The characteristics of gold
Gold has been a popular precious metal for history, currency, hedging, jewellery and art. In the past, the gold-based gold standard currency system was usually implemented in the international market, but in the 1930s, gold coins stopped circulating. In the 1970s, with the end of the Bretton Woods Agreement, the world-wide gold standard finally gave way to the legal tender system. However, because of its rare, easy to smelt, process and coinage, unique color, corrosion resistance, and difficult to react with other substances, the value of gold does not fall. By the end of 2014, humans had extracted a total of 183,600 metric tons (equivalent to 9513 cubic meters) of gold. 50% of production is for jewellery, 40% for investment, and 10% for industry.
Historically, gold used to function naturally as a currency. In the mid-19th century, the gold standard system was formed. Although countries in the world now use paper money as the legal currency (and some countries ban gold from circulating as currency), gold is still regarded as a kind of “quasi- currency”, and gold reserves occupy an important position in the fiscal reserves of various countries.
Among precious metals, gold is an extremely popular investment commodity. Investors view gold as part of asset allocation to diversify risk. The gold market is also a popular target for speculation, using tools including futures and other derivative financial commodities. The price of gold (referred to as “gold price”) is positively correlated with the price of crude oil on a long-term basis; therefore, when the economy is weak, large sales of gold often occur. Traditionally, gold has also been regarded as a value-preserving commodity against inflation. Internationally denominated gold denominated in U.S. dollars also often falls as the U.S. dollar index strengthens. The spot gold transaction is real-time trading (T+0 mode), which consists of three major markets: Asian market, European market and American market. Its daily flow amount reaches three trillion (same as foreign exchange). Like futures, you can buy up or down.
As the second largest gold consumer in India, India is the traditional wedding season in India every year. Indians are very fond of gold. They often send many different gold jewellery in the wedding banquet, and the demand is increasing.
China has always been here, and gold has been regarded by the public as a status symbol of “local tyrants”. Gold is an indispensable substance regardless of the accessories used in daily life or the gifts on wedding banquets, and the scope of industrial use.
It has long been regarded as a precious metal. Silver is richer than gold sources and is used as a coin in modern monetary systems, sometimes even with gold. In addition to currency, silver uses solar panels, water purifiers, jewellery and accessories, high-priced cutlery and utensils (silverware), and silver coins and silver bars can be used for investment. Generally speaking, the speed of development of the world economy determines the total demand for spot silver. For example, in the field of microelectronics, spot silver is increasingly used as a protective layer; in the fields of medicine and architectural decoration, although the advancement of technology makes spot silver Alternatives continue to emerge, but spot silver is still on the rise due to its special metal properties.
Silver has always been the “shadow” of gold, but it is different from gold. Although silver has precious metal properties, its main use is still reflected in the industry. The international silver market has been in a state of oversupply since 2007.
Cryptocurrency can be converted to general currency(also called fiat currency) and it is completely decentralized with global acceptance. Cryptocurrency has earned considerable popularity worldwide because of some definite advantages. Let’s explore the benefits in order to understand the utility of accepting cryptocurrency in your financial management program.
As the most popular cryptocurrency by a significant margin, Bitcoin has far greater liquidity than its peers. This allows users to retain most of its inherent value when converting to fiat currencies, such as the U.S. dollar and euro. By contrast, most other cryptocurrencies either can’t be exchanged directly for fiat currencies or lose substantial value during such exchanges.
In this regard, Bitcoin is more like fiat currencies than most other cryptocurrencies – though it’s not yet possible to buy and sell Bitcoin in virtually any quantity at any time, as is the case with the U.S. dollar and other major world currencies.