Stock assets in gold: prospects and advantages of investing in precious metal
Gold is considered one of the safest investment options. Especially investments in precious metals are relevant now, when debt market rates are regularly reduced. As a result of increased interest, total stock assets on the stock exchanges exceeded the 100 million troy ounces mark, which was a record high.
The increase in demand for this metal is carried out against the background of the processes of slowing down of the world economy, as well as due to strained trade relations between the USA and China. Investors do not want to take risks, so they invest in proven assets that have proven their reliability over the centuries.
On the last day of last month, stock assets in gold increased by 241 thousand ounces to over 100 million ounces or 3.12 thousand tons. For a month there is an increase in interest by 417 tons, and the growth of investments is fixed since the beginning of this year and totaled 536 tons.
The interest in gold on the part of investors is conditioned by measures to stimulate the economies of various countries. For example, in the G20 countries programs to provide financial support to markets by the regulators amount to more than 7 trillion dollars. In the United States, this figure exceeds $3.7 trillion, while in the European Union – $1.7 trillion. In addition, national banks are reducing key rate indicators. The U.S. Federal Reserve has reduced this indicator to almost zero, and negative values are also considered. According to analysts, the continued implementation of financial support may affect the inflation rate and lead to an increase in the value of the precious metal. The fact is that interest rates with low values reduce the yield of bonds, so investors buy precious metals.
An important factor in the growth of gold stock assets is the growing tension between Washington and Beijing. The U.S. reduced the issuance of entry permits for Chinese citizens, and introduced a number of sanctions restrictions for Chinese officials.
High demand for gold is beneficial for the market – it compensates for lower activity on the part of consumers. For example, in the first quarter of this year the total demand for gold from buyers fell by 28% to 567 tons. The use of metal in the jewelry industry declined by 39% to 326 tonnes. The price on the spot market reached $ 1744 per ounce and since the beginning of the year the price has increased by 15%. Financial investors are the most interested in the precious metal. Thanks to them, the situation in the global market has improved, as investments in gold helped to balance the decline in activity on the part of the industrial sector and national banks.