Is Gold a Good Investment in Africa?

While forex trading may have become increasingly popular in Africa in the wake of the coronavirus crisis, gold continues to command the attention of traders within the region.

To this end, Africa remains the single most prolific reason when it comes to gold production, mining approximately 853.7 tonnes through 2019 as a whole.

But how viable is gold as an investment in the current climate, and should you look to incorporate this precious metal into your portfolio? Let’s find out!

Is Gold a Good Investment in 2021?

The popularity of gold has certainly soared through 2020 and in the wake of the coronavirus pandemic, as investors have sought flight and look to sink their money into supposed safe-haven assets.

Additionally, the production outlook for gold looks good at present, with this more than capable of meeting fluctuating levels of demand across the globe.

For example, there are currently approximately 201,296 tonnes of gold sitting above the grand, with this boasting a cumulative worth of $12.2 trillion. With regions such as Africa also continuing to mine gold on a frequent basis, this number and value is likely to increase further over time.

Of course, some may argue that the appeal of gold is set to diminish in 2021 and through 2022, particularly with the IMF projecting global GDP growth of 5.2% this year (and 4.9% through the following 12 months).

However, this overlooks the fact that gold can serve as a useful hedge against inflation, with this liable to soar in developed and developing economies following a sustained period of low base interest rates and decreased consumption across the globe.

The recent budget in the UK projected inflation of 4% for the near-term, for example, with this likely to drive up the average cost of living (and commodities) and encourage investors to flock to gold for the foreseeable future.

How to Invest in Gold

If you’re new to the financial market or are looking for a way to invest successfully in gold, your first step should be to access the MetaTrader 4 web trader platform and open a trading account. 

From here, you can trade forex and commodities such as gold, enabling you to speculate on prices and profit without assuming ownership of the underlying asset.

This is ideal given the current economic uncertainty, as tentative growth returns and inflation continues to spike globally.

You can also utilise a demo account through this type of platform and hone your gold trading strategies, enabling you to optimise your chances of success and identify any potential issues before you start trading for real money.

You can also build a viable and diverse portfolio over time through this type of platform, incorporating safe-haven assets such as gold alongside forex, stocks and other types of commodities.