Investment gold is a physical object (coin or bullion) and its storage is an important part of the investment. Although we refrain from making specific recommendations, our advice would be not to neglect this aspect of investments. Typically, the choice comes down to storing in a residence safe, an external safe or a safety deposit box.
Depending on personal preference, the amount of gold held and the level of risk tolerance of each individual investor, the investment in security can vary from nothing at a one-time but potentially higher fee.
In the case of investment gold, small physical items can be very valuable. A 100 g Valcambi gold ingot measures 27 x 47 x 4.50 mm. At the time of writing this article, its price is over 27209.82 RON or 5,500 EUR. Accordingly, their storage does not necessarily require large spaces.
Pros And Cons Of Physical Gold Investment
Investment gold investors enjoy many advantages. Among the most important is that they have exposure to the global spot price of gold for a relatively small and unique premium. This is the reason why its popularity is increasing.
Increased demand is seen globally, and certain markets, including the Balkan Peninsula, have been showing growth trends for years.
Advantages Of Gold For Investment
- Gold for investment is one of the best tools for long-term conservation of purchasing power;
- The purchase is easy, fast and affordable, and the same is true for the sale;
- Gold bars and coins store a large amount of value in a small physical volume;
- In Europe, gold as a physical investment is considered an asset as safe as money;
- Many products in this category are legal tendertoday ;
- Apart from possible shipping and storage costs, there are no additional fees or charges that consumers pay. Thus, the value of the investment does not decrease over time, as it happens in the case of many other instruments;
- Trade in investment gold is exempt from value added tax;
- There is no third party standing between the owner of physical investment gold and his asset – even in the event of force majeure or cataclysm, gold coins and bars are available and can be exchanged for currency or used as such. Thus, investors in investment gold are effectively independent of other institutions – an advantage they cannot obtain from any other asset;
- Because gold bars and coins are available in a wide range of sizes, they offer flexibility, a wide range of options and accessibility both to buy and to eventually sell;
- Gold is known and recognized throughout the world and traded at a clear and predictable price, thus offering holders unlimited options for the use of funds invested in gold, especially in times of need;
- Gold for investment is a very liquid asset – that is, it can be quickly and easily exchanged for other currencies in case of need;
- Allows the preservation of a very large value in a small physical volume;
- Its purchase is anonymous and, up to certain amounts, does not require the mediation of a third party;
- Physical gold is eternal;
- Can be used as a gift;
- PAMP gold coins and bars have an artistic design that adds aesthetic value.
Disadvantages Of Gold For Investment
- Requires a secure storage location – this can be both an advantage and a disadvantage depending on the specific situation and user needs;
- If the coins or bars are damaged, they may not be able to be bought at their investment gold price, but at their scrap gold price. It should be borne in mind that modern coins cannot be damaged, and bars should not be removed from their protective packaging, which often also serves as a certificate of authenticity;
- It is advisable to buy products from a reputable trader with a history on the market, who works directly with the most well-known refineries and mints on the market, because there are also counterfeits;
- Investment gold does not pay dividends, i.e. it is not an instrument that offers a passive yield.
Buying gold for investment brings many benefits to investors, most of which are unique to this asset. It is no coincidence that gold coins and bars have been used as money for millennia. They have remained so until now, being a legal means of payment.