Why invest in gold? Advantages and disadvantages

 Gold has fascinated humans practically since it exists. Since the most remote past it has been considered a precious metal, highly valued in the manufacture of jewelry and ornaments . On the other hand, it has served as a bargaining chip in itself and also as a raw material to mint and give value to different currencies  throughout history.

Today we will see the main advantages and disadvantages of investing in gold today, knowing a little better the position of this raw material in an economic context.

Why invest in gold?

Gold is considered a safe haven value . This means that its price is highly stable, so in times of crisis it maintains most of its value and can even increase it. This is mainly due to two reasons: on the one hand, it is due to the consideration of gold as a precious metal ; on the other, gold is a rare commodity  and its existence on the planet is finite.

These characteristics have made gold one of the most used goods to accumulate wealth, in order to have a security fund to face crisis or economic emergency situations. So much so, that until 1970 the main states of the world backed their monetary systems with the gold reserves stored in their central banks. As of 1971, gold was replaced for this purpose by the US dollar, as well as other safe-haven currencies.

To know if an investment in gold can be attractive for us, nothing better than to know the main advantages and disadvantages of this asset in order to form a well-founded valuation.

Advantages of investing in gold

It is a refuge value

As we have already mentioned, gold has always been considered a safe haven. This means that there will always be a certain degree of demand for gold, which guarantees a corresponding stability in its price. Also, if a state with some economic capacity decides to buy gold to increase its reserves, this can cause its price to rise globally. Not surprisingly, in 2017 gold rose 12%.

It is a finite good

The gold that can be extracted from the planet is limited. It can no longer be created artificially, as happens with the issuance of currency by states in times of crisis. This means that investment in gold is, to some extent, protected against inflation .

Increasing demand

The jewelry industry and the technology industry demand 70% of the gold bullion production worldwide. These are two sectors that are in good health and have sustained growth prospects in the coming years. Although there may be regions of the world where there are local crises, there will always be someone interested in investing in jewelry and technological development elsewhere on the globe, so demand from these sectors is expected to continue.

Gold is less conditioned by political instability than other types of goods and investment products

Gold is gold anywhere in the world, so it does not depend directly on the designs of a specific economic power or a company, as it could happen in the case of investment in currencies or other stock products.

Gold is a universal good

This implies that its liquidity  is maximum: there will always be someone willing to buy. Although this does not mean that we are going to ensure a profitability at the time of sale.

It allows to diversify the investment

Being a security that offers a certain level of investment security, it can be a good complement to balance options that present more risk in our portfolio.

The sale of gold is exempt from paying VAT

As long as it is sell gold bullion with a purity of more than 99.5% or coins with a purity of more than 80%. Now, if we obtain an increase in equity derived from a gold sale, we must reflect it in our income tax return.

Disadvantages of investing in gold

Gold is a valued good

Gold is listed on the commodity market as a precious metal. This means that its price can go up, but it also means that it can go down. Although the price of gold tends to stay high, if we buy at one price and sell at a lower price, we will lose money. As in all investments in stock markets, investing in gold involves a risk, so the profitability of the operation is not assured .

Purchase or investment commissions

Whether we buy physical gold or if we decide to invest in gold through a financial product, we will have to face the profit margins with which advisors and suppliers work.

Pegged to the dollar

Gold is priced in dollars. This means that there is a correlation between the position of the dollar and that of gold in the markets: if the dollar goes down, gold goes up. The problem is that the opposite can also happen, so that the US economy directly influences the price of gold worldwide.

Profit margin on jewelry and coins

If we decide to buy physical gold as an investment, we can do so in the form of certified bullion, certified coins, or jewelry. The best option is the first of the three, since if we buy jewels or coins, the value of the gold used in the production will be added to the price of the manufacture and design of the jewel; or the numismatic value of the coin. In this way, we will get less gold for the same money than if we bought bullion directly.

The price of gold rises when interest rates are low

When the interest rates offered by some savings and investment products are low, investors tend to look to gold as a safe haven. However, this movement influences the price of gold, so we will buy it higher.

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Intermediary companies

The mining companies  specialized in gold mining can stop your activity to manipulate the supply of the metal , in order to increase their price. In the same way, if they decide to buy and invest in gold, they will increase production to buy it down.

Storage problem

The fact that gold concentrates a lot of value in a small space can also be a problem from a security point of view. In this case, the most sensible thing would be to keep our gold in a bank safe or at least take out insurance. This can cause us a series of maintenance costs for the investment.

 

 

Read also:  What is better to invest in investment bullion or gold coins?

 

Should you buy gold?

 

Gold is a yellow precious metal very popular with investors.

Rare, malleable, unalterable, gold has been used for decades as a safe haven.

Existing in different forms (rings, earrings, necklaces, ingots , small ingots , investment gold coins, modern coins, etc.), gold is THE benchmark for precious metals.

Did you already know all of this, but need more information because you would like to invest in gold very soon?

In this article, you will learn...

·         The reasons to buy gold ,

·         The tips and tricks to know before starting to buy gold ,

·         How to buy gold anonymously in United Kingdom,

·         How to protect your investment.

Why buy gold?

The experts of the offer you 5 essential reasons to buy gold:

1: Physical gold is the metal par excellence of goldsmiths.

2: Gold, an attractive capital gain in the medium to long term, retains its value in times of economic crisis or financial instability.

3: Gold allows you to protect your assets and preserve your savings because it is a safe haven, and a safe and low-risk investment.

4: Gold is a precious metal accessible to all budgets. The first investment levels are around 100 Euros!

5: Taxation in United Kingdom is advantageous.

Are you convinced? Would you like to buy physical gold now ?

Know that it is important to think carefully and to know all the information well before embarking on an investment and proceeding to the purchase of gold.

What should you know before buy gold bullion or bullion gold coins?

Before investing in gold, you must know that the value of gold bars or coins is determined by the price of gold . This one is in perpetual motion. It is therefore important to take an interest in it before making any investment.

By browsing our website you will be able to see the live gold price chart . This is regularly updated, in the same way as the prices of the products we offer for sale.

If you have any questions about the price of gold in euros , we invite you to contact our experts recognized in the world of gold and silver trading .

They will respond to all your requests with great precision.

The gold price in live time will soon have no secrets for you!

The purchase of gold in any anonymity is possible?

At the Thegoldbullion, we guarantee total anonymity.

You can come, with complete peace of mind and discretion, to our 100% secure establishment to carry out your transactions.

Professional secrecy is a golden rule!

It's done, you have invested in gold! However, you do not know how to protect it from possible burglaries ...

How to protect your investment?

The Thegoldbullion, located in the heart of the United Kingdom capital, offers its security service.

No more burglary worries, the Thegoldbullion keeps your gold in an insured and secure safe.

You have questions? Would you like to meet one of our experts to learn more about the gold market?

Our experts, specialized in the purchase and sale of precious metals in all forms (ingots, gold and silver coins, jewelry) and currency exchange,.

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They will also present you with a wide choice of quality products at very attractive prices.

 

 

 

 

Gold investment risk - lower than many other investments

 

The precious metal gold is more popular than ever these days. A crisis in the stock market? Just invest in gold! Interest rates too low in the area of ​​fixed and overnight accounts? No problem, with gold bars or Munich you are currently earning significantly more money! At least that's how the presentations read, especially on the portals of many online retailers who concentrate on trading in precious metals. Investors have known that despite all the opportunities, there is definitely a risk associated with gold investments. Because there is not only the way up. Interim price adjustments can also reduce gold investors' profits. Or they lose some money every now and then because the demand for the precious metal drops for a short time.

Invest in time and cash in correctly?

Such situations are part of an investor's life. Interested parties will recognize that, although they need to know the risk of gold investments, they invest less riskily than most other asset classes. No investment is completely risk-free, and that applies not only to buy gold in its various forms, but also to the same extent for real estate, which analysts have repeatedly touted as a safe haven and a worthwhile way of retirement provision. The bottom line is that gold investments are characterized by a comparatively low risk. Fluctuations on the gold market are similar to those that investors are already familiar with in the stock market. The course line has been rising more or less steeply for about a decade.

Historical price developments also show losses

A look at the 1990s, on the other hand, shows that there is no guarantee of profit. Back then, some investors suffered painful losses. In any case, experts advise not to invest all of the savings in gold. As part of its own portfolio, the precious metal is indispensable for many investors - if only to protect against inflation and to hedge against any economic crises. A risk of gold investments is the influence of the economic situation. Only a high level of demand from industry and other branches allows the course to remain at a high level. In bad economic phases with low demand, the price will also decrease.

Compare fees before you start trading

The risk of gold investments in certificates on the precious metal is much higher. Since there is no protection from physical gold in this case, a high speculation risk must be attested. The same applies to the shares of gold mine operators. In general, however, investment professionals assign gold a lower risk than the majority of investment types. Investors generally need to know the buyers' and sales fees of the dealers and the storage costs, since the reserves of a certain size should rather be kept outside your own four walls.

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Saving gold: minimize costs with online providers

 

When it comes to building wealth by buying the precious metal gold, many investors first think of buying physical gold once. Indeed, this is a worthwhile approach when savers are timing the right moment to buy. The fact that they can also save gold by gradually increasing their gold reserves is often forgotten. Gold savings plans and gold-based savings books allow savers to gradually invest money in gold according to their financial means. Most providers can also do this in the form of a regular investment (for example, per month or quarter). In this case, there are regular debits from the reference account, the sums are invested in gold at the current daily rate.

Online depot management reduces running costs

If service providers do not have their own branches, as is usually the case with normal branch banks, this has a positive effect in that companies have to bear lower infrastructure costs. In many cases, these savings will at least partially benefit the customer as a lower deposit fee. Another approach to saving gold is shown in the interest. In many cases, the usual annual interest rates for these savings offers, taking into account the gold price level, are above the level within the classic banking industry. Saving gold is not only worthwhile because customers minimize their costs through online providers. This is one of the reasons why the gold savings plan proves to be an advantage for small investors who could not afford gold investments or could only afford them to a very limited extent.

Saving gold: long-term planning with an adjustment option?

Compared to the normal purchase of gold bars, which can be associated with relatively high fees, especially when they are light, gold saving offers consumers massive savings potential. Investors should know the minimum requirements of potential providers from the online segment. Many operators have terms between 12 and 240 months on the WWW. The minimum monthly deposit is usually in the range of 25 to 50 dollar, which makes saving gold bars interesting for consumers on a budget. Corrections from previous investment practice should be possible at any time.

How well are my gold deposits protected?

Consumers who want to minimize the cost of saving gold through online providers should generally check in which country the company is based. Although the legislator for investment products from the gold sector in the strict sense does not provide for government regulation, the subject of deposit insurance is nevertheless of great importance in a provider comparison. If the gold savings plan fails due to misconduct by the online provider, the savings should be fully secured. Companies from United Kingdom such as gold from Munich-based Trade GmbH are characterized by transparent terms and comprehensive investor protection.

Read Also: Invest in pure gold by buying an investment bar

How to invest in physical gold: the possible alternatives

 

In times of financial turbulence, investing in safe-haven assets becomes one of the safest alternatives also with a view to diversifying one's assets. Allocate part of its financial resources to the purchase of gold or gold coins it is, in recent months, a very "hot" and very topical issue. Those wishing to invest in gold have the possibility to do so in two different ways; the first, a virtual way, is reserved for those who have a more speculative approach to investing and will have at their disposal various financial instruments to turn to on the official market. But when the troubled sea of ​​finance makes its movement felt, for many savers the tangible form of investment becomes the only lifeline to which to anchor their savings. Basically, the private individual who wishes to invest in physical gold can do so by buying gold bars or coins (the most famous are pounds) of gold.

Let's analyze in detail the differences between purchases of physical gold

The gold bars are usually processed within ' crafts jewelry but since 2000 has also allowed private individuals to buy gold bullion that is, not worked in the form of a jewel. The bars can have different weights, but their value per gram tends to increase as the weight decreases due to the production costs that have a greater impact on small ingots. Of course, the bars must have a hallmark that certifies their characteristics and protects both the buyer and the seller. Specialized circuits certify the value of the ingots, but even if they have the advantage of not having problems of deterioration and custody, they have the limit of discouraging their exit by limiting the liquid ability of the investment.

Why do you prefer to buy gold pounds?

The pound , however, are one of the favorite gifts for the birth or of communion of a niece when, faced with the difficulty in finding something to give, you prefer to opt for an asset whose value will last over time . The gold pound is certainly appreciated and known; with a lower unit value than an ingot and therefore more affordable even by those who do not have large amounts to devote to the investment, it presents some points of attention on its evaluation.

 Its value, in fact, depends not only on the weight and purity, therefore on the price of gold in real time, but also from the state of conservation, from the year of minting and whether it is a simple investment gold pound or a numismatic gold pound (i.e. with minting defects or produced in a particular year). All of this makes it a little more difficult to establish the true value of a pound of gold and always requires the advice of a trusted expert. Those wishing to make the purchase of physical gold have the possibility of following two different paths.

The first leads savers directly to an authorized bank counter (not all of them are) and where it is possible to have the maximum and immediate guarantee of security. The second way, on the other hand, leads the investor to turn to a professional gold trader duly registered. Only those with this authorization are authorized to physically sell gold and this solution is equally safe and guaranteed. In completing the purchase, the saver, once ascertained, the guarantee of the same with the examination of the relative certification that determines the purity of the metal will have to carefully examine the incidence of the costs applied both by the bank counter and by professional operators. It goes without saying that, with the same product characteristics and with the same certification, the operator who will offer the purchase at lower additional costs is the one to be preferred.

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How to Investing in 24K gold

Investment gold is considered the safe haven asset par excellence: in fact, its listing is unique all over the world and, unlike currencies, bonds and stock market shares, it does not lose its value even during the worst financial, economic or political crises. . On the contrary, gold is more appreciated during periods of instability precisely because of its characteristics. In fact, in these moments, investors prefer to turn to safe-haven assets rather than classic forms of investment, which are much more exposed to sudden crashes and losses in value. The gold price is determined by the London Billion Market twice a day by comparing the relationship between supply and demand and the global geopolitical, currency and financial situation. So the London Stock Exchange valuation is applied in real time to all markets that trade gold in any form.

It should be borne in mind that the value of the gold metal has a close relationship with that of the dollar as the price is expressed in this currency. However, each country then converts the valuation into its own national currency: for example, in the European Union the formula euro per gram is used. Consequently, when the dollar devalues, the price of gold tends to rise, also due to the effects that this trend has on the financial markets. Conversely, when the US currency strengthens, the price of the yellow metal tends to fall.

For all these reasons, it is necessary to carefully follow the golden fixing trend on the stock exchange when investing in this safe haven asset. At the same time, some measures must be developed to obtain a good profit from these commercial operations. First of all, you have to buy investment gold when the price of the metal is low. So you need to wait for the price to rise to resell the gold. In particular, it is important not to be infected by the frenzy of the markets, buying when the golden fixing is rising at a rapid pace.

Secondly, keep in mind that gold price is a medium to long-term investment: if you opt for this solution, you should not expect to be able to resell it quickly and obtain a good profit. In fact, this safe haven asset is characterized by good long-term stability and great short-term volatility. Precisely due to the fact that the golden fixing is determined twice a debased on such a large number of factors it is easy for the value of gold to rise or fall by a few cents over the course of the same day. However, these are minimal variations, which do not allow obtaining sufficient earnings to make the investment worthwhile. Consequently it is necessary to wait two or three years, sufficient time for the price of gold to rise by tens or even hundreds of dollars per ounce. In fact, in moments of the worst economic crisis, the golden fixing exceeded $ 1,300 per ounce.

When making this type of investment, keep in mind that investment gold is exclusively 24-karat metal. These are very different solutions from classic jewels and goldsmith objects, which instead are in 18-carat alloy. Consequently, it is necessary to contact a professional gold operator, the only figures authorized by law to deal with investment metal. This is found in the form of plates of at least one gram or in ingots of various sizes, so as to be able to satisfy all the requests of investors. Alternatively, you can opt for precious coins similar to investment gold: To find out which businesses you can contact, simply check the appropriate list on the Bank of United Kingdom website, the body responsible for granting this qualification. In most cases it is a metal dealer and all operators must guarantee particular requirements of integrity of staff and members, financial security and transparency.

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