American software company Palantir Technologies bought $51 million worth of physical gold this month. The company, founded in 2003 with a market value of $50 billion, bought the gold in the form of 100 troy ounce bars. It stores these gold bars in a professional storage facility in the northeast of the United States. The gold is in physical form, as the company says it is able to take possession of the precious metal in short notice. The software company did not comment on the decision to buy gold.
In addition to gold, Palantir also added several stocks to its reserves. For example, it took stakes in ten different companies for a total value of $250 million. The company published this information in their latest report to the Securities and Exchange Commission (SEC). All listed companies in the US disclose their positions to this regulator once every quarter. In this way shareholders know exactly which positions companies hold. These reports also disclosed how Tesla bought $1.5 billion worth of Bitcoin at the end of last year.
Companies move into gold and stocks
We have been seeing more and more reports lately of publicly traded companies adding stocks or cryptocurrencies to their reserves. However, the purchase of physical gold is a new trend. The precious metal is not used as a means of payment, nor does it generate income. Still, large companies may have good reasons to buy gold. For example, money in a bank account does not earn interest these days either. In fact, companies in many countries are already facing negative rates.
Moreover, there are growing concerns about the value of money and the stability of the international monetary system. Governments keep spending money like crazy, while central banks no longer know what to do to stimulate the economy. In this environment of currency deebasement and negative interest rates, large corporations also have to figure out what to do with their money. It is no longer obvious to leave everything in a bank account. Therefore, companies are also looking for alternative investments, such as stocks, gold and crypto currencies.