Investments in gold – the basics
Gold is one of the oldest forms of capital holding. Already in antiquity, this metal was treated with special interest. Today it is also one of the most interesting forms of investing funds.
Investment or capital protection?
When we hear about investing in gold, we often think about speculating on its value. It is normal for any investor to want to buy it when it is cheap and sell it when it is expensive. However, gold as such is treated by many investors as a form of capital protection. They assume that almost everything can break down someday. A country’s economy will collapse, and so will its currency. Major armed conflict can also cause currencies to drop significantly. In addition, there is also the irresponsible policy of States that focus on mass printing of money. In such conditions, no currency, not even the dollar or the euro, is a guarantee of security.
It is different with gold. Its quantity is limited and it will not increase significantly in the next few years (which could happen, for example, with the conquest of space). Currently, even if its prices may fluctuate temporarily, it almost never drops below certain values.
Physical or virtual gold?
The answer to this question depends on the perspective of our investment and its purpose. If we want to speculate on the price of gold in the short or medium term, it will definitely be better to do it in some virtual wallet. This is related to the better price we get – for the same money we can buy more of it, and then sell it at a better price.
If we want to protect capital, we should definitely choose physical gold. The best option in this case are gold coins in the most popular variants, such as Canadian Maple Leaf or Australian Kangaroo. Their advantage is the ease of their subsequent disposal. For larger quantities, you can consider buying bars due to the slightly better price-quantity ratio.
As for the differences in the prices of virtual and physical gold, it is as follows. For example, if the price of gold on the stock exchange is USD 1700 per ounce, you can buy a 1-ounce coin for around USD 1775. Physical gold is about 4-5% more expensive. However, it gives confidence. And we can lose virtual gold or access to it for many different reasons.