The Russian invasion of Ukraine pushed prices up even more. Metals where Russia is a major player have seen significant increases, such as aluminum, steel and especially nickel. In addition to nickel, which jumped more than 80% in the last month, gold continued along the same line and has gained around 12%. Gustavo Neffa, Director of Research for Traders highlighted the rise in gold in the last 24 hours: “The price of gold set a historical record of US$2,076, a fact that shows that investors are looking for safe-haven assets in this context of global instability.”
Recently, Goldman Sachs estimated that the price of gold could touch $2,500 this year, which may open an opportunity for those who seek to protect themselves from inflation and the volatile context such as the current one – but it does not guarantee dynamic returns in the short term.
Maximiliano Suarez from Bull Market Group explained: “The investor must know that the investment in commodities, unlike the investment in companies or debt securities, does not generate a flow of funds, but rather is a mere bet on the revaluation of the asset.”
“Traditionally they have been considered a way to hedge against inflation, and particularly in the case of precious metals, they are also safe havens, and while they perform well at times like the current one, they can also spend relatively long periods of time without large movements or even significant setbacks, especially if the political and economic outlook clears. If the climate of uncertainty continues, they may be an appropriate option for moderate/aggressive profiles, although the investor must be aware of the risks,” he said.
How to invest in metals in Argentina?
There are several ways to invest in gold from Argentina through the financial market. To do it from the local market and in pesos, the most direct way is through the purchase of Argentine Deposit Certificates (Cedear) from mining companies. “The most popular are GOLD (Barrick Gold, a Canadian gold miner) and VALE (a Brazilian giant in the iron ore industry), but there are also other options such as HMY (Harmony Gold), AUY (Yamana Gold), PAAS ( Pan American Silver). At the local level we also have TXAR (Ternium Argentina) which operates in the aluminum and steel segment, and has had a good performance, also linked to speculation regarding the sale of part of its business abroad.Suarez explained.
To operate with Cedear, it is only required to have a principal account in a Stock Exchange Company, supporting funds and a bank account to make money transfers. In summary, the advantages of operating with cedears are that they allow coverage with a dollarized investment that follows a hard currency and the quotes of companies that invoice in said currency.
For those who have an investment account abroad, not only can they directly access foreign companies without mediation, but they can also acquire exchange-traded funds (ETFs) that directly replicate the price of metals/raw materials, the most relevant being GLD (gold ) and SLV (silver).
“Mining companies are very well represented by an ETF that is the GDX, which is highly operated. The main companies such as Barrick Gold (GLD) or Newmont (NEM) are included there. Today it finally made an adjustment like it hadn’t done for a long time because there was a Inverse flight to quality and a relief rally that pushes the shares, but in the context of a very high volatility index (VIX at 33%), “added Gustavo Neffa.
Also, he pointed out other options: “To operate the metal there is the ETF “SLV” or the silver miners specifically “SIL”. Gold futures can also be traded against collateral in dollars at Matba/Rofex.”
Purchase of physical gold
Offers to sell gold abound. They can be seen even on the biggest e-commerce platforms. But there is also a great risk of falling into counterfeits and deception, and ending up receiving gold of a purity lower than that declared. However, we can give an estimate of prices if you opt for this option. For example, in the main jewelry platforms in the country you can get 24kt gold from $70,000 to $2 million pesos.
Another good option is to resort to financial entities authorized by the Central Bank where authenticity is guaranteed and sales certificates are granted. Of course, there are not many active banks in this area and access can be complicated.
Banco Ciudad, for example, has a long history of selling high-purity fine gold (index 999). It offers it in ingots of 1, 5, 10, 50 and 100 grams that are manufactured in the country controlled by the entity itself and that can be paid in pesos.
cryptocurrencies
The cryptocurrency market also has something to contribute. This is the ERC-20 token, AABB Gold. “Asia Broadband, Inc. has created a hybrid cryptocurrency, AABB Gold Token (AABBG), backed by 100% physical gold,” says the company that developed it and continues: “AABBG is not a stable coin, but it has the stable quality of a stablecoin with a token price of 0.1 grams of the current price of gold.” AABBG can be purchased through the AABB Wallet app, available on the iOS and Android store under the name AABB Wallet.
“The AABB Wallet keeps your digital assets safe. No data is collected and transactions are 100% invisible to third parties,” says Asia Broadband and completes: “This preliminary version is intended to increase the circulation of tokens and generate income that can support and stabilize the token price once AABBG is openly tradable on the market.”
Conclution
Finally, Suárez affirms that those investors who want to invest in metals for the first time “should observe a medium/long investment horizon, with high risk tolerance and consult a professional. Past returns do not guarantee future returns and there may be capital losses when investing in the stock market.
Gustavo Neffa closed: “My opinion is favorable regarding the purchase of gold and we really like the ETF for this metal, which includes some 50 companies in the sector. I think you should have gold, and also silver, which we see very behind price”.
Source: Ambito
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