Imagine this situation: when you buy an old house and renovate it, you discover a hiding place behind one of the walls, containing a safe. Inside this safe, there are some old notes, such as the Cruzeiro and Cruzado, as well as some jewelry made of gold . Which of these treasures do you believe still holds value? This is exactly why many investors turn to traditional gold investing. As we will see here, this investment, even today, gives a modern touch to investment portfolios.
Before we move forward and discuss gold investments, it is important to make a distinction:
Productive Investments
These are all assets that produce an essential good or service for society, such as a Small Hydroelectric Plant (PCH) that generates electricity, a plantation that produces its harvest, an automobile industry that manufactures cars or a property that yields rent. The value of these investments derives from their ability to generate returns; the more rent a property provides to its owner, the more valuable it becomes, or the more profitable a company is, the more valuable it will be to its shareholders.
Non-productive investments
They refer to assets that do not generate any tangible good or service, but whose value is based mainly on two forces. The first is its scarcity, that is, the difficulty in producing it, like gold , which exists in limited quantities in nature and cannot be manufactured by man. The second is demand, or the degree of interest and need that this asset arouses in people, such as cryptocurrencies, which are attracting an increasing number of followers every day. These two forces combined – scarcity and demand – determine the asset’s price.
What are the types of investment in gold?
- Purchase of physical gold: it is possible to purchase gold directly from specialized companies and store it according to your preference. However, this method may involve additional costs and risks related to storage, as it may be necessary to rent a physical safe. Due to the increase in violence, it is not advisable to store gold in your home or business.
- Buying gold contracts on the B3 Stock Exchange : The most common way to invest in gold on B3 is through Gold Futures Contracts (OZ), traded on the BOVESPA platform . These contracts represent the obligation to deliver a physical quantity of gold on a predefined future date.
- In specialized brokers: Some securities brokers authorized by the Central Bank offer gold forward contracts , which consist of agreements to buy or sell the metal at a specific price and date.
- Gold investment funds: These funds are offered by investment banks, with gold as the reference asset . However, it is crucial to be cautious, as gold investment funds may contain assets other than gold itself. It is recommended to carefully analyze the portfolio composition and fund allocation rules before investing.
Image: Example of a Gold investment fund from a commercial bank. 
Image: Gold Price over time.
How does the price of Gold vary?
The behavior of gold is often the opposite of that of the market: generally, when the variable income market is rising , the price of gold tends to fall , and when there are signs of crisis or uncertainty, gold tends to rise in value . In recent years, gold has stood out due to the rising equity market, at the same time that we face major threats of crises , especially with geopolitical tensions in areas that produce important commodities, such as oil. This created two opposing forces acting on the price of gold . However, the threat of crisis and inflationary pressures in the American and European markets have led many investment funds to turn to gold as a safe haven.
Image: Gold11 Price x Ibovespa Price - Negative correlation.
What is the advantage of investing in gold?
I like to have a position in gold in my investment portfolio , precisely because gold behaves inversely to the variable market . This means that my portfolio is balanced if there is any fluctuation in the market, as the position in gold tends to appreciate , cushioning the drop in the portfolio's income. Therefore, gold is a resource that adds a degree of sophistication to portfolio management , and creating a gold backing in good times makes difficult times smoother.
As we have seen, gold is a non-producing asset; its value comes from its scarcity and its acceptance by the market. We saw that there are many ways to acquire this precious metal and that the choice will depend on the volume invested . Furthermore, gold is portfolio insurance, reducing gains in times of euphoria, but increasing the margin of safety in difficult times. If, by chance, you are not lucky enough to buy a house with a hidden safe containing gold, at least be aware that even if the gold is in digital format in your wallet, you enjoy the same benefits.
