7 Tips For Gold Trading In Africa
goldandlandsadmin October 27, 2022 No Comments
Gold has always been valuable and continues to be one of the most popular investments around the world. The yellow metal is a hedge against inflation and it is an unrivaled store of value. Gold trading refers to buying and selling with careful consideration to trade gold, and in this article I’ll discuss tips to trading gold in Africa.
It can be used for jewelry, kitchenware, electronics, and more. Gold also can be used as collateral for loans. In times of financial turmoil or disaster, gold’s value becomes even more apparent as it has never been worth less than its current price in history so far.
A Brief History of Gold
Gold has been used as a currency since ancient times when the Egyptians first started to use it in jewelry before 500 BC. Gold was accepted as a form of currency because it was seen as a valuable substance that could be used for many purposes.
In addition to being used as jewelry, gold was also seen as an acceptable form of currency for imports and exports by all trading countries that already used it for their own purposes. The stamping of gold and forming it into coins made cross-border trading much easier and gold became widely accepted as a form of currency.
Early Discovery of Gold Trading In Africa
Gold was first used industrially in ancient Egypt around 3100 BCE. Gold was mined from the granite-filled mountains that are found in the eastern part of the country as well as in what once was called Nubia, a region to the south. Slaves were used to mining for gold because so much of it was required for religious and ceremonial purposes, including building temples and adorning the bodies of worshipers.
Gold is often the ultimate prize in Africa, leading to economic inflation and human trafficking. The history of gold in Africa has a long and rich history. In Ghana, many African empires tried to trade with Europe for goods such as guns, cloth, sugar, and tobacco by providing gold in exchange.
West Africa was one of the world’s greatest producers of gold in the Middle Ages. The metal was traded back to antiquity but when camel caravans linked North Africa to the savannah interior, trade really took off. A succession of great African empires rose off the back of this trade as salt, ivory, and slaves were just some of the commodities exchanged for gold that ended up in most southern European gold coinage. Gold attracted unwanted attention and competition as well, with Portuguese explorers the first to exploit West Africa’s coastal resources from the 15th century CE; they were soon followed by others. The discovery of America only gave West Africa a temporary respite from Europeans as their chief source of slaves; these slaves worked on plantations in America for sugar cane crops.
Gold is widely considered an important commodity, as it is used in many products and plays an important role as a form of currency. Most central banks around the world continue to hold large quantities of gold as insurance for the future. The amount of gold kept by these central banks amounts to almost one-fifth of all the gold in circulation.
Read Here: How To Buy Gold Bars?
1. Buy Tangible Gold only
Physical gold is often used by investors for diversification and as a safe haven since it does not affect the value of other assets in your portfolio. It can also be used to protect against banking risks, inflation, the accumulation of government debt, or a reversal of the financial markets.
To buy physical gold in Africa, you don’t need any special skills or expertise. Anyone investing in gold businesses needs to understand that its primary function is to return investment, so you won’t just put money into documents without seeing what assurance they provide. I say this because so many people believe that they own gold on paper.
2. Buy What Can Be Under Your Direct and Unencumbered Ownership
One of the easiest ways most people had lost their wealth is by buying or investing expensively through people who do not trust them like they trust the individuals heading either a company or cooperative. In the sense that, don’t buy gold and keep it where you do have no direct ownership to access it.
Do not store your gold with a company that is not licensed by the state as a security company. This is my advice, to protect yourself and your family in a time of crisis, keep your gold stored nearby where you live so that you can access it quickly.
Make sure you know who you are dealing with when selecting a gold storage company because the gold belongs to you directly. The company cannot pledge it or hedge it.
3. Have An Investment Horizon
Do not consider it as your trading method only, but ensure that you are buying and then storing the gold instead. It will act as your insurance and store your wealth. Gold cannot be printed, and that is why it should be kept in a liquid state. You will want to have easy access to it during a crisis, so carrying around a kilo of it is not practical.
4. Don’t Buy Gold On Credit, Buy with Savings
I doubt if any gold miner/seller would want to sell such an expensive commodity as gold for credit?
Who does that? Because that would be the biggest joke to think you can get gold for free with no cost attached.
Sometimes I get a request from Dubai, Germany, and other countries around the world asking me, Desmond can your sellers from Africa deliver the gold to my country once it arrives we would pay for all expenses incurred. Sometimes I get a request from agents around the world in this business running along with a sick request of a buyer who wants gold with no savings.
Before investing in gold, anyone who wants to buy gold must save first. This is the foundation of a thriving economy. The current system is based on debt, credit, and consumption – the complete opposite of a healthy economy. Do not use the same unhealthy habits that created this system to buy the solution to the problem.
If you choose to invest in gold, use your savings instead of credit and make sure that it is fully yours. Do not speculate to buy gold as you never know what the market is doing and you may have to pay back your credit before the price of gold rises. Use your savings to buy gold so that you can profit from your investments in the future.
5. Store Your Gold in a Safe Jurisdiction
You may want to consider storing some of your gold in a safe jurisdiction where the power of politics is limited and the government has no control over your assets.
6. Store Your Gold Outside the Banking System
Are you are thinking where is the best place to store your gold in Africa? I will say the bank is not the best place to store your gold. Your question is why?
This could be due to the fact the government may want to regulate the system to with her policy may not be healthy for gold sellers. I know you were taught in your early school days the bank is the best place to save valuable assets such as gold.
There are many risks associated with storing gold in the banking system, notably the risk of bankruptcy or government confiscation.
Gold investment is often seen as a way to protect oneself from the risks of financial instability, and to have access to an internationally recognized form of payment in the event of bank closure or temporary disruption (bank holiday).
However, if you keep your gold stored in a bank vault and the bank experiences temporary closure or, worse, goes bankrupt (as was the case in Argentina), you lose the advantage of quick access to a means of payment for your essential needs during a time of crisis, when traditional forms of payment like cash or bank cards may not be available. The risk of bank failure is a serious and real concern.
It might be argued that one could put their gold in a safe deposit box at a bank, but most of the time those are not insured. Besides, during harsh crises in the past, the bank was either closed or didn’t have the amount of gold it claimed to have. This problem started back in the 1980s when banks brought mathematicians into the system who argued that they didn’t need all the gold on hand. They surmised that banks probably only needed 25% on hand. So, banks began to lien out or even sell 75% of their gold. The bottom line is don’t put your gold in the banks. You don’t want to take that risk.
7. Be Compliant With Country Laws When Buying/Trading Gold
There are laws in every business, and gold buying and selling don’t devoid of government laws put in place to regulate gold transactions. However for those who want to invest in physical gold. If you are in a position to make larger purchases, make sure that you follow the laws and that it is declared in that country.
You don t want to play with your life investing on a platform of assumption and being ignorant of what the law state about any particular investment.
You have to be compliant. If you are compliant, it is possible to continue to play by the rules of the game and keep your money from being confiscated.
In Conclusion
Clarity is more important than passion! For clarity, you know what you expect to get results. Gold trading in Africa is highly lucrative when you understand the terminology in trading; with international laws doing business between countries. You don’t want to put your money into a business if you have shallow information about participating.
Therefore, if you aspire to begin the gold business, then take the time to acquire all the knowledge to find your way to the top. Find someone already in the Gold business, so when faced with a critical situation in transacting, you have someone to guide you through their previous lesson.
