THE SAFETY OF GOLD: One of the Oldest Safe Havens.
Gold has been valued by humans for thousands of years. It has been used as currency, jewelry, and decoration. Its historical value makes it a unique investment that is unlikely to lose its allure anytime soon.
Since gold began to be used as a currency in 560 BC, its value has held up over time as it exists in the physical world and has intrinsic value. Unlike paper assets such as stocks and bonds, physical gold cannot be printed or created out of thin air, making it less susceptible to manipulation or fraud. Gold is a finite resource and its supply is relatively limited. As the money supply grows, the relative scarcity of gold means that its value tends to increase. In addition, gold is a globally traded commodity, and its price is influenced by supply and demand factors on a global scale.
Since gold has been around for so long, most investors are fully aware of its investment benefits and gold has become a trusted asset for those looking to preserve their wealth over the long term; to diversify their investment portfolio and reduce overall risk as gold often has a low correlation with other asset classes, such as stocks and bonds, meaning its price movements are relatively independent of these other assets; to protect against inflation because historically gold maintains its purchasing power when inflation occurs since the value of gold tends to rise with inflation, as it is priced in currency; or as a hedge against rare and unpredictable black swan events that can have a significant negative impact on financial markets.
Gold is not subject to bankruptcy, counterparty risk, or default risk. This makes it a safe and secure investment option.
There are also several reasons why individuals may choose to hold physical gold for reasons other than investment:
Jewelry: Gold is a popular material for jewelry due to its durability and lustrous appearance. Many people choose to hold physical gold in the form of jewelry as a personal adornment or as a cultural or religious symbol.
Gifting: Gold is often given as a gift on special occasions such as weddings, birthdays, or religious festivals. In many cultures, gold is seen as a symbol of good fortune, prosperity, and love.
Inheritance: Physical gold may be passed down through generations as a family heirloom or as a way of preserving wealth for future generations.
Collectibles: Some people may choose to hold physical gold in the form of collectible coins or bars. These items can have historical or cultural significance, and may appreciate in value over time.
Industrial uses: Gold has a range of industrial uses, particularly in the electronics industry. It is used in the manufacture of computer chips, smartphones, and other electronic devices.
With its historical value and worldwide appeal, gold is a timeless investment that is worth considering for any investor. The global demand for gold ensures that there is always a market for it.
At the center of the international gold trade
Switzerland has played a significant role in the global gold industry for many years. It is one of the world’s leading gold refining and trading centers, with a long history of expertise in refining and processing precious metals.
The country’s central location in Europe and its political and economic stability have made it an attractive location for companies involved in the gold industry. Switzerland is home to many of the world’s largest refiners, such as Argor-Heraeus, Cendres Métaux, Metalor, PAMP, and Valcambi, which are responsible for refining and processing up to 70% of the gold mined globally every year.
In addition to refining, Switzerland is also a major hub for gold trading and storage. The Swiss banking system has a reputation for confidentiality and security, and many wealthy individuals and institutions choose to store their gold in Swiss vaults.
Furthermore, Switzerland has a strong tradition of gold manufacturing and craftsmanship. Swiss companies are known for producing high-quality gold watches, jewelry, and other luxury goods.
Overall, Switzerland’s role in the gold industry is significant and has helped to shape the global market for this precious metal. Its expertise in refining, trading, and manufacturing gold has made it a leading player in the industry and a trusted partner for safe custody for many companies and individuals around the world.
Various storage options
Investors can hold direct investments in physical gold bars or coins off-balance sheet as segregated assets in a low-risk country in a low-risk bank. As opposed to holding a certificate such as an ETF saying you own gold, holding physical gold in a secure facility is the safest option available to store parts of one’s wealth for many years.
Switzerland has one of the world’s largest gold reserves per capita and is one of the leading countries in terms of offshore gold storage. Gold can be stored in the main vault or a private safe deposit box of a bank. Gold can also be stored outside the banking system, either in a Freeport or at ultra-safe private vaults in Switzerland.
Forms of physical gold
Gold bullion bars: These are rectangular shaped bars that are typically made of 99.99% pure gold, produced by reputable mints and refineries. They come in various sizes ranging from 1 gram to 12.5 kg. The bars are stamped with the weight, purity, and mint mark of the producer and are generally considered to be one of the most cost-effective ways to purchase and hold physical gold.
One advantage of owning bullion bars is that they generally have a lower premium than other forms of physical gold, such as coins or jewelry. This means that investors can purchase larger quantities of gold for a lower overall cost. In addition, bullion bars are easy to store and transport, and their value is easy to verify.
However, there are some drawbacks to owning bullion bars. One is that they can be difficult to sell in small quantities, as many buyers prefer to purchase larger amounts of gold at once. In addition, bullion bars may be subject to taxes or customs duties when being transported across international borders.
Overall, physical gold in the form of bullion bars can be a valuable addition to an investment portfolio for those looking to diversify and protect against market volatility and inflation.
Gold bullion coins: These are coins also made of 99.99% pure gold mostly produced by government mints or private mints and primarily intended for investment purposes. They are available in a range of sizes and weights, from 1/20th of an ounce to 1 ounce or more.
Some of the most popular gold bullion coins include the American Gold Eagle, Canadian Gold Maple Leaf, South African Krugerrand, and Austrian Gold Philharmonic. These coins are recognized worldwide and are easy to buy and sell.
One advantage of owning bullion coins is that they are highly liquid and can be easily sold or traded in the event of an emergency or need for cash. They are also portable and easy to store.
Another advantage of bullion coins is that they often have a face value, which means that they can be used as legal tender in their country of origin. However, the face value of the coin is usually much lower than its actual value based on its gold content.
One disadvantage of owning bullion coins is that they typically have a higher premium than bullion bars, due to the cost of production and the added value of their design and minting. In addition, some coins may be subject to collectible value in addition to their intrinsic gold value, which can make their price more volatile and less predictable.
Costs
The costs of purchasing physical gold bullion bars can vary depending on a number of factors, including the weight and purity of the bar, the current spot price of gold, the premium charged by the dealer or seller, and the delivery location.
The spot price of gold is the current market price for gold, which is set by supply and demand in the global market. Gold bullion bars are priced based on the spot price of gold plus a premium, which covers the costs associated with manufacturing, refining, and distributing the bars. When buying gold from a bank, there is no additional charge for delivery to the banks’ own vaults. Some banks also apply an additional commission to store gold. Delivery to a custom location will come with an extra fee.
The premium charged for gold bullion bars can vary depending on the quantity purchased, the mint or refiner producing the bar, and the dealer or seller involved in the transaction. Typically, the larger the quantity of gold bullion bars purchased, the lower the premium charged per bar.
In addition to the premium, buyers may also be subject to taxes, shipping fees, and other charges depending on their location and the seller’s policies.
Overall, the costs of purchasing physical gold bullion bars can be significant, but they can also provide a valuable hedge against inflation and market volatility. It is important for investors to do their research and compare prices from multiple dealers before making a purchase to ensure they are getting a fair price.
While also subject to the current market price for gold, which is set by supply and demand in the global market plus a premium, which covers the costs associated with manufacturing, refining, and distributing the bars, the costs of purchasing physical gold bullion coins can vary depending on a number of factors, including the weight and purity of the coin. Due to their intricate design, gold bullion coins proof command higher premiums.
In addition to the premium, buyers may also be subject to taxes, shipping fees, and other charges depending on their location and the seller’s policies.
Gold bullion coins may also be subject to collectible value, which can make their price more volatile and less predictable. This value is based on factors such as rarity, historical significance, and condition, and is in addition to the coin’s intrinsic gold value.
Overall, purchasing gold in the form of bullion bars, is the most cost-effective way of buying and storing physical gold. They are also most easy to resell, as they represent the main form of physical gold investment for large institutional investors.
Buying gold
Purchasing physical gold can be done easily and remotely. Once a relationship is set up and a a custodian bank is selected, a purchase order for a defined quantity of gold is placed with the bank. The order is executed and the physical gold securely delivered to their vault or to a specified custom location.
In recent years, fake online gold sales have become a common problem in the gold industry, and buyers should be aware of the risks associated with purchasing gold online. There are several ways that fake online gold sales can occur, including counterfeit products, non-delivery, and phishing schemes.
To avoid falling victim to fake online gold sales, buyers should only buy from reputable sellers who have a proven track record of selling genuine products.
Overall, buyers should exercise caution and use common sense when purchasing gold. If something seems too good to be true or the seller appears untrustworthy, it is best to avoid the transaction altogether.
Anyone who purchases gold bullions bars or coins from a Swiss Bank can be confident that they have undergone extremely rigorous testing before being certified and put up for sale.
Guidance and resources
Working with an independent wealth manager to purchase physical gold is helpful in several ways.
Having expertise in managing investments, including precious metals like gold, they can help investors to understand the benefits and risks of investing in physical gold, as well as how to purchase and store it safely. Staying up-to-date with market trends and fluctuations in the price of gold, the wealth manager provides advice on the best time to buy or sell gold, as well as the amount to invest based on an investor’s financial goals and risk tolerance. They often have connections with reputable dealers who sell physical gold and can help find a trusted dealer who offers fair prices and high-quality gold products. Wealth managers can create a customized investment strategy that includes physical gold based on an investor’s specific financial situation and goals to maximize returns and minimize risk.
Overall, working with a wealth manager can provide the guidance and resources required to invest in physical gold successfully.
Publications are for your information only and are not intended as an offer, promotion, or solicitation to buy or sell any financial instrument or perform any other financial transactions. All information and opinions expressed in the publication reflect current views as of the date of publication and may be liable to change without notice.