Throughout the centuries, gold has always been considered one of the safest types of investment. This shining metal has remained a stable one as it has been able to maintain its value through market volatility and it serves as a good hedge against inflation and economic uncertainty. But, as we progress well into the 21st century, how people invest in gold is also changing rapidly. With the developments in technology, there are now modern and unforeseen tools, platforms, and strategies which are changing the outlook of gold investment. In this article, we will explain the different ways technology is affecting gold investment, some main trends, and what the future of gold investments will be.
The traditional gold investment landscape
To begin with, one must first understand how gold is traditionally invested in before diving into the technological aspects. Previously investors used to purchase gold in its physical form (bullion, coins or jewellery). One of the other popular options was to buy gold mining stocks or exchange-traded funds (ETFs) that track the price of gold.
However, like the majority of industries, technological progress has transformed the way people invest. While gold is still in value, the entry barriers and the way investors are taking an approach to the market are changing because of these innovations.
Role of technology in changing gold investments
The gold investment world is undergoing a profound transformation due to technology. There are lots of new, more efficient tools being added or replacing many traditional ways of investing. Here are some of the futures of gold investment technology trends.
Digital gold investment platforms
A digital gold investment platform is one of the largest technological advancements in the gold investment space. With the help of these platforms, investors can buy, sell, and store gold in digital form. In other words, this simply means that the investor now owns a digital representation of gold, which is fully backed by real, physical bullion.
Investing in gold is possible in some platforms and you can purchase as little as a fraction of a gram of gold in them. This innovation was made possible thanks to popular platforms like GoldMoney and Vaultoro that gave its users the power to buy, store and trade gold on their website or mobile app. It is a simple, cheap, and perfect way for people who want to invest in gold and do not want to care about storage, security, or liquidity issues. Below are the digital gold platforms key benefits:
- Physical obstacles
Investing in gold is accessible; anybody with an internet connection can invest in gold.
- Low capital requirements
It is possible to invest in digital gold even with a small amount of money; many digital gold platforms enable investment in fractions of an ounce of gold.
- Regulatory oversight
Digital gold platforms are regulated by various authorities that ensure one’s investment is safeguarded.
- Buying and selling gold
It is so convenient as you are not required to visit a physical place or store to buy or sell.
The fact that these platforms give the best gold IRA services, meaning that investors can diversify their retirement portfolio into precious metals such as gold while the investments are put into an IRA account, is a major benefit.
Gold investment automation
The process of investing in gold has historically been done by hand. But suddenly this game had changed. Gold investment automation is defined as gold trading via robo-advisors, robots, and other technology without any human interference.
Gold investment with robo advisers is the automated process of buying and selling gold by investors on their behalf. These trading platforms would analyze your market data, chart the trends, and make trades based on predetermined parameters, helping the person invest in gold without having any knowledge about the market. In the next point, we’ll discuss the benefits related to this data.
- Fact-based decision
The algorithms can process a large amount of data to make better and faster decisions.
- Lower fees
While their management fees may be the same or a little higher than traditional advisors, the actual amount of fees that are taken by these systems is lower.
In addition, automation can also save time spent on watching the market the whole day as you will not need to constantly monitor the market.
The role of big data in gold investing
Big data has changed the face of nearly every industry, one of which is in gold. For gold investments, big data is very powerful as it helps the investors to track trends, forecast the changes in the market and make their decisions better.
What is big data and how does it help in gold investing?
Big data is a term for large data, including much data attributed to various sources like market trends, geopolitical news, weather forecasts and more. Investors can use this data to determine when is the best time to invest in the gold.
For instance, it allows analysts to project how global events (for instance, instability in politics or natural disasters) affect the price of gold based on the data patterns. This data can be used by gold investors to make strategic, data-driven decisions on the spot.
How Gold Prices are Influenced by Big Data
- Market prediction
A large amount of financial and economic data is analyzed by analysts to predict future price trends of gold so that investors can have a competitive edge.
- Big data algorithms
Looking at social media, news outlets and financial reports can tell market sentiment and then how it will affect gold prices based on that public perception.
Technology is changing gold investments
Gold investments are changing in multiple ways with the help of technology. In addition to the platforms and automation tools described earlier, blockchain technology, machine learning and artificial intelligence are all having an effect on the gold market.
Blockchain technology
Cryptocurrencies like Bitcoin and blockchain are also making their way into the world of gold investment with technology. Blockchain provides a secure, transparent and tamper-proof way of tracking ownership of gold. Several companies are now using blockchain to tokenize gold and then enable investors to buy and sell the gold through blockchain platforms.
However, by tokenizing gold, investors can get a small amount of gold bar or gold coin for a token making it easier to own and trade. That’s because blockchain also provides transparency and ensures the authenticity of the gold traded.
Machine learning and AI
Gold investments are being subjected to machine learning and AI to use predictive analytics. In algorithm, historical market data is examined, and it predicts how the price will change. With AI, investors can enhance better and more informed decisions and reduce financial errors by humans.
Conclusion
With the increase in progress of the trading platform, so will more and more advanced trading platforms will be developed, and the investing will be practically automated and other smart tools to analyze the data to even a personalized investment strategy. Therefore, taking into consideration the growing gold investment platforms and automation tools, it’s possible to invest in gold, even for those who are not rich or have little or no experience in the investment of gold. It could also be a more modern future of investing in gold through a gold-backed cryptocurrency, tokenized gold.
