As South Africa continues to face challenges, gold continues to shine
It’s true that gold was discovered over six thousand years ago – where it was immediately recognised then as it is now, to be a metal of great value.
It has an allure to-die-for and millions have, when searching for it, smuggling it, and fighting for it.
Gold has been used as a store of value and for trading purposes before The Bronze Age.
Gold has been recognised as a safe haven asset for thousands of years and has been used as a form of currency and store of value by civilizations across the globe.
To date only the most celebrated Prime Ministers, Kings, Queens and Nobel Peace Prize winners have been featured on coins and medallions, commemorating accomplishments and honourable services that have marked history.
The gold price has appreciated by several thousand percent since Krugerrands were first created and minted in South Africa in 1967. The value has increased from $35 per oz to almost $1900 per oz today.
R10,000 put into Krugerrands back then would be worth over R12M today. In 1967, R1,000 was worth about $1,200.
The yellow metal has been managed quite well without the interference of any ministers of gold. The production of gold has reduced significantly in the past decade and continues to be a scarce resource and commodity.
The Rand has tanked from R1,20 to the Dollar to less than 5c to the Dollar. Put another way, in 1967 you could buy a dollar for R1 and today it will cost you R19. If this makes you down in the dumps, you should be holding gold.
The double whammy of a bullish gold price and a bearish Rand/Dollar exchange rate has created its huge success. Gold is still one of South Africa’s best, randiest of hedges and one of its best kept secrets.
In tandem with a diversified portfolio of investments, such as shares, property and cash, a seasoned investor would usually put 15 to 20% of their money into gold. Gold is the ultimate store of value when another BRIC in the wall gets together to create a new currency.
Gold is not interest bearing but at least you can sleep knowing that no one can break it up, break it down or spin it off. So take your gold out of the cabinet and hide it in a pothole, or in safe custody.
You can buy gold in the form of coins, bars, ETFs and numismatic items. When it comes to alternative assets such as coins, art, cars or watches, it is better to be a collector than an investor or a speculator.
It’s the ultimate physical insurance against the mother of all ministers, of which there are many around the world at the moment.
South Africa faces a range of challenges, and investors in the country are increasingly looking to gold as a reliable store of value in times of crisis.
While there are risks associated with investing in any asset, the benefits of this timeless asset cannot be ignored.
Whether as a hedge against currency fluctuations, geopolitical tension, or political instability, gold remains an attractive and valuable option for individuals in South Africa.