• Customer rating: 4,8
Need help? Call 035 203 1380

Investing in gold

Investing in gold has many different possibilities. However, it is wise to first fully immerse yourself in how such an investment works. The risks of investing in gold depend very much on how you invest in gold. Investing in gold in the right way can actually be extremely suitable for protecting your assets. We would like to explain the different ways of investing, along with the pros and cons.

Investing in gold bars

Investing in gold by buying gold bars is the most common and cheapest option. However, this option becomes particularly interesting if you opt for large gold bars starting from 1 kg. Bars of 12.5kg (400 troy ounces) are the most traded worldwide due to the relatively low additional costs. However, private individuals more often choose gold bars weighing 1 kg or less because they are easier to trade on the private market. A disadvantage of gold bars below 1 kg is the relatively high production costs and profit margin. The lower the weight, the higher the additional costs.

Investing in gold coins

Another attractive form of investing in gold are gold coins. This option is often preferred by individuals because gold coins are very accessible, have a low unit price and can potentially be used as money. The Krugerrand and Maple Leaf coins are popular examples of gold investment coins and have a value of around EUR 1,810 (based on the gold price at the time of writing). However, the exact value depends on the gold price which determines the current gold price . More information on the gold price can be found under the link. The additional cost on gold coins is about 4 to 5% on top of the purchase price. This applies especially to 1 troy ounce coins that consist of pure gold (99.9%). Smaller coins tend to be more expensive due to the higher additional costs. Coins with a lower percentage of gold are less tradable worldwide.

Allocated gold

Allocated gold means that interested parties invest in gold bars from an offering party without physically owning the gold. That is, the buyer buys a percentage of the entire gold deposit. The buyer does not own physical gold but is a co-owner. One advantage of this is that the buyer does not have to worry about transport and storage costs. However, there is also a disadvantage. Namely, the buyer has a counterparty risk. In addition, the provider usually passes on insurance and storage costs to the buyer.
The above three examples are some of the most common forms of investment in gold. However, within the gold world, it is also possible to invest in unallocated gold, ETFs and mining shares. More information on these can be found in the knowledge centre on the ways to invest in gold page.

Buy gold

The benefits of investing in gold

Investing in gold has many benefits. As such, gold has a long history and has demonstrated its benefits more often than not. Gold is a liquid investment. This means that gold is easy to sell. This makes gold a good investment for investors who want quick access to their money. Another feature of gold, is that it is relatively safe from inflation. This feature makes gold a good investment for people who want to protect their assets.

Gold is a stable investment

Gold is often seen as a stable investment because gold has historically maintained its value in times of economic uncertainty. Whether gold is a stable investment depends on several goals. If you are looking for an investment that holds its value relatively speaking, gold could be a good investment.

Performance of gold in recent years

Gold's performance in recent years has been generally positive. Over the past 10 years, the price of gold has risen substantially. There are a number of factors influencing the price of gold, such as;
  • Economy
  • Politics
  • Investment demand
In recent years, there have been a number of factors that have supported the demand for gold, including:
  • Increasing global economic uncertainty: The global economy has become increasingly uncertain in recent years, with an increase in trade wars, the Brexit and political unrest in many parts of the world. This has supported demand for gold as investors look for a safe haven for their assets.
  • Rising inflation: Inflation has increased in recent years, which has eroded the purchasing power of the dollar. This has supported the demand for gold, as gold has kept its value in times of inflation.

Investing in physical gold or paper gold

Investing in gold can be done in several ways.
When you want to invest in gold through physical gold, the gold you buy is actually yours. This means that you are the owner of the gold and can do what you want with it. You can sell your physical gold whenever you want. Also, many people find it reassuring that investing in physical gold is something tangible, without it being stored elsewhere or that they have never seen the investment.
Paper gold, on the other hand, has no owner. You only have a contract with a third party that gives you the right to buy the gold. This third party may also have one large gold bar, which you ''share'' with others. Therefore, the disadvantage of paper gold is that you are dependent on a third party. Often, you will also not be able to see the paper gold, but have only purchased it on paper. An advantage of paper gold, on the other hand, is that you do not have to store it yourself, which is seen as safer for some people.

The return on investing in gold

The return on investing in gold depends on the period you invest in. The return can therefore vary. On average, gold has delivered a return of 8% per year in the past. However, returns are not guaranteed. However, gold has proven to have little or no sensitivity to inflation, making it a good investment to protect your purchasing power.

Frequently Asked Questions About Investing in Gold

Why invest in gold instead of other precious metals?

Gold has a long history and has been a valued precious metal for centuries. Many people trust buying gold for this reason. Additionally, gold is a relatively stable investment. Over the past few years, gold has shown positive trends and is seen as an investment that can protect your purchasing power.

What are important considerations when investing in gold?

Although investing in gold is considered relatively safe, it is always wise to thoroughly educate yourself first. To provide you with the best possible information, we have placed special guides in our knowledge center.

If you need more assistance after reading these articles, you can use our selection guide. By answering a few simple questions, we can create a purchase proposal tailored to your criteria.

Would you prefer personal advice? This is also possible at The Silver Mountain. We are located in Baarn and The Hague. You can schedule an appointment for an introductory conversation at either location.

If you have any more questions or need further assistance, feel free to contact us. We're here to help you make informed decisions about investing in gold.