Background of Gold in AfricaGold is known as a safe-haven asset that is highly sought after by financial institutions and retailers. The precious metal is known for its ability to weather financial storms better than other assets. The Witwatersrand mines in South Africa has more than 40$ of the total gold production in the world.
Majority of gold reserves are stored in military-grade secure institutions and are controlled by various banks and financial institutions. During times of crisis, some foreign entities may put additional pressure on African countries to meet the high demand for gold.
Illicit supplying of gold has become rife alongside gold smuggling. These security risks have negatively affected the gold industry in Africa.
With rumours of a global financial reset, investors are stocking up on gold at an astronomical rate. This puts additional pressure on the gold industry in terms of auditability. In order to protect its precious resources, Africa should be looking to implement blockchain technology. It has the potential to boost the African gold industry and improve economic growth even during the current COVID-19 pandemic. How blockchain tech can change the gold industry
Gold is extracted from mines in Africa and moved out of the country to China, Europe, Russia, the United States and other countries. Unfortunately, issues such as illegal operations are staining the industry. It makes it difficult to curate actual production and flow of gold.
However, auditability is regarded as an effective way of preserving an asset. What better way to implement auditability than with decentralized blockchains?
Blockchains allow global users to verify and authenticate transactions whilst remaining anonymous. The results are transparency on the ledger and validity of asset transfers that occur on the network. Thus, allowing governments or gold mines to manage gold production and their supply chain by validating, tracking and identifying the gold.
How COVID-19 is affecting goldA massive liquidity crisis is currently looming as stocks, bonds and oil took a nose dive. In response, the U.S. Federal Reserve has been printing trillions in dollars to boost the struggling economy. Also, interest rates have been slashed to 0% and quantitative easing measures put in place. It has emerged that the Federal central banking system do not have sufficient gold deposits to cover their liabilities. This could lead to hyperinflation and has sparked a massive drive to gold by public investors. As a result, more corporations and governments may be jumping onto the gold bandwagon and increase the need for auditability.
Where to buy Gold Krugerrands in South AfricaResearch has shown that South Africa is the most expensive place to mine metals such as gold, in the world. The study by GFMS indicated that it costs $1 000 per ounce which is above the global average. The study found that it is mainly due to increasing wages and declining output.
Still, South Africa is home to one of the best investment assets – the Krugerrand. Anyone can buy a Gold Krugerrand. It is internationally recognized as a form of money and is not subjected to VAT. Krugerrands can be stored in a secure facility or fault or at your home.
Being in lockdown should not stop you from making the best financial decisions to secure your family’s future.