Gold is the best insurance fund for reserve currencies. The reason for its popularity has long been known – reliability. In the event of global economic crises, the early investment of capital in the yellow metal allows you to not only save your money but also significantly increase it.
Ways to invest in gold
There are many ways to invest in gold, and each has its pros and cons. The disadvantages of traditional investments are the high costs inherent in such operations.
Options (main) investment in metal:
- Investment coins (+ commemorative / collection),
- Compulsory medical insurance
- Jewelry and Antiques,
- “Exotic” and indirect options.
If you invest in gold through the purchase of billions, you need to be prepared for the need to pay for their further maintenance, for example, protection, and you need to remember that billions are subject to VAT 18% of the transaction amount upon purchase. Plus, on sale – another 13% of income tax. Total, in order to earn something, the cost of the metal must grow at least above 31%.
Investments in billions are considered to be investments for the long term.
Compulsory medical insurance
You can use anonymized metal accounts – this is a good and reliable option if the main task of the investor is to preserve and protect capital from loss or depreciation. But a tool such as compulsory medical insurance will not allow you to make money on gold in a short time since the bank sets the purchase and sale rate of gold, and the difference between buying and selling is very significant.
MHIs are often compared with a foreign currency deposit. Compulsory medical insurance is not covered by the law on bank deposit insurance
It is possible to replenish an impersonal account by making a wire transfer from another metal account, by depositing precious metals in physical form, by purchasing metal (in an anonymous form) for cash at the bank rate.
In some rare cases, compulsory medical insurance is offered with interest.
The advantage of mandatory medical insurance is the absence of VAT. However, if you close your account, you want to receive the metal in the form of an ingot, and not its cash equivalent, then be prepared to pay the same 18% VAT.
Investment and commemorative coins
There is an option to purchase gold investment coins. These are special coins that are valuable in the amount of precious metal they contain.
Many large banks around the world work with investment coins. In the UK, the leader in this direction is a bank.
Coins are beneficial in the absence of VAT. When selling, we pay 13% of the income tax. It is important to take into account that the purchase and sale of such coins take place at the bank’s internal exchange rate, the delta sometimes amounts to a significant amount, so this is again a tool for long-term investments.
It is also worth noting that banks are very picky about the state of redeemable coins.
It is worth noting that among the precious there are also commemorative – collection coins. Limited edition, artistic value, and high today gold rate in UK. Here, in addition to metal, numismatic value is of importance. You need to invest in such coins with knowledge of the numismatic market.
Jewelry and Antiques
Any jewelry item has a mark-up related to the work of a jeweler, factory mark-up, logistics, etc. to the value of the metal contained in it. If you look at jewelry as an investment directly in metal, then after the purchase you immediately lose up to 50% of the cost.
Yes, it’s very simple: I went to the store and bought it, yes, outwardly – it’s very beautiful and in difficult times it’s easy to implement, but, again, for investing it is not the best option
Exceptions are the work of recognized masters, where there is artistic value and antique products. Usually, over time, the value of such assets increases, but in order to buy the right jewelry, you need knowledge of this market.
Indirect methods include:
- purchase of shares of gold mining companies, for example, Lenzoloto,
- gold futures.
- structural products containing gold mining stocks or other securities associated with gold.
Are gold investments reliable?
It is believed that the safest investments are investments in gold and silver, but how reliable is such an investment?
The pluses include the following factors:
- Investing in gold and other precious metals is not just an asset for speculative trading in the stock markets, but a real product with a specific value. The product, which has always been, is and will be in demand, no matter how critical the situation in the stock markets;
- in cases when the world economic and financial situation worsens, the 22K gold rate of gold does not fall, it always sells well, because it is out of competition regardless of the state of the markets;
- correctly made forecasts and correctly chosen rates almost always guarantee investors success in transactions with precious metals, in addition, they are more prone to appreciation than to falling prices;
- investing in precious metals for the long term is the most reliable and an excellent investment for the future, when the time of retirement age approaches, and also becomes a good foundation for the financial development of your children and grandchildren;
Based on the foregoing, it follows that investing in precious metals is a reliable investment of your funds.