While the Bitcoin set the scene on fire a few days ago, gold and silver, precious metals since the dawn of time, continue to satisfy investors, especially in these uncertain times. At a time when the announcement of a vaccine brought down the yellow metal, we look back on a year unlike any other, which saw, among other things, yellow gold and digital gold breaking through the walls of sound. It must be said that few people expected such chaos when the time came for the new year on January 1, 2020. Yet as early as March, when the majority of economies fell under the yoke of a pandemic world and an unprecedented economic and social crisis, the cards have been reshuffled. Along this long road strewn with pitfalls, however, there has been some clarification regarding alternative investments which continue to benefit from a volatile economy and negative interest rates. While auCoffre.com, which we had the opportunity to present to you several times, organized its annual conference, we took the opportunity to remake this year 2020 and take stock for gold and silver.
Warning : This article is brought to you by the company Veracash. Crypto investments are risky by nature, do your own research and invest only within the limits of your financial capacity. This article does not constitute an investment invitation.
2020: Precious metals VS COVID-19 who will emerge victorious?
It must be said that the year had already started strong with an ounce of gold above $ 1600 in January 2020 and accumulated an increase of 23% over the year until early December when we speak to you. Note, as you have all followed, the crossing of the $ 2000 bar in the middle of summer in August 2020 which helped rekindle the flame of many commentators who at compare the race of gold to that of digital gold, Bitcoin.
Note that, if we look back over 10 years, the trend started to rise again as shown in the graph below, with a significant low between 2013 and 2019, and a meteoric rise in 2020, a year of chaos but also a peak for gold.
As for the’Money in dollars, its progression is also to be noted since we observe an exceptional increase of 35% since January 2020, and as we told you last week, some would even go so far as to say that silver is the investment of the decade: the bets are off!
What is also interesting to watch is the overall ratio of gold, silver and overall dynamics. They are often compared to rich dad poor dad. And the more time goes by, the more the years follow and look alike. It is indeed rare to see the price action on a silver chart diverge from that of gold, except that their values are not quite on the same pedestal. This is what explains whyTraders look more to money with the firm belief that it will make up for lost time, and having been invested at a very low price will pay off big.
Money, often (wrongly) considered poor man’s gold, is now becoming a kind of gold extension that it is good to follow closely as well as other precious metals as we had the opportunity to talk about in a previous paper.
Should we invest in gold and silver at the end of the year?
As you may have noticed, gold and silver prices are close to a low point, and this is quite normal. So now might be a good time to invest before they go on a wild ride, but you know the rule, it must be done knowingly, any investment is risky by nature. Gold, for example, has corrected to -14% since its insane rise last August to land today at around $ 1,770 an ounce, as for silver, it hovers around $ 22 an ounce. But should we fear a rise in interest rates and a massive fall in our precious assets?
We already explained it to you, interest rates influence the price of gold and these continue to behave in exactly the same way from year to year : that is to say the reverse as we can see below.
Clear, when interest rates are negative, the price of gold rises and investors or savers turn to protective assets, first and foremost gold.
Given the times we are going through and the economic outlook ahead, we should maintain negative real interest rates due to the massive government debts that states are accumulating.
Let us remember the post-war period when, at the end of World War II, interest rates remained negative in the United States for more than 30 years, fluctuating between -5% and -60%. We are therefore still a long way from seeing interest rates rise in our war against Covid-19, and safe havens like gold or Bitcoin undoubtedly have a bright future ahead of them, as Luke Gromen’s tweet shows.
So, will gold manage to do like Bitcoin in the months and years to come? To The Moon?
From what explained to us Tradosaurus when Aucoffre.com annual conference It’s a safe bet that gold and silver will continue to rise in the long term, according to technical analysis. Remember that Bloomberg forecast a bullish rally for gold through 2023, again, the bets are off!
We can therefore be quite satisfied with the trajectory taken by our precious ones, even though the enthusiasm of the markets at the announcement of a vaccine had tried to reverse the trend, presenting itself as a “game changer” of markets somewhat at picked up. The risks to the global economy today are still substantial, both the Fed and the ECB are considering new measures, so it seems unlikely to us that the heavy debt that weighs on our shoulders will be wiped so quickly.
Paul Trudor Jones, famous billionaire well known for his many investments even sees a strong correlation between gold and bitcoin, and this is not the first time that we have noticed. He thus explains in a graph the similarity of fractal figures between the price of gold and the stock super cycle of the 1980s and the Bitcoin rally in the decade we are going through.
Gold and silver: the new deal?
Yep, you must all be wondering why these old relics continue to appeal to savers and investors around the world. First, for all the reasons that we explain to you regularly and which make the singularity of precious metals :
- their safe side and safe haven;
- their solidity in the face of the crises of this world;
- the oldest values in the world;
- but also the fact that this means of payment never loses value.
In addition to their stability and low volatility, gold and silver are the opposite of fiat currencies : they demonstrate through the ages the interest in giving it special importance. Besides, in the latest edition of In Gold we trust, Ronald-Peter Stöferle and Mark J. Valek announce that gold is in the early stages of a new bull market, and they too declare a decade of the yellow metal.
This bet, our friends from Veracash, and parent company Aucoffre caught on quickly. Indeed, the story begins in 2012 with VeraValor, a payment system based on a Mastercard card backed by gold coins.
Then, faced with the success of the thing, its CEO Jean-François Faure decides to go a step further in dematerialization and universal access to precious metals and to alternative payments. He then creates the VeraCash, as its name suggests (or almost) a currency backed by precious metals gradually tipping the Aucoffre model over to that of a original neobank. The latest stage of the ascent is the project Veraone, which we particularly followed at Thecointribune since it combines the best of both worlds: gold and blockchain, resulting in the VRO, a fully gold-backed token with all of the Blockchain-specific features going well.
But back to VeraCash, this new generation card that is worth gold and out of date traditional banks, it was also the title of a previous article where you were presented with the little revolution that Jean-François Faure imagined. In short, whether you already own gold or not, it’s easy to go to the dark side of the force and take the alternative turn: by joining this new generation neo-bank and inclined to precious metals, the proposal of value is simple.
You can invest in physical gold, silver, even diamonds; But you can also make your current payments using the payment card linked to your account and associated with your reserve of precious. We will not tell you more, but it seems that there are new things for 2021 … For those who have followed the annual conference, stay tuned, they still have plans to surprise us!
If after reading this review, you realize that you missed some of the episodes, do not hesitate to take a look at theon the alternative investment platform, we tell you all about gold, its precious neighbors, and much more …
Karen is passionate about new technologies in general, and blockchain in particular! Uncovering trendy news, the latest market developments, and the treasures of the ecosystem, she is happy to help you discover this universe in all its colors.