How to invest in gold – a quick overview

Gold is seen as a tool to protect against inflation, which is a long-term working hypothesis. The price of gold has witnessed prolonged periods of decline, and this scenario should not be ignored, especially since the metal does not have a price specified by supply and demand related to its interest and is similar to any financial asset.

If very few people talked about the bubble in the real estate and equity markets in 2007, hardly anyone would ever talk about a gold bubble today. Most likely, no one will do so until there are continuing signs of an economic recovery.

Perhaps many are looking for opportunities to invest in gold, so we will talk about some of the best and most popular ways to invest in yellow metal.

Investing in physical gold

Investing in bullion

It is helpful for those who think the financial system will collapse and paper money is worthless, or for those who like to enter the basement from time to time and hone their fortunes. Experts do not recommend this type of investment, as it involves storage costs and is more difficult to sell when the owner wants it on the market. Also, pay attention to the bank charges’ rate if you’re going to buy the metal from it because the winnings are usually much lower than the market price.

Investing in gold coins

For experts, the gold value depends on the rarity and year of the issue rather than the actual value of the metal. It’s an exciting investment but equally fluid.

Invest in jewelry

For gold lovers, the added value is reduced with some notable exceptions when pursuing this type of investment.

Investing gold in the financial markets

You have no problem storing the gold because you don’t have it. Additionally, if you expect a price drop, you can invest accordingly.

Gold futures are very popular, as they block only a portion of your money from the spot market. However, you must be prepared to top up if the market does not go in the direction you expected. You do not have to wait long; if you are hoping well, you close your positions and take the profit.

If you contact a broker who also trades in international markets, you can access ETFs. These precious metal funds buy the metal, and in return, they issue shares that are traded and whose market value directly takes over the evolution of the gold price.

Also, on foreign exchanges, you can invest in companies whose activity is metal mining.

When investing in physical metal, you should pay attention to the provisions of the Fiscal Law, which impose certain conditions to exempt investment metal from VAT.

When investing in financial assets with the yellow metal as support, you are only paid a 16% dividend tax when you sell the asset for a profit.

Investing in gold-based financial assets has several advantages over investing in physical metal.

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د. مرهف العطاسي

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