Digital Gold; Digitalized Physical Commodity (Gold)
A good investor would always have this mindset, which states that"Do not put all your eggs in one basket," because if you do, there might be a repercussion for it. Some times it might seem that the risk is not much or that it risk-free, yet portfolio diversification is one of the secrets of maximizing the profits from your investment.Commodities are investment vehicles, which can be transformed into other forms of goods and services. Investing in commodities is for everyone, irrespective of how vast you are in it or you are still a newbie because it is in diverse forms. However, there are certain things that everyone needs to consider before opting to invest in commodities.
- Commodities investment is a good way of bringing about portfolio diversification and many times when there is inflation, it can serve as a hedge against it.
- Volatility is not far from an investor that puts his/her eggs in one basket, even in the case of a single commodity.
- There are certain factors that affect the prices of commodities and they are; supply, demand and geopolitics.
- Investors of commodities have two options to make profits: It is either they choose to hold physical commodities such as gold bullion or they trade commodity-based futures, ETFs, stocks and the likes.
What does it mean to invest in commodities?
Commodity trading has a long-standing history and ca be dated back to the days of a trade by barter when people of diverse cultures and believes, exchanged silks, spices and other goods that were not so common among themselves. However, commodity trading to date is still a common phenomenon, where stocks and bonds are exchanged.
This form of investment is still in vogue and many are hoping to get into it, where investors have capacities either to buy shares from companies that are commodity-related or to buy and hold physical commodities, such as, gold.
Benefits of commodity investment
- Protection against inflation.
- The prices of commodities are subject to market fluctuations, yet their demands are very strong.
- During inflation in the economy, the demand for commodities is always higher and this makes the price to go uptrend.
- When the US dollar is going downtrend, the commodity is always on the reverse.
- The diversification power of commodity helps to bring about an increase in profit.
- Investors ost ties are always happy to invest in commodities.
Crude Oil Vs Gold
Crude oil and Gold are one of the most common commodities that are traded in the commodity market, which is why I am using them as a case study.
Crude OilCrude Oil is not limited by the most common product that we know of, which is gasoline. It is also used to produce thousands of industrial and household products. Which mean that crude oil is most times demanded. Crude oil like so many goods obeys the law of demand and supply. The higher the demand, the higher the price and the lower the supply. However, on the reverse, the lower the damnd, the higher the supply and the lower the price. The nations were crude oil are not explored tend to demand more of it and its product and this increases the price. Also, geopolitics, such as the crisis in oil-producing countries tend to increase the price of crude oil, because there will be lesser supply.
Investing in Crude Oil and its Challenges
Investing in crude oil as a commodity is not in any way easy and that is why investors prefer to go for other options that can ease being involved in crude oil investment, such as, futures, but futures is volatile and capital intensive. So, they most times opt for shares and stocks in oil companies, mutual funds and ETFs.
Gold
Investment in gold is a tool for diversification and growth. any nations of the world today, particularly central banks believe so much in it, that they stock gold for present and future benefits. It is used to make thousands of products such as jewelry and other forms of technologies. Investors, on the other hand, understand the positive impact and the implication of investing in gold both on individuals and on the global economy. It is one of the safest investment that human has ever thought of. Inflation can be hedged through investment in gold. Just as it has been said earlier, when the US dollar goes downtrend, you can be sure that the price of gold would increase. It has also been well known that central banks invest in gold to diversify their monetary reserves, therefore, it is a tool for diversification and when they hold it, the price increases.
Investing in Gold and its Challenges
Gold as a physical commodity can be easy to own by purchasing the gold bullion (either bars or coins), which is unlike crude oil, but storing it might pose a serious challenge, which means you have to buy a safe storage place, also called vault, most done with bullion company or other trusted companies. However, buying gold bullion bars or coins might also be challenging depending on your geopolitical zone. Some counties have certain restrictions. Presenting legal documents might be another major challenge. Also, transportation is another high risk, coupled with other factors.
Digital Gold
For every problem, there is sure a solution. Many who have been longing to invest in gold but cannot, now have a sure and safe way of doing that. Gold investment is for sure one of the safest investments, but just as earlier said, it comes with its challenges. However, these challenges have been well taken care of through the digitalization of gold physical commodity.
The Digital Gold Company LTD, a well-trusted company, having her activities (invested gold) audited and storing the gold bars with a trusted gold bullion company, has now made it possible for investors to invest in gold and make gains from it as the price of gold in the market increases. Some of the peculiar attributes of Digital Gold are as follows:
- Blockchain-based: It possesses all the characteristic features of blockchain technology, such as decentralization, transparency, security, trust, fast transaction, immutability.
- Fast Transaction: Digital Gold token is issued on the Ethereum blockchain. Therefore, the transaction delivers fast without any restriction.
- Less volatility: GOLD token is in all wise different from other cryptocurrencies that are highly volatile. The token price is always equivalent to the price of gold in the gold global market, because it has been pegged to gold price as 1 gram of gold is equivalent to 1 GOLD token.
- Instant Transaction on Digital Gold website: You can instantly buy and sell GOLD token at any given time (24/7) on the website dedicated to the development of Digital Gold. You do not have to wait to get a buyer or a seller. It is instant.
Conclusion
It is no longer a gainsaying to say that commodity investment is one of the safest and profitable forms of investment, however, investing in gold seems to stand out, which has been improved and made better through Digital Gold (GOLD token).
You can access more information through the following links:
Authored by: Bonwin