Buy or trade gold: Great guide
Whenever there is talk of stable means of payment that are also supposed to be crisis-proof, the topic of gold comes up very quickly in many discussions. It is true that gold is also subject to fluctuations - but in times of crisis, gold usually increases in value quickly, because people are then looking for a safe haven.
If financial experts are to be believed, we are currently heading for the next crisis. Indicators for this are a weakening global economy, geopolitical crises (China - USA) and economic sectors burdened by climate concerns (e.g. the German automotive industry).
In recent months, more people have been looking to buy gold than they have in many years.
We have therefore prepared a great guide to clarify all open questions and provide the best tips on the subject. Here's how: Buy gold.
What is gold?
First things first: What is gold actually about?
Gold belongs with silver to the precious metals. For thousands of years, gold has been produced for the manufacture of jewelry and means of payment.
The precious metal has always been regarded as a means of payment - but today it is primarily a store of value.
Since gold is limited by nature, it has always had a very high value. Compared to other metals, it is also very difficult to obtain large quantities of gold. Gold deposits are rather scarce worldwide. With other methods (such as gold panning) you can only get comparatively small amounts of gold.
Furthermore, it should be mentioned that gold does not rust. It is generally very robust and cannot be dissolved as easily by chemical processes as is the case with other metals.
Since gold is an excellent conductor of electromagnetic pulses, gold is used in microchips and fine electronics.
Buy gold: Why is gold so popular in the first place?
If gold was so popular in the past mainly because of its shiny and noble surface, today it is because of the stable value.
There are constant ups and downs in the economy.
Good economic times are always followed - sometimes sooner, sometimes later - by a recession. The value of many currencies collapses and stock bubbles burst.
This is precisely when people look for safe investment opportunities. In other words, options to secure their own assets.
What could be more suitable than gold: The precious metal has proven very often in the past that it retains its value in the long term. In short-term periods, however, there may very well be swings.
Who determines the price of gold?
As with other things, the price of gold is determined by the market.
The London Bullion Market has been responsible for this for several centuries. There are several meetings here where the gold price is regularly fixed (gold fixing).
The price of gold is greatly influenced by the prices of other important trading assets, such as oil or the U.S. dollar.
In addition, it should not be forgotten that about 20% of the total amount of gold that exists in the world is owned by national banks. This gives national banks (e.g. the ECB) the ability to directly influence the price of gold.
Gold as Lifeboat?
Can gold be seen as protection against a crash?
It is very difficult to predict what will happen in the event of a crash. What is certain is that many people will lose their jobs and you will suddenly find yourself in front of closed banks.
In Venezuela, for example, hyperinflation has been occurring since 2013. In 2016, the inflation rate was already 800 percent, and in 2018 it was a staggering 80,000%. The population started to trade with other currencies, as the Venezuelan currency lost more and more of its value.
If such a financial crash were to occur on a global scale, more and more people would rely on tangible assets - and that includes gold.
The thesis that gold is crisis-proof is supported by the fact that it is inherently limited. It is therefore very unlikely that the price of gold will suddenly sink "into the bottomless pit". However, it is not impossible, of course. Between 1980 and 2000, for example, there were also sharp falls in the price of gold.
The fact is that the price of gold rises in times of crisis. However, everyone must decide for themselves whether it is worth investing in gold now.
4 Possibilities of the Gold purchase
1. Gold bars buy
Gold bars can be purchased safely and easily from one of the many suppliers.
Either you go to a physical store (of which there are quite a few in Austria and especially Vienna) or you order online.
Delivery times are within acceptable limits - especially if the gold bar is shipped directly from Austria or Germany.
It is interesting to note that gold bars are tax exempt. If they have a weight accepted in the gold market and the gold fineness is 99.5% or more, there is no VAT.
When buying gold bars, it is important that the price is in line with the current gold price and that the seller does not add too much "sales commission". In addition, you can buy up to a price of 10,000? Buy gold in Austria completely anonymously.
2. Bullion coins buy
As "bullion coins" are called special gold coins, which must meet some requirements.
Bullion coins must have a fineness of at least 900/1000 and their minting must have taken place after the year 1800.
Among the most popular bullion coins is the Krugerrand gold coin. It is minted in South Africa and is particularly suitable for beginners.
Other recommended bullion coins are the Maple Leaf from Canada and the Kangaroo gold coin from Australia.
For those who want to have an Austrian gold coin is suitable for the Vienna Philharmonic Orchestra.
3. Mining Stocks
If you want to profit from the gold rush without owning your own gold pieces, you can invest in one of the many mining stocks.
These are shares that belong to specific mining companies.
The largest mining stocks are:
- Newmont Goldcorp
- Barrick Gold
- Freeport McMoRan
For trading we recommend the Austrian online broker Flatex.
Gold mining companies benefit from economic downturns because then their main product (gold) increases in value. Nowadays, gold miners are no longer individuals, but large companies that search for gold with huge machines and take full advantage of their rights to dig for gold.
However, before buying a share in a mining company, you should find out more about its other business areas.
Although we have already mentioned above that gold is not very suitable for speculation, this is exactly what gold securities are used for.
They can be bought and sold quickly and are thus more flexible than classic gold bars.
So gold securities make sense if you don't want to hold the position for years and need flexibility.
Where can I store my gold?
Ok: The first gold bar or coin is bought. Where can I store it now without having to worry about it?
If you want to store your gold away from home, you can do so in any conventional safe deposit box. Banks are usually very well secured and safe deposit boxes offer a high level of security.
If you don't trust it all that much, you can of course store the gold at home.
At home, the gold should be stored in a safe. Safes are either so heavy that they can not be taken (over 600 kg) or you attach the safe to the wall.
Another safe option is to use hiding places in the house that only you know about. However, these should not be conventional hiding places, but rather places that do not immediately catch the eye of a thief.
Conclusion: Buy gold
This guide has provided a good overview of why gold is so popular, who determines the price of gold, and how to invest in gold yourself.
Gold is an investment medium with stable value, and we expect it to remain so in the future.
If you believe the crash and crisis prophets, real assets will be much more important in the 2020s than currencies or securities. Of course, we cannot predict exactly what will happen.
If you want to be on the safe side, you buy gold in physical form and store it either at home or in a safe deposit box.
How to make money with conventional shares, we explain here.
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