Gold surged 30% due to pandemic, could keep going

As global stock markets tick further into unchartered territory, another asset class has been catching investors’ eyes: Gold.

Gold has become a favourite investment for many in 2020, including some financial gurus like Ray Dalio. Gold’s spot price has reached a high of $1,860 per ounce, which it hasn’t seen in almost 10 years, and has gained over 20% so far in 2020 and 30% over the past 12 months.

Now, as coronavirus uncertainty continues to push the precious metal higher, some experts are suggesting gold could hit record all-time highs.

This has left many people wondering whether now is the right time to invest, or have they missed the boat?

Revix, the online investment platform backed by JSE-listed Sabvest, offers a simple and low-cost way to invest in gold. With no monthly account fees and no sign-up fees, you can start investing with as little as R500 as a one-off investment. It’s the easiest way to get exposure to the precious metal.

Invest in gold with Revix

Why is gold rallying?

Governments all over the world continue to inject unfathomable amounts of debt-based stimulus into their respective economies.

In fact, the world has 217 trillion dollars of debt now, which has raised some very serious systemic financial risks.

This has supercharged existing upward momentum for the precious metal as gold is seen as a diversifying investment that acts as a “safe haven” during political and economic uncertainty.

Why is this? Well, gold is scarce, and less than 2% of gold’s total value is extracted from the earth every year. So, when more paper money is printed relative to how much gold is mined, each ounce of gold becomes more valuable in rand terms.

History is full of collapsing empires, political coups, and the collapse of currencies. During such times, investors who held gold were able to successfully protect their wealth and, in some cases, even use the commodity to escape from all of the turmoil.

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Prices set to rise

The last time gold reached an all-time high was in September 2011 as a result of the recession. It took three years for the precious metal to respond to the government fuelled stimulus programmes. This time round, within weeks, over five times the value of 2011’s stimulus was injected into the global economy by central banks and governments. This has resulted in analysts predicting that gold's rise will happen much faster and go far higher as governments continue to print money at rates we’ve never seen before, with no signs of slowing down.

Despite hitting its highest levels in several years, there are still returns to be made from investing in gold in the second half of 2020, according to Bank of America, which, last month, backed an “all-time high” prediction, saying the precious metal could hit $3 000 per ounce.

Is now the time to buy?

Sean Sanders, CFA Charterholder and CEO of investment platform Revix, comments: “Every investor should have some gold in their portfolio and look beyond what’s happening in front of us right now. We have to think about what the global economy will look like in three years' time and with the trillions of new dollars in circulation, there’s a strong possibility of inflation emerging.”

He continues: “If history is anything to go by then holding gold, and other hard non-inflatable assets like silver or Bitcoin, would be a better risk-adjusted investment than stocks or bonds.”

Invest in gold with Revix

How to invest?

Through Revix’s online platform, you can invest in physical gold held on your behalf in fully insured LBMA London vaults and not have to worry about the custody and insurance burdens of physical ownership. Revix offers a Paxos gold token, which is backed by one fine troy ounce of the highest quality LBMA gold and, unlike other investments, Revix enables you to buy and sell your gold holdings whenever you choose, whether that’s in a couple of hours after purchase or in many years’ time.