This is my first opinion written in Binance Feed in an article format, just testing it but also wanting to express my short opinion on gold price volatility, an issue to take into account if you are intending to invest in this particular asset.
One of the common mistakes some starters and non-investing people in general make on gold is to think on it as the most stable commodity in the market. Indeed, it is possible to see that gold uses to show volatility in stock markets, in both spot and futures trading. It happens because of a simple issue in the gold -and general- markets: its expositions to offer and demand law.
In crypto assets markets, it is quite evident that prices are struggling between highs and lows, making markets to be known as highly volatile. However, such volatility is present in other stock products, including Treasury bonds, enterprises shares, debt instruments, etcetera, and even gold experiences volatility as a commodity, the same way oil, coffee, iron and other commodities use to show. Bitcoin ($BTC ) is known for showing a huge volatility as well as most of the altcoins, in opposition to stablecoins which are tied to a currency -USD as the most commonly used and known- or a commodity -gold as the most used in this case. The best example in stablecoins tied to gold is $PAXG , which is available in some of the biggest exchanges and some DEX as well, being also one of the less volatile altcoins in the market today.
The question here is: Is high volatility an exclusive feature in crypto assets? The answers is a crystal-clean no, because gold prices in stock markets jump and dump all the time as well, no matter the prices are watched in Spot and Futures markets, and no matter the format used for gold trading is used -gold as direct commodity, gold in contracts for differences (CFDs) instruments, or gold minted in specific coins like South African Krugerrand which is especially volatile if compared to the above mentioned formats because of its higher liquidity.
So, when watching gold prices through stablecoins tied to gold, it's important to stay vigilant on stock markets as well, because some gold-consuming markets as China and Singapore are devouring tons and tons of this commodity, making its price to rise in a trending bullish market and making markets to behave in very different ways. On the other hand, mining enterprises also uses to sell gold in huge quantities, so its trend tend to change sometimes while gold supply increases in the global market. That makes gold investors to permanently watch gold offers and demands while their own capitals are exposed to this commodity in particular, and also PAXG investors must do the same in order to make a smart investment on gold assets -no matter it is made through TradFi instruments or crypto assets.
