EN
GIG-OS

Title defense: gold in the financial boxing ring

Global InterGold

 

When speaking of Financial Security, we always emphasize that its foundation is gold. However, some might argue that there are other valuable assets in the world, such as crude oil, real estate and diamonds. Why is gold so highly regarded among other valuables?

Challenge accepted – let's see how the yellow metal fights back, responding to competition.

 

Fight No. 1: gold vs crude oil

Even though crude oil is typically referred to as “black gold”, it is merely a fuel and an industrial resource. Opponents vary greatly in value: even a small grain of gold costs a lot of money, which is not the case for a drop of crude oil.

As of November 5, 2019, the price of an ounce (31 grams) of the yellow metal is $1,504.

The price of a barrel (158.988 liters) of crude oil based on its grade ranges from 50-70 dollars.

It turns out that a compact 1oz gold bar is equivalent to 3,500 liters of crude oil.

 

Fight No. 2: gold vs real estate

Any house or apartment requires fixed costs: maintenance costs, repair costs and paying taxes. When the need arises, finding a buyer and selling such types of assets quickly can be quite problematic.

You cannot take a house with you on a trip and sell it while you are away unlike gold bars. In addition, ownership of the precious metal is confidential, while property rights are subject to strict accountability.

According to statistics, real estate cheapens during financial crises, as opposed to gold – its price increases during recession, preserving and accumulating the input.

In the chart: housing prices in the United States. Evidently, the figures dropped sharply during the global economic crisis of 2008.

In the chart: for the same period of time, the price of gold demonstrated a steady growth, gaining momentum: nearly $2,000 per ounce.

 

Fight No. 3: gold vs diamonds

Diamond cutting and polishing is a complex and time-consuming process. All gemstones differ from each other – purity, color, gloss and other factors determine the price. Given that buying diamonds requires knowledge and experience, such products have low liquidity and are not available to the masses.

Gold bars made according to one standard have equal value and do not require comparison of parameters. Moreover, gold is assigned an individual currency code*, meaning that a valuable metal remains a universally recognized financial tool for the foreign exchange market operations. Diamonds lack such a status.

 

To sum up:

  • Crude oil is a raw material.

  • Real estate is a property.

  • Diamonds are luxury goods.

  • Gold is the best asset to protect savings and strengthen Financial Security.

 

10 REASONS TO BUY GOLD

 

Glossary:

*Currency code — a sequence of numbers and/or letters used to name and identify currency in various information transfer systems.

 

Rate this article:
Created: 04.11.2019
RELATED NEWS
Expert: gold will once again be the main reserve currency Expert: gold will once again be the main reserve currency
The response to the crisis: do not lose heart, take action The response to the crisis: do not lose heart, take action
Gold is invulnerable to economic tornadoes
Gold is invulnerable to economic tornadoes
On the threshold of change: gold is gaining momentum
On the threshold of change: gold is gaining momentum
The “inflation bomb” refuge The “inflation bomb” refuge
Gold is going to conquer Mars
Gold is going to conquer Mars
Gold: time for new records
Gold: time for new records
The rising power of gold
The rising power of gold
[VIDEO] Gold standard: lessons learned
[VIDEO] Gold standard: lessons learned
Will gold help stop coronavirus?
Will gold help stop coronavirus?
Take the test
and find out if you are exposed to the Lack of Financial Security virus.
Register on the platform to receive the test.