In this context, during 2022, the world’s central banks, according to data from banks and organizations such as the BIS, the International Monetary Fund (IMF), the World Gold Council (WGC) and other sources, bought 1,136 tons in 2022, the level highest since 1967 and 150% more than in the previous year.
“The central banks last year they invested around US$70,000 million in gold reserves because they consider that it is an asset that retains its value over time and allows reserves to be capitalized when there are inflation and lower demand for money”, explains the economist Federico Glustein to Ámbito.
The gold rush: why it occurs and what numbers it has
In fact, the WGC reported that demand for the precious metal hit an 11-year high in 2022, recording the second-highest level of annual demand in the past 55 years. This came two years after its price fell to its lowest level in a decade.
The reason for the rise indicated by the WGC is precisely the “colossal purchases” by central bankswith strong bets from emerging countries, such as China and Turkey.
However, the world ranking of top 100 gold holding countries It did not show strong changes and continues to be led by the United States, with more than 8,133 tons, followed by Germany with 3,355 tons, while Argentina is in the middle of the table, with almost 62 tons.
Thus, in the last quarter of 2022, the metal value of gold rose 19% and exceeded $1,900 per ounce, its highest price in nine months. This dynamic meant that the holdings of exchange-traded funds linked to the commodity enjoyed fewer outflows than in the previous year.
Investing in gold: how 2023 comes
And this year, although it has fallen a bit in recent days, gold It maintains its value above US$1,900sustained by the uncertainty going forward in the international economy, so it is expected that central banks will continue to be net buyers in 2023, although this demand may not reach the levels of the previous year because “it allows avoiding inflation and the issuance of money do not damage the general reserves”.
Consequently, experts maintain that gold is on its way to consolidate itself as a refuge of value to face world inflation, taking into account that the characteristics that make gold one of the favorites of central banks are its performance in times crisis and its role as a store of value in the long term. So is it a good time to invest in this precious metal?
For Glustein, “It is a good time to invest in gold”. He details that there are several ways to do it. One of them is in the physical metal. Some banks sell physical gold and he considers that “that would be the best option because it could have greater profitability in the long term.”
Gold: how to invest in this precious metal?
From Grupo Broda, the economist Elena Alonso, points out in this regard that what is done in these cases is “buy physical gold through the banks and keep it in a safe deposit box or wherever the investor wishes”.
The problem, in these cases, according to Glustein, is that it is very difficult to make it liquid afterwards because a claimant must be found at the right time, which is when it rises, in order to have better profitability.
In this case, mention that another option is aim for jewelry or items that contain gold, “that can be saved and does not have as much variation over time”. The problem with this option is that the profitability is usually lower and also, of course, the risk of theft, but, as in the previous case, they can be kept in safe deposit boxes.
“Another more sophisticated alternative is the gold futures, a financial operation in which a guarantee is required to carry out the operation”, says Alonso. In this case, if the investor waits for the price of gold to rise and wants to protect the capital, they can buy that asset, whose value responds to the forecasts of the value of the metal. “If gold goes up, he’s going to get a daily difference for the price movement he has,” he explains.
For Javier Marcus, Business Manager at Southern Cross, “the gold futures of MatbaRofex They are one of the best alternatives to invest in gold in Argentina”, since they allow you to enter and exit in pesos in a contract of one ounce of dollarized gold.
“It is not necessary to have gold and it allows risk coverage at the price of gold and related assets in a local market. Also, to speculate, it has a great seasoning: allows you to leverage more than 20 times”, he describes.
Marcus explains that this product follows the prices of the Chicago Mercantile Exchange, which allows for arbitrage pricing and, therefore, small spreads to enter and exit, which, for Marcus, is “a very important issue when trading gold.” .
Likewise, another option to invest in gold is ETFs, which are funds tied to the price of gold. “These are listed funds, which are like baskets of assets related to sectors, such as gold, for example,” says Alonso.
Cryptocurrencies and CEDEARS
On the other hand, there are the cryptocurrencies tied to gold, which fall into the category of stablecoins and are a safer option than other assets in the crypto world. They are similar to gold funds and some of them are Pax Gold, Gold Mint or Tiberius (which is actually a mix of precious metals).
In Argentina there are also some brokerage houses that offer Common Investment Funds (FCI) tied to gold And finally, Alonso mentions that another possibility is to buy the CEDEAR (shares of companies from other countries listed on the local stock market) of a gold mining company, or a supplier to the gold sector, which will appreciate if the value of gold rises or the associated industry grows.
There are many options, however, for Glustein, this would not be the best time to invest in assets derived from that metal, although yes to bet on gold itself. Because? It is that he considers that “the industry linked to this precious element had a fall last year and that means that there is a strong probability that everything that is linked to gold assets will fall this year.”
“It is expected that, having higher investment in physical goldETFs and futures move or go lower, especially in a context where, while it’s going to be good for gold, it probably won’t reach 2022 central bank buying levels.” Glustein concludes.
Source: Ambito
I am a 24-year-old writer and journalist who has been working in the news industry for the past two years. I write primarily about market news, so if you’re looking for insights into what’s going on in the stock market or economic indicators, you’ve come to the right place. I also dabble in writing articles on lifestyle trends and pop culture news.
