en
Why bet on gold? It's a timeless investment even in uncertain times
Investments

Why bet on gold? It's a timeless investment even in uncertain times

Details

Date 3. 11. 2022

Category Investments

Share

Golden soul, golden Czech hands or salt over gold... When we want to value something, we usually assign it the value of gold, or at least compare it with gold. And indeed - gold is extremely valuable. So much so, in fact, that in the time mankind has been using it in various ways, its value has never fallen to zero.

In short, investment gold is one of the most stable ways to protect savings from inflation and economic fluctuations.

Gold as an investment: what makes it so special?

Investing in gold is one of the oldest forms of value preservation in human history. Unlike paper currencies, which can succumb to inflation or even lose value entirely, gold has held its value for thousands of years. In recent decades, investment gold has become a sought-after commodity not only for large institutions but also for retail investors looking for a safe haven for their finances.

Perfect in its essence

Since ancient times, people have appreciated the unique properties of this precious metal. It does not corrode, it can be melted on a normal flame, it is chemically resistant, it has a unique and beautiful colour, and it is rare in that there are only limited quantities of it in the world, with fewer and fewer newly discovered deposits. These properties make gold an ideal investment commodity - it is not perishable and its quantity cannot be artificially increased as in the case of printed money.

the top 5 reasons why gold is unique:

  • Chemical stability - it is not subject to oxidation or other degradation processes.
  • Limited global supply - no more gold can be 'printed'.
  • Universal value - recognised worldwide.
  • High liquidity - can be sold quickly almost anywhere.
  • Independence from the banking system - physical gold is not subject to the risks of financial institutions.

Beloved by people for millennia

Gold is the metal we return to when paper money and stocks lose their value. Because of this, it has always had some value and is seen as a kind of insurance against hard times. People see gold as a way to store their wealth and pass it on to the next generation. While the value of a currency can plummet during an economic crisis, gold usually maintains or even strengthens its value.

History has repeatedly shown that in times of economic uncertainty, there is a growing interest in investment gold. During the 2008 financial crisis, the price of gold rose by more than 150% in the following years. A similar trend was seen during the COVID-19 pandemic, when investors sought a safe haven for their funds.

Investment gold bullion: the foundation of every portfolio

Investment gold bullion is the purest form of gold investment. They come in a variety of sizes, from grams to kilograms, allowing each investor to choose according to their financial capabilities. Ingots are typically made from 99.99% pure gold and carry a purity designation, weight and serial number.

Advantages of investment gold bullion

Investment gold bullion is usually sold at a lower premium over the spot price of gold compared to other forms of investment gold. This means you get more gold for your money. Ingots also offer high liquidity - you can sell them virtually anytime, anywhere in the world.

Who are gold bullion bars suitable for?

  • For investors who want to maximise the amount of gold they get for their money.
  • For those who plan to store value for the long term.
  • For investors looking for inflation protection at minimal cost.
  • For those who prefer to physically hold their investments.

Investment gold bars: a symbol of stability and wealth

Investment gold bars, also called 'good delivery' bars, are standardized gold blocks, usually weighing 1 kg or more. These bars are used by central banks, financial institutions and wealthy private investors. They represent the most economical way to own larger quantities of gold due to the lowest processing costs per gram.

The advantages of gold bars for serious investors

Gold bars offer the most cost-effective way to invest in gold in larger quantities. Their standardisation and certification make them easily tradable on international markets. For investors with larger capital, gold bars are an ideal choice to protect a significant portion of assets from economic fluctuations.

Gold investment coins: combining investment and collecting

Unlike bullion coins, investment gold coins often combine investment value with numismatic value. This means that, in addition to the value of the gold contained, they may also have collectible value, which can increase over time independently of the price of gold.

Why consider investing in gold coins?

Investment gold coins are legal tender in their countries of origin and usually carry a face value. Some of the best known are the South African Krugerrand, the American Eagle, the Canadian Maple Leaf and the Australian Kangaroo. These coins are usually produced with a purity of 999/1000 or higher.

Advantages of investment gold coins:

  • Higher appreciation potential due to collectible value.
  • Easy identification of authenticity due to standardized appearance.
  • Smaller denominations allow for more flexible investment management.
  • Often exempt from VAT similar to bullion coins.
  • Aesthetic value associated with historical and cultural significance.
Why bet on gold? It's a timeless investment even in uncertain times

Resistant to economic fluctuations

Gold has historically been seen as an excellent hedge against inflation because its price tends to rise when the cost of living increases. People also see it as a good hedge against deflation. Even as tensions rise in the world, people find gold a safe haven to preserve the value of their assets.

Unlike currencies, which are based on trust in a country's economy and government, gold has an intrinsic value that remains regardless of the political situation. This is why investment gold remains relevant in today's digital world.

Safe and fast in the modern world

Gold retains its strengths even in the modern era. Compared to digital assets, it has an inherent advantage - it is tangible. Hackers have no chance of stealing it from computers or other servers. Gold is also extremely liquid. You can buy and sell it quickly, almost anywhere in the world. This makes it superior to investments in real estate, collectibles or art.

Modern ways to invest in gold

In addition to traditional physical ownership, there are alternative ways to invest in gold:

  • gold ETFs
  • gold-focused mutual funds
  • shares in mining companies
  • gold-backed cryptocurrencies

These methods offer higher liquidity and lower storage costs, but lack the main advantage of physical gold - its independence from the financial system.

For any investor

Almost anyone can invest in gold. Through funds, the precious metal can be acquired in the thousands. But it is also possible to invest in collectible gold coins or to buy gold bars and bullion. It is important to buy from a proven and trustworthy dealer who guarantees the authenticity and quality of the gold.

How do I get started with gold investment?

  1. Set investment goals and a time horizon.
  2. Decide on the form of investment (bars, coins, funds).
  3. Choose a trusted dealer with a good reputation.
  4. Decide on safe storage of gold (home safe, bank safe deposit box).
  5. Monitor the market and consider regular re-purchases to average costs.

Gold as a pillar of financial security?

Investment gold remains one of the safest forms of value preservation in the 21st century. Whether you opt for investment gold bars, bullion or coins, you are adding an element to your portfolio that has proven its value over millennia. In times of economic uncertainty, inflation and geopolitical tensions, gold as an investment is a security you can rely on.