Invest in Real Gold Using Cryptocurrency (Plus Advantages/Disadvantages of Gold Investment)

The world’s largest refinery of newly minted
gold, The Perth Mint in Western Australia, has teamed up with a leading precious metals
digitisation company, InfiniGold, and released the world’s first government-sponsored gold
crypto token, the PMGT (the Perth Mint Gold Token). PMGT allows blockchain users to conveniently
trade and hold gold stored at The Perth Mint. How does it work? Well, one PMGT is exchangeable for exactly
one Perth Mint GoldPass certificate. And one GoldPass certificate is exchangeable
for exactly one PMGT. There are no exchange fees. Each certificate is 100% backed with physical
Perth Mint gold stored in its central bank-grade vaults, with the weight and purity of every
ounce guaranteed by the Western Australian Government. Looking at this comparison table with various
other gold investment platforms, we can see that PMGT’s underlying assets are government
guaranteed; There are zero transaction fees; Zero storage and management fees; 24/7 trading;
and PMGT are redeemable for physical gold. Note though, that there is an asterisk there. All that means is that in order to redeem
PMGT for physical gold, you must have a verified GoldPass account with the Perth Mint. GoldPass is an app that can be downloaded
for free on Google Play or the Apple App Store. It was created by The Perth Mint in conjunction
with InfiniGold and allows users to securely buy, sell and transfer physical gold via digital
certificates. If you’re not interested in cryptocurrency,
you could cut out this step all together and just use the GoldPass app. Investors can send gold in real time to other
GoldPass users, or redeem their digital certificates for physical gold or cash at any time. It also allows transactions in either Australian
or US Dollars, making it an excellent option for global investors or those wishing to gain
exposure to gold in US Dollar terms. What is the minimum and maximum investments? The minimum investment is 0.001oz of gold,
which is approximately AU$2.20, or US$1.50. There is no limit on the maximum investment. What about the fees and charges? There is no fee charged on account balances
nor any ongoing management fee. Certificate fees do apply on buy and sell
transactions and vary depending on transaction value. For full details of all fees and charges,
please see Section 7 in our Terms and Conditions. Looking at Section 7, we can see that for
transactions below $10,000, there’s a 1% fee for both buying and selling. As the transaction value increases, the percentage
fee becomes progressively cheaper. There are no transfer fees and no storage
fees. Unless otherwise stated, all fees are inclusive
of any applicable Goods and Services Tax or Value Added Tax. But please read the Terms and Conditions for
yourself to get the full details. Anyway, if you’re interested in investing
in physical gold, GoldPass seems like a great option for the casual investor. Note that I have no affiliation with The Perth
Mint nor InfiniGold, so this is not a paid promotion or anything like that. So how has gold been performing of late? In this chart, we can see that gold prices
have risen by more than 20% over the last six months in Australian Dollar terms, and
by about 15% in US Dollars. Here’s the two-year chart for gold prices
in Australian Dollars — a total increase of 33.09%. So what are the advantages of gold investment? Firstly, gold is a hedge against inflation. Whenever interest rates fall, or more importantly,
inflation rises, investors tend to buy into gold. The same applies for when financial markets
fall. Secondly, gold has strong global market demand. It’s traded all over the world and carries
great cultural significance worldwide, which brings us onto the third advantage — Gold
has intrinsic value. It is used in jewellery throughout many societies,
as well as in dentistry, computers, and electronics. Finally, gold is liquid. That is, gold can easily be converted to cash
whenever you need to. What about the disadvantages? The main one is that gold is not a passive
investment. That is, gold does not pay a yield. Passive investments like stocks or ETFs often
pay a regular dividend, whereas with gold, you can only make money by selling it on the
open market. This may be seen as an advantage for some
investors as capital gains tend to be given preferential tax treatment over ongoing income
from dividends, and interest, etc. Secondly, gold has to be stored. However, this cost seems to be fairly minimal
for the online investor. As we saw before, there are no storage costs
associated with The Perth Mint’s GoldPass or with PMGT. I guess, all the security infrastructure is
already in place and the transaction fees cover any ongoing costs. And the last disadvantage, short-term volatility. Gold prices can be volatile in the short-term
(just like shares), but tend to bear fruit over the long-term. Over the last 45 years, gold has increased
by an average of about 9% per annum. That almost matches the share market and certainly
outperforms other defensive assets like cash and bonds. CEO at The Perth Mint, Richard Hayes, had
these words to say about the new gold cryptocurrency, “People have been able to buy gold for thousands
of years. In recent times in Australia, you could come
to somewhere like The Perth Mint and buy a physical ounce of gold you could lock in your
safe or put under your bed or bury in your back garden to keep it safe. The digitisation of gold via a public ledger
will promote gold as a mainstream investment, enhance its accessibility, and offer greater
liquidity and auditability. It means an ounce of gold can be purchased
very easily, very quickly, with the convenience of a smartphone, without going through all
of the physical transaction side of things. This is a world first in that there is physical
gold that backs every unit and that gold is not only guaranteed by the Government of Western
Australia, but it is also physically stored through our network of central bank-grade
vaults in Perth.” Anyway, that’s it for me. I hope you’ve enjoyed this video. Personally, I don’t currently invest in
gold, but now that it’s becoming so much easier, I may just consider it in the not-too-distant
future. Thanks for watching.

8 thoughts on “Invest in Real Gold Using Cryptocurrency (Plus Advantages/Disadvantages of Gold Investment)”

  1. another advantage to Gold is that banks can't simply press a button & either freeze or confiscate (unlike the money in your account) – ie its outside the banking system. Gold is also immune to negative interest rates….which are coming

  2. so gold is being turned into a digital tokin…so what is a better investment?…or digital tokins?..there are many digital tokins out there….is gold the best one?..maybe..maybe not…but the fact is ..the entire world will be tokinised…..everything…watch……and good vid mate, cheers


  4. government-sponsored gold crypto token —-This IS not as `safe ' as Physical possesion Outside the `system ' good for trading but i'd never commit more than 10% of disposable assets to this –there is after all a `dormant' confiscation bill in the Australian constitution !!!

  5. I am not confident with our governments ability to protect any of my investments. I would rather the actual gold. Not any substitute, digital or otherwise.

  6. Dont forget that under Aus Law you have to pay CGT TAXES on any gains you make on any crypto of any kind or these certificates…or they will send you to jail. Enjoy that red tape.

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