When financial markets experience severe crises, gold is one of the only assets to maintain a stable value. It is therefore considered a safe haven. Logically, this tremendous stability pushes many people to acquire gold bars or coins. However, investing in this area sometimes presents risks. This article provides a summary of the key information to have before making an investment in Midas metal.
The value of gold
Before making an appointment with a sales and service specialist repurchase of gold, it is essential to know its value. Like all assets, the value of this metal constantly evolves on financial markets. It is therefore quite difficult to determine the exact amount.
What factors influence the value of gold?
Although gold is considered a safe haven, it still suffers from fluctuations. Like money or oil, its value can be influenced by external factors such as:
- the geopolitical situation;
- the rate of the dollar;
- central bank policies (FED or ECB);
- the fragility of financial markets, etc.
The value of gold can also be influenced by supply and demand. The world's gold reserves are not inexhaustible. According to some experts, all the gold in the world will be mined by 2060. Consequently, the future scarcity of this metal can lead to a significant increase in its value.
However, unlike other assets and precious metals, gold absorbs the consequences linked to these different factors. This is why it is considered the safe haven par excellence.
Gold price ranges
In absolute terms, the value of gold is determined by international financial centers. However, the latter only deal with LBMS certified gold bars with a fineness of 999.9. The price of other gold bars that have a fineness lower than this figure is continually determined by the financial markets.
Therefore, each seller is free to offer a price taking into account the state of the market, supply and demand. This is also why specialists in the sale and exchange of gold offer relatively similar prices.
However, the best prices are generally offered by gold sales or redemption shops. Before investing, take care of yourself find out on a specialized site to know the value of the desired type of gold.
Investment in gold: which option to favor?
The other essential exercise from the perspective of an investment is the choice of the type of gold. Indeed, it is possible to choose between physical gold and paper gold.
Physical gold
The main form of physical gold is commercial gold. This is gold for jewelry (necklace, ring, etc.) or industrial gold. This option is highly recommended when you have a more or less reduced budget. However, this type of gold is subject to VAT. To find some, simply make an appointment with a specialist in buying and selling gold.
That said, the type of gold conducive to a sustainable project is investment gold. This time, it is about gold bars and coins (Napoleon, sovereign, etc.). Obviously, this choice requires a significantly greater investment. This is all the more the case when we know that coins are classified into 3 categories. We distinguish :
- old pieces;
- restamped coins;
- modern rooms.
Old pieces (like the Napoleon) are gold coins that actually circulated at a given time. When they were minted before 1800, they were considered collector's items and saw their value soar.
Re-minted coins (like the Ducat) are coins made recently, but which are perfect imitations of the coins of yesteryear. Naturally, they are less expensive than old parts. Finally, modern coins are gold coins minted recently.
Please note: Old coins are not the only ones to be made of pure gold. Coins of 20 Swiss francs or 20 reichsmarks are interesting options.
Paper gold
Physical gold is clearly the best investment solution. However, this asset may be taxable and requires at least a safe. For people who do not want to take on the hassle, paper gold is an alternative.
Investment in paper gold consists of purchasing a financial product whose value is linked to the real price of gold. In this type of investment, it is not necessary to own physical gold. Therefore, it has more or less significant disadvantages.
On the one hand, it requires the choice of a financial product. It may be a question mining shares, derivative products or cryptocurrencies. However, unless you have solid experience in this type of investment, it is not always easy to make the right choice.
On the other hand, paper gold is significantly less reliable than physical gold. This is partly due to the fact that the investment is made through platforms or intermediaries.
What precautions should you take before investing in gold?
Investing in gold has risks. Of course, the risk of loss is rare. However, it is common to buy gold that is too expensive or to buy gold that is not very pure. To avoid these inconveniences, it is important to take some precautions.
The acquisition of physical gold generates more or less significant costs. Anticipate costs by planning the acquisition price, storage costs and tax costs. Next, find out about gold market prices and compare offers before making a deal.
Furthermore, it is advisable to check legal authorizations resellers and financial investment specialists. Do not hesitate to consult the blacklists in France and Belgium to find out which sites or individuals have a bad reputation.
Additionally, it is important to pay careful attention to the nature of the transaction. In accordance with the law of March 17, 2014 on consumption in France, no transaction related to precious metals must be made in cash. Moreover, the professional is required to record all operations in a police book.
