After doing a lot of research, getting interviews with experts and testing several alternatives to invest in gold in practice, I can finally share with you the best way I found to invest in gold.
The purpose of this article is to be a complete guide on everything that involves investing in gold.
- Initial investments of just R$5,000 .
- Administration fee of 0.60% .
- Passive Fund , which closely follows the Gold price.
Gold has been known since antiquity, being one of the first metals worked by man. Known from Sumer, in Egypt there are Egyptian hieroglyphs from 2600 BC that describe the metal, which is referred to in several passages in the Old Testament.
It is considered one of the most precious metals, and its value has been used as a standard for many coins throughout history.
Currency, or money as we know it today, has undergone several transformations, in the following order:
- Barter (primitive exchanges, especially from the exploitation of nature, such as wheat for example).
- Currency Goods (rare goods such as salt in ancient Rome and bamboo money in China).
- Metalism (precious metals such as copper, bronze, iron, silver and gold).
- Paper Money (deposit certificates backed by precious metals).
- Currency (deposit certificates without full metallic backing).
- Scriptural currency (scriptural currency corresponding to debit and credit or invisible, without physical existence, such as bank deposits).
Each transformation above was necessary to avoid problems of the previous medium of exchange.
Metalism ,for example, had a great acceptance, since precious metals have a more limited supply than cattle, for example.
Gold is rare, durable, fractionable and homogeneous. For the time, these factors made it the number 1 choice to be an instrument of exchange, common denomination of values and reserve of values.
After centuries serving as the main form of exchange, Gold was gradually replaced by paper currency and paper money due to its difficulty in handling, transporting and custody.
The ease of making payments today through paper money (cash notes), credit card and other transactions without using paper money, is a factor that hardly anyone will give up.
However, the free printing of money by Central Banks (with virtually no backing in Gold) has direct consequences such as inflation and an increase in public debt.
Therefore, several people seek to invest in gold to protect themselves from this lack of backing, which appears clearly in financial crises.
- Low Volatility Until 1999.
The evolution of the Gold price between 1994 and 1999 was very slow and practically stayed at zero-to-zero. The reason is that the price of Gold here in Brazil is heavily influenced by the Dollar.
Until January 1999, the exchange rate standard in Brazil was the Exchange Band regime, in which the Dollar could only vary within this band imposed by the government.
After that date, the value of the Dollar began to vary freely, with more volatility and, consequently, affecting the price of Gold.
- Gold Has A Return Of 70% In A Single Month.
The month was January 1999. The pressure for the devaluation of the Real had been strong since 1994. However, due to exchange rate bands, the value of the Dollar did not rise as much as it should, if it could vary freely.
With the end of the exchange rate bands and the beginning of the free variation of the Dollar, the value of the Dollar rose by practically 65% in January 1999.
Gold followed this trend, with a return of 70% in that month.
- The Strong “Alta Channel” Since 2008
Note how the price of Gold has touched both the top and bottom of the channel 3 times in this extended period.
Not that I believe that the price will “respect” the channel, nor that this type of Technical Analysis is risk-free, but when a trend becomes clear in a period like this of almost 5 years, it is, at least interesting to watch.
Thus, Gold is quoted today close to R$ 100.00, a value practically 10 times higher than the value of July 1994 (R$ 11.35).