be resold to any store, not just the original store.
(2) Demand Is Increasing.
Demand for gold tends to increase year by year. Central banks in every country collect gold as national reserve gold. China, for example, collects a tone of gold each year. In addition to these national collections, gold is a major commodity in jewelry, and per capita consumption is on the rise. In addition, gold is a very conductive metal, so it can be used in computers, It can also be used in electronic devices such as circuit boards. In addition, World Investors often buy and sell gold for a variety of reasons. As a result, as demand increases, so does the price.
(3) Easy to store. Easy to carry You have to cross the country.
For example, when a person moves to another country because of instability like war in his area, it is often more convenient to carry gold than to carry banknotes. This is because gold can easily be sold at a fixed price per country if it has a certain density. Or when you have a lot of money to pay, paying in gold instead of a lot of money can be a burden. Even those who smuggle money into some countries will lose their money. It has been observed that gold is transported in various forms due to fears of confiscation, such as artificial gold teeth and implants.
(4) Supply Constraints.
Gold is an extractable resource. Because it is a natural resource, it will have a limit and will eventually run out. It is also rarer than other metals, making it a valuable metal. In the last five years, from 2016 to 2020, the rate of gold mining was around 3,500 metric tons per year. For the next five years, from 2010 to 2015, the annual extraction was around 3,000 metric tons. This means that despite the increase in gold mining, the rate of gold production has not increased significantly.
In addition to mining, the second largest market for gold in the world is gold refining. (Gold Recycle) The industry was able to supply about 1,600 metric tons a year between 2010 and 2012, but only between 1,100 metric tons a year between 2013 and 2020.
Another is that a new gold mine takes at least five to ten years to reach gold production. Therefore, if all of the above are added together, the price of the product will usually go up if the supply does not increase as much as the demand in general.
(5) Cultural Relations.
Gold is a precious metal. People’s belongings It is a unique metal that is associated not only with the features of the monetary system but also with the culture of the world. In Burma, the custom of buying four pieces of gold for more money has become so prevalent that it has even become a proverb. In addition, Chinese people still buy and collect gold bars as a traditional collection. In addition, at Indian weddings, gold is required. Around October, the wedding season, around the time of the wedding, the world gold market is the most in demand, with a tradition of dressing up.
In addition, gold is often used by investors as a hedge against inflation. In every country, conditions like COVID have led to more and more people choosing gold to protect themselves when the economy slows and inflation rises.
In addition, gold has the property of protecting assets in deflation, which is the opposite of inflation.
(6) A person who does not belong to the public.
Yes. Gold can be said to be private. This is technically called uncorrelation. Uncorrelation means that there is little to no direct impact on other commodity prices. For example, let’s say crude oil prices go up. Then the price of gas will go up and if the price of gas goes up, the transportation cost will go up. Then the prices of all the vegetables, meat and fish transported by trucks will go up. In the same way, if one falls, everything else falls. This is called correlation. For this reason, gold is often bought more when the economy is volatile.
(7) The economy of the countries.
In every country, inflation is always a side effect of economic growth. It varies from country to country. In the United States, for example, it is around 1.5% to 2% per year, and in Myanmar it is around 9%. At the same time, the price of gold tends to keep pace with inflation, as the cost of producing gold increases in line with inflation.
In addition, the main currency linked to gold is the US dollar. Depending on the state of the US economy, the US dollar may be weak. As the world’s number one economy, the United States has become more competitive and the dollar has weakened, leaving gold prices volatile in the long run.
Due to the above factors, gold will remain on the upside in the long run. To give you another example, once upon a time having dinner with a goldsmith, the goldsmith told how he started his gold shop. The first is to borrow money from a bank, buy gold and use it to prepare to open a shop. You have to pay interest, so you have to worry a little bit to make a profit. But it took about six months to prepare for the opening and take action. When the store opened, nothing was sold, and the gold bought was doubled in profit.
The above points share the reasons why gold is fluctuating in the long run and the good points of gold.
We will continue to share the pros and cons of gold in the next section. Then we continue to consider whether gold is the best investment. Adequate knowledge can easily overcome serious difficulties. More Get Quotes Here…
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