Ignacio Sainz Iglesias: "We cannot speak of a gold rush but of feverish episodes"

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At the worst moment of the pandemic, many people feared for their money savings in the bank and that a new crisis like the one caused by subprime mortgages in 2008 would take place and many invested then in gold. VeraCash, a company created in 2015 in the French city of Bordeaux, quadrupled its number of clients to 30,000 in recent months.

“Any individual can buy gold, in VeraCash it is quite simple, you have to register on the platform, fill in a series of information to verify your identity and where you live -this is needed to fight against money laundering-, and once you have validated your token, you can start investing. The client sends his money, we buy gold and put it in his account and from then on he has a number of grams that he can use with his card or with the mobile application, ”explains Sainz Iglesias.

The gold that this Bordeaux company buys for its clients is stored in the free port of Geneva, Switzerland, one of the safest places in the world. "We discourage individuals from having it at home due to the risk of theft since insurance policies do not cover it, we had a complicated episode with a client who wanted to be sent home and buried it in the garden," says the expert .

50% of the world's gold is in the form of jewelry

The United States is the undisputed leader and in the top 10 are powers such as France, Germany, China; and also two international organizations such as the International Monetary Fund and the European Central Bank. But, in addition, there are individuals.

“We must bear in mind that the gold we are talking about is investment gold and only represents 20% of all the gold that has been extracted from the earth, about 200,000 tons. Countries like India or some royal families in the Gulf have a lot of gold in the form of jewelry, 50% of the gold is in jewelry”, explains Sainz Iglesias.

There is a rebound in the price of gold

An ounce of gold is equivalent to 31.1 grams and was quoted in mid-2020 at $2,000, in the midst of a pandemic. Almost an all-time high. It then fell in September before rising again.

“Gold usually marks historical peaks at specific moments, as happened with the subprime crisis or as has happened now with the pandemic. In September there was the crisis of the Chinese real estate company Evergrande and that may have made people imagine a risk that could cause problems in the entire financial system”, says the head of operations at VeraCash.

Currently, the ounce of gold has registered a rebound and is trading at about 1,754 dollars, but for the expert we cannot speak of a gold rush. "Gold always returns when there is geopolitical tension, when there is uncertainty, a big closing, but we cannot speak of a fever, in the end they are feverish episodes within an international situation or context," he clarifies.

The Basel III Accords will change the market

January 1, 2023 is a key date for the gold market because the Basel III agreement comes into force in the United Kingdom, which will directly impact the operation of the Bullion Banks, and it is in London where these are concentrated. banks.

“These are financial reforms whose objective is to avoid problems like there were in 2008 and 2009 with Lehman Brothers. They are going to force the banks to maintain a higher fixed gold reserve than they are required to today. Banks are hedging their positions with part physical gold and part paper gold. There is going to be a higher demand for physical gold and this will theoretically lead to an increase in the price of gold”, concludes Ignacio Sainz Iglesias.

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