Gold Investments: What you might want to consider
Gold has been of the most important commodities in the history of humanity. Central banks have been adding to their gold holdings, but retail investors are not buying gold at nearly the same rate.
The World Gold Council estimates that retail investment in gold has increased by 15% each year since 2001, with about 40 thousand tonnes of gold owned by retail investors at the end of 2019. While that is a large amount of gold, the current issues that central banks face could drive retail gold demand much higher.
The US is running record deficits, and central banks are adding trillions of USD to the global money supply. As people look for better ways to buy something that has lasting value, gold ownership rates – as well as prices – are likely to rocket higher.
A Lack of Trust Still Exists in the Gold Market
According to the World Gold Council, half of the prospective gold investors find a lack of trust in third parties to be the main barrier of entry to the gold investment world. This is the result of a lack of regulation for different gold products.
From the type of gold products to its management, knowing what you are doing when investing in retail gold is essential to make the right decision and maximize your profit opportunities while avoiding losses due to a lack of information.
While investment options like stocks, property, and cryptocurrencies have become increasingly popular, gold remains one of the most stable forms of investment as a hedge to fist currency weakness.
If you are looking for a way to divest some of your fiat assets into stable money – we can help. At Liemeta we can ensure that you will buy the best gold and silver products in the market, no matter what kind of form factor you are interested in buying.
Please give us a call to learn more, or look at the information on our website.
We know how to deliver the best and want our clients to have the kind of safety that only precious metals can provide.
Choosing the Right Type of Gold Products
Investors who are not familiar with gold, and even those who are, might not be aware of all the different options that exist when investing in gold. Each kind of gold will have its own benefits, and it is worth considering your options before you buy.
There are the classic gold bars/coins which are known as Bullion gold. These gold bars and coins vary in sizes, which determine their value of depending on the gold content.
Collectible and Numismatic coins, on the other hand, are not considered bullion gold due to the added value that their scarcity and design providers, which is usually of importance to collectors in the same way of works of art or antiquities do.
While they are good investment options, they require a high degree of expertise and complexity that adds an extra layer of difficulty in owning these items.
Gold Jewellery is another popular alternative when it comes to smaller retail gold investment.
To be considered a valid gold investment product the jewellery must be highly pure as this is the main aspect providing it value, with any other unique properties providing extra value. Just like numismatic coins, this type of product adds another layer of expertise to the trading.
The added complexity of Gold jewellery and collectibles make them more complex than bullion gold, also increasing its volatility and risks. While there are gold investment alternatives that do not require the physical possession, most investors agree that you do not really own your gold if you do not hold it.
Different Fees for Different Products
One thing that new investors do not look at when selecting a gold product to invest in is the fees and costs that they will incur in by acquiring and maintaining them.
From transaction to storage fees, all of these should be kept in mind at the time of acquiring gold, looking at different options and the benefits they offer when it comes to safeguarding your investment. That does not mean that the option with the lowest costs is always the best one. The Gold investor needs to analyse the value for money.
As investment jewellery and collectibles require a degree of expertise that will prevent most investors from acquiring them, we will focus on bullion gold for now.
One of the advantages of bullion bars and coins is that they are exempt of Value-added Tax in a lot of jurisdictions, so it is important to understand any taxation issues you may face.
Bullion gold has some of the lowest premiums of any gold product, which also decreases as the size increases and is driven primarily by the melt value of the coins or bars. Bullion gold investors typically prefer gold in form of one-kilogramme bars, as their premium is lower than the premium for smaller bars.
The benchmark for gold prices is mainly defined by London’s over-the-counter market, the US futures market, and the Chinese Gold market, as they represent 90% of the global market when it comes to trading volume.
Make Your Money Work in the Precious Metals Market
While it is possible for investors to hold their gold themselves in their home or office, it is not recommended due to the risks involved.
This is why most investors will make use of professional storage services that provide security and ease of mind by safekeeping the assets with top-notch security and ease of access to owners, often preferring high-security private vaults.
These services are usually charged on an annual basis with the fees calculated based on a percentage of the value of the gold that is being stored, on a daily basis. It is important to be aware of any other costs you might incur on for using them as services like delivery could not be included. Such other costs could be an insurance fee, which might be included in the storage fee, or not. It is also advisable to compare the coverage of insurances.
Gold bullions stored with accredited vaults may also be used as collateral for Lombard loans. Lombard loans are loans that are secured with physical valuables, such as physical gold, for example.
If you want to learn more about gold or silver, please contact us. The price of gold and silver has been rising over the course of 2020, and this is probably a good time to enter the precious metals market. You can learn more about what we offer on our website or call us directly on +357 222 72 320. Or you may contact us through the below contact form.
We do not offer investment advice:
This information is provided solely for general information and educational purposes. It is not, and should not be construed as, an offer to buy or sell, or as a solicitation of an offer to buy or sell, or as investment advice in general.