While the differentials of real estate to kenization continue to show a new path for those who prefer to bet on real estate as an investment, those who look at the gold mines are already beginning to realize the advantage of uniting token and gold metal.
Gold mining is a global business, with hundreds of companies exploring areas in dozens of countries with significant results and several prospecting operations underway.
There are no signs of a drop in the supply of gold for exploration and gold has appreciated around 24% in 2021, reaching an all-time high world price.
Against this backdrop, the outlook is that the metal will continue to be a preferred store of value for many, but are there downsides to investing in gold?
Could the tokenization of gold be the way for more people to benefit?
In this article, BLOCKBR shows how this niche is doing and the advantages and disadvantages of each option for investing in gold!
10 LARGEST GOLD MINES IN THE WORLD
Where are the largest gold mines in the world? Let’s talk about the top 10 mines in 2021, according to data from S&P Global Market Intelligence.
1 – NEVADA GOLD MINES
Nevada Gold is located in the US state of the same name. It is operated by the Canadian company Barrick Gold Corporation. Gold production in 2021: 94 tons.
2 – MURUNTAU
This gold mine in Uzbekistan is nowadays the largest open pit mine in the world. Operated by Navoi Mining, also Uzbek. Gold production in 2021: 85 tons.
3 – GRASBERG
The Indonesian mine is under operation by a partnership between the company PT Freeport Indonesia and the Indonesian government. Gold production in 2021: 41 tons.
4 – OLIMPIADA
It is a Russian gold mine, operated by the company Polyus Mining, from the same country. Gold production in 2021: 34 tons.
Tokenization and Stock Exchange: which is the best to invest in?
5 – PUEBLO VIEJO
The Pueblo Viejo Mine is in the Dominican Republic and is operated by Barrick in partnership with Newmont Corporation, a US mining company. Gold production in 2021: 23 tons.
6 – KIBALI
This mine is in the Democratic Republic of Congo and is operated by Barrick. Gold production in 2021: 23 tons.
7 – CADIA
It is an Australian gold mine, operated by the company from the same country Newcrest Mining. Gold production in 2021: 23 tons.
8 – LIHIR
It is located in Papua New Guinea. It is operated by Australia’s Newcrest Mining. Gold production in 2021: 20 tons.
9 – CANADIAN MALARTIC
It is a Canadian mine that started operating in 2014 and is operated by Canadian Malartic, also from Canada. Gold production in 2021: 20 tons.
10 – BODDINGTON
It is Australia’s biggest gold mine. Operated by the Newmont Corporation. Gold production in 2021: 20 tons.
By 2020, the stock of unmined gold was estimated at 50,000 tons. If we consider the 2019 volume (3,500 tons), that’s about 15 years of supply, plus new mines discovered and not yet operated and the potential regions.
In Brazil, gold production in 2021 was 15% higher than in 2020 and there will be a growth in gold mining projects in the coming years.
WHAT ARE THE ADVANTAGES OF INVESTING IN GOLD
IS A PROTECTION IN TIMES OF CRISIS
Gold continues to be a safer alternative to face times of crisis, with consistent valuations over the years – although it cannot be considered as an investment, but rather as a store of value.
Unlike fiat currencies that depreciate among themselves, gold has no parameter in the metals market to lose attractiveness.
PROTECTS THE PORTFOLIO AGAINST STRONG FLUCTUATIONS
Gold’s stable behavior, compared to other financial assets, makes it a way to protect part of the investment portfolio for times when the dollar, cryptocurrencies, stocks and bonds suffer big losses – and people end up migrating to gold.
IS BALLAST OF NATIONAL ECONOMIES
The monetary reserves of many global economies are backed by gold, which guarantees the value and demand for the metal, because countries in deep crises soon resort to their gold reserves, creating a domino effect in other economies.
DISADVANTAGES OF INVESTING IN GOLD
SHOULD NOT BE THOUGHT OF IN THE SHORT TERM
Even though gold is a commodity with long-term valuation stability, it has short-term volatility. Reserves can depreciate in value if you want to give them up quickly.
GOLD IS A VOLATILE ASSET
Even though gold is a great store of value and appreciates consistently over the long term, it is subject to significant fluctuations in the face of economic crises. Buying in the middle of a crisis can be a bad deal when it passes.
MARKET OPTIONS FOR INVESTING IN GOLD
PHYSICAL PURCHASE
This modality is basically contacting a brokerage company to buy gold bars and store them in a location chosen by the client.
- Minimum purchase price is high;
- Holding physical gold stock is not a safe option;
- Low liquidity operation, because most people prefer to buy contracts or invest in funds.
GOLD CONTRACTS ON THE B3
It means buying gold bullion through contracts that guarantee a price for the gram of gold at a future date.
- You need to open an account at a brokerage house;
- You have the option of keeping the gold in custody or withdrawing and storing it at home;
- It involves high starting values for most people;
- It has a custody fee and brokerage cost;
- Income tax is levied according to the investment value.
GOLD INVESTMENT FUNDS
In the investment fund there is no physical purchase, but in quotas in funds that invest in buying and selling gold in the market, realizing results for the quota holders in proportion to their investments.
- You need to open an account at a brokerage house;
- Not many companies operate with this type of fund;
- Many groups are closed (with high entrance fees);
- Even in affordable groups, the entry fees are not low;
- There are administration and custody fees that vary according to the management institution.
UNDERSTAND GOLD TOKENIZATION
As we saw earlier, the known ways of investing in gold involve factors that end up keeping most investors away:
- These are processes with a high level of bureaucracy and control;
- They require high starting values;
- They involve fees and taxes.
The purchase of gold tokens is an alternative that completely changes this scenario. Here are some advantages, especially for small investors.
NO BURROCRACY
Blockchain trading has no intermediaries between the holders of the gold positions and the investors. This reduces trading to a simple peer-to-peer purchase, between the parties and with no regulations along the way.
ACCESS TO SMALL INVESTORS
The entry values are low and there is the option for the owner of the reserves to split the gold reserves into many tokens of smaller values. These situations allow small investors to participate.
HIGH SECURITY
Blockchains are the digital environments used to trade cryptocurrencies and have the most modern data security protocols – there are no records of cyberattacks to date.
In addition, smart contracts are used, digital documents that manage and execute all obligations defined for the parties of the business.
TOTAL AVAILABILITY
The market for gold tokens never closes! The blockchains where the metal offerings are hosted run without any interruption.
Therefore, buying gold in tokens is available 24/7 and from anywhere in the world, without geographical or legal restrictions.
With so many advantages, investing in tokenized gold will be an alternative that tends to grow in the market, maintaining the attractiveness of gold as an investment and financial protection.
BLOCKBR Digital Assets is a fintech that combines technological innovation and digital knowledge to transform physical assets into digital ones, in the asset tokenization process.
The offer of tokenized physical and financial assets, both current and new, is democratic and decentralized, which makes investing safer, simpler and more efficient.
We enable, structure, issue and offer tokens on our platform and beyond. Be aware that tokens depend on feasibility and regulatory factors.
Do you want to tokenize your business or part of it? Do you have a business solution and does it make sense to issue your own token ?
