Gold is a precious metal, which natural properties such as reagent resistance, uniformity, strength, durability, divisibility, high value of a small volume make it most suitable for money.
After paper money had appeared, most of it was pegged to gold, but the government abandoned such pegging step-by-step, and national money became more exposed to inflation and change in purchasing power. History knows a crop of examples when quantity of goods bought for gold bullion was the same as hundreds and even as much as a thousand years ago. Gold is an insurance asset for the world largest central banks, and purchase of gold has become a widely accepted mode of investment. In case of global threats such as world financial and economic crisis and other shocks gold provides an opportunity to save and increase one’s savings. Sufficiently high protection from inflation is the main advantage of investment in gold. The precious metal is a most stable asset, which fact in turn contributes to formation of its positive pricing environment in the market.
Since 2001 on, i.e. within the recent 10 years, the price of gold has grown by more than five times. There exists increasing demand for gold from the part of both professional players of the precious metals market and natural persons who are willing to change a portion of their savings for gold.
A matter of choice of time of investment in gold is by no means unimportant. Prices for gold in the world market continue their midrange adjustment after last year’s peak. According to analysis of gold price trends, this process will most likely continue.
In all cases, gold and other precious metals should be considered as a long-term investment for the period of at least 2 or 3 years.
Being hard assets, precious metals are traded predominantly by the banking institutions in the form of small bars and investment coins.
Small bars of precious metals (gold, silver, platinum) may be purchased and sold in the branches of the National Bank of the Republic of Belarus, and also in the banks of the Republic of Belarus granted licenses (permits) to trade in precious metals. Prices for purchase and sale of precious metals in the form of small bars fixed by the National Bank are available on the web-site www.nbrb.by.
Trade in precious metals with placement thereof to unalocated bullion accounts is an alternative to investment in precious metals in the form of small bars.
An unallocated bullion account is a metal account destined for recording gold, silver, platinum, and palladium in the form of small bars without indication of their identifying details.
Unallocated bullion accounts have the following advantages:
opportunity to save and increase one’s savings due to rise in value of precious metals;
opportunity to diversify one’s investment portfolio by investment in precious metals, so reducing the risk of loss related to adverse changes in the financial markets;
accessibility – free opening and operating an account;
high liquidity – sale of metals from the account in depersonalized form, performed by the bank on the date of customer’s addressing the bank;
value of depersonalized precious metals is free of expenses related to small bar production, storage and transportation.
The banks fix prices for purchase and sale of precious metals in Belarusian roubles and US dollars on a daily basis, taking account of price quotations in the international precious metals market.
Therefore, there are various modes of investment in precious metals, and such investments are sufficiently flexible in relation to investment strategy and investor’s preferences in terms of risks and yield.
Apart from investment function, precious metals have a status of a conventional product and are used in different branches of industry: instrument engineering, machinery manufacturing, medicine, gold-work (such use is typical of all precious metals, though degree of utilization of different metals varies). It means that all metals have their real value and are a promising and risk-free asset.