A Guide to Physical Gold as an Investment (Updated 2023)
Physical gold has long been thought of as a safe-haven investment. Over time, it has proven to be particularly resilient to economic downturns and it is a favorite of those looking to diversify their portfolios. As a result, physical gold has grown to become an increasingly popular investment option.
Here are some of the important factors to consider when investing in physical gold:
1. Understand the Different Types of Gold
When investing in physical gold, you have a few different options. Bullion coins and bars are the most popular form of gold, because they are easy to buy, sell, and store. However, there are also collectible gold coins, such as sovereigns, and gold tokens, which are fractional pieces of gold.
2. Learn About Gold Prices
Studying gold prices is an important part of any gold investment strategy. Gold prices are determined by many factors, including global supply and demand, economic and political events, and currency exchange rates. Knowing how these factors affect the price of gold can help you make better investments.
3. Consider Storage Options
One of the most important decisions you’ll make when investing in gold is where to store it. Store it wrong and your investment won’t be secure. Consider safe deposit boxes at banks, home safes, safety deposit boxes, or dedicated safe storage facilities.
4. Be Aware of Fees
When investing in physical gold, be sure to factor in fees such as premiums, storage costs, and other fees which can take a bite out of your profits. For example, storage costs for an unallocated gold account can range from 0.5% to 1.5%.
5. Don’t Overlook the Tax Man
Don’t forget to consider the tax implications of investing in physical gold. While gold buyers are not subject to capital gains taxes, other forms of taxation, such as VAT and estate tax, may be applicable. Check with an accountant or advisor for the latest regulations.
By following these tips, you can ensure that you are well-prepared to make a successful investment in physical gold. With a bit of research, you can also use gold investments to diversify your portfolio and access a new stream of income.