The global gold market has gained more than 6% to 8% in the previous month. The falling value of the united states dollar and anticipation from the US Federal Reserve were this slow the interest rate movement and this increased investor interest in the precious metal market.
The gold value itself has climbed more than $2,000 per ounce in March 2022, Reaching the highest price for the first time since August 2020. The price movement was a response to Russia's aggression against Ukraine in February, This made a significant impact on the geopolitical uncertainty and increased gold’s attractiveness for investors seeking a safe haven option.
Even on the previous market rally, the price itself dropped to a two-year low price in late September, and it's continued struggle to regain the $1,800 price level. But even like that, it's still becoming the safest asset out there as a wealth reserve.
In this short article below, I will make some important key points about why gold it's still a good investment for 2023?
Gold's main use cases
Gold is mostly used as jewellery and investment option. The global gold market demand recorded more than 4,000 tonnes in 2021, This was becoming one the highest demand in the past 10 years, the Market request has jumped by 50% during the fourth quarter of ths year, according to the World Gold Council data.
The request is divided among several option such as Jewellery accounted for 2,220 tonnes, and coins and gold bars with more than 1,180 tonnes.
Centralized entities, such as banks and other financial institutions was bought gold as a reserve option with a demand value of more than 463 tonnes.
It's also affecting Technology global market for example, like parts that are used on electronic devices, the demand itself has accounted for more than 330 tonnes in this year.
But Exchange-Traded Fund or ETFs demand has fallen by only 173 tonnes in 2021 after the highest demand record that skyrocketed more than 874 tonnes in 2020.
Even so, Gold still becoming one of the best safe haven options out there, as well as an investment option especially for long-term run.
Gold Potential
The gold price itself has been analyzed with expectations of multiple interest rate hikes to offset that concern about the economic recovery from the Covid-19 pandemic and inflation.
Basically for most people, Investing in gold will be considered to be an option for a hedge against currency inflation, where it'll retain its value while the fiat buying power erodes. But it also has a drawback where it becomes less attractive when the interest rates rise.
Gold didn't give any interest or dividend payments like stocks or fiat, but the gold market demand increased by more than 6% to 8% in November because of some geopolitical conditions in various regions.
Because of that, in the past month even though the demand was not high as the previous year but it still have the potential for a long-term run since the Global Recession in 2023 has been forecasted by various source.
Stock-to-Flow Ratio Model
When it compared to other commodities such as silver, gold has a much better and higher stock-to-flow ratio: The ratio for silver was around at 22, whereas Gold’s stock-to-flow ratio on the other hand more than 70. It only takes about 22 years for silver to achieve this point, Gold on the other side will need 70 years for this. This makes gold as a very rare commodity and has tremendous potential even for saving or a long-term investment.
Low-Risk Investment Option
Gold itself has becoming one of the safest and most trusted investments option, It's becoming unique commodity that can be used as an investment or savings for a long term run, The market was also becoming the subject to relatively high volatility but it's also offer a more safer option by comparing it to other market used for investment in the market today, gold has becoming the best safe haven option across a number of countries for a long time, Besides, with the internet revolution today we also can see a lot of new unique innovations especially tokenized gold where it'll disrupt the global gold market.
Blockchain-Based Gold Ecosystem
We see a lot of new innovations now, especially with the internet innovation, It's enabling a new way to access things, especially the gold commodity. Through Digital Gold, everyone right now can buy gold in the form of tokenized digital assets, This platform will be introducing a new way for everyone to purchase and trade gold in form of digital assets.
Digital Gold will be based on the blockchain network for a more transparent, safer and efficient mechanism. Their team will creating a new tokenization asset for the gold commodity where it's based on the smart-contract network, thus it'll ensure an automation system with more transparent processes without any centralised entity.
This will also facilitate the transaction process with more low-spread orders, Besides, it's also implemented with the high liquidity on their Bullionstar Vault. Every token will be backed by pure gold, which will ensure more transparency where each of them will be representing real gold value.
Conclusion
Gold still becoming a solid asset even for 2023, Neither for saving nor investing, especially for the long-term run. We can see the value itself has reached more than $2,000 per ounce in 2022, Peaking at the highest price for the first time since 2020, Besides, we also can see its performance from previous things that happens, such as COVID-19 or Russia-Ukraine conflict. Overall, Gold still becoming a good investment for 2023.
Gold also can be implemented into various markets like blockchain where we can see the Digital Gold concept to provide a new blockchain-based gold marketplace ecosystem for everyone, Enabling traditional investors or traders to access the crypto market without hassles. So I really recommend you guys try it!