Gold vs. currencies: KIT Group analysts explain how Ukrainians can save money amid instability

Gold prices in Ukraine are rising almost three times faster than the dollar exchange rate. However, analysts warn that precious metals are not always the best tool for saving money.

This is stated in the review of investment opportunities in an unstable market by "Obozrevatel".

Experts of KIT Group, one of the largest operators of the Ukrainian foreign exchange market, advise Ukrainians to avoid excessive concentration of any assets and focus on diversification.

"Banking metals (in particular, gold) analysts suggest buying for long-term expenses (for example, if you plan to buy an apartment in at least five years or if it is about your own "pension savings")", analysts of KIT Group told journalists. They advised the following proportion for long-term savings with a horizon of at least five years: 50–60% – banking metals, 10–20% – crypto assets, 20–40% – freely convertible currencies, such as the US dollar, euro, British pound, etc.

In the shorter term, for example, for purchases in two to three years, KIT Group experts do not advise betting on gold.

"I just don't see an adequate tool for individuals to invest in gold," confirms Oleksandr Parashchiy, head of the analytical department of Concorde Capital. - If we look at the exchange rates for banking metals offered by banks, we will see that the difference between the purchase and sale price reaches 25-30%. That is, you can conditionally buy for 100, and sell for 70-75. How much does it have to grow to "recoup" its funds?"

As an example, Obozrevatel journalists cite the current gold quotes for individuals of one of the largest banks in Ukraine: you can buy one gram of gold for UAH 5,360, but sell it for UAH 3,960. This difference in exchange rates actually makes this tool extremely unprofitable. Parashchiy reminds that the rapid growth of gold now does not guarantee that it will always happen. On the contrary, the period of growth may soon end.

Therefore, for medium-term savings for expensive purchases, such as cars, real estate and other similar expensive goals, with a horizon of two to three years, KIT Group analysts advise choosing a portfolio of freely convertible currencies and even stablecoins based on them. "Despite the current turbulence in international financial markets, these assets still provide a good balance between liquidity and reliability, which qualitatively distinguishes them from the hryvnia," KIT Group clarified.

Analysts also draw attention to another important detail - the danger of keeping savings at home (even if it is currency) in view of the risks of their loss. First of all, these are security risks: accidents, fires, theft, etc.

"The best choice is to keep funds in bank currency accounts with constant access or in protected bank vaults. Or even in another non-physical form - in currency stablecoins, which can be kept in virtual wallets or deposited at interest on reliable international platforms," KIT Group advised.

Hryvnia instruments remain a controversial way to save money. Bankers assure that now the yield of short-term hryvnia deposits may exceed the official inflation, although they admit that they will not cover the devaluation percentages from deposits. And KIT Group advises to refrain from accumulating hryvnia - to have it only for current expenses and as a small reserve for unforeseen situations.