Is it worth investing in gold in the bank? Gold has always been considered the most coveted and most requested safe haven asset in the world, especially when going through moments of economic and/or geopolitical crisis.
Buying gold is a very interesting form of investment, which can serve as a shield against inflation, and also as capital protection in the context of a diversified portfolio.
Today we will try to understand how to invest in gold in the bank, seeing the advantages and disadvantages of a similar investment.
Who sells the gold?
We have seen how and how many possibilities there are for investing in gold, but who sells the gold?
The Bank of Italy provides guidelines that explain which subjects are authorized to sell gold, according to article 1, paragraph 1 of Law no. 7 of 17 January 2000.
“A professional gold trader is a person who trades gold on a professional basis, on his own behalf or on behalf of third parties”.
Operators must meet some requirements, which we now see:
- Anyone who trades in gold, both the sale and the purchase, for their own account or third parties in quantities exceeding 1 gram, including gold coins with a purity of at least 900 thousandths and titles;
- Persons or companies who carry out this activity as both a main and a secondary profession;
- Subjects who make a communication to the Bank of Italy, in line with the provisions of article 5 of the UIC Provision of 14 July 2000. In particular, operators who buy gold to carry out artisanal processes are exempt;
- Anyone who trades in gold is subject to compliance with anti-money laundering regulations.
The different forms of investment
But let’s move on to practice: how to materially add gold to your portfolio?
It can be purchased through a gold fund that is traded on the stock exchange, therefore using gold ETFs or even better ETCs.
This is a very interesting way, since the offer of gold ETFs is very wide, and above all, you won’t have to worry about the safekeeping of the gold.
Another possibility of investing in gold is the most classic, ie through the purchase of gold bars or coins. This is the investment in physical gold, which however involves a series of significant problems: you have to pay for insurance, transport, and custody.
You can also invest in gold by betting on mining stocks, thus opting for a stock investment. You just need to pay attention to volatility, because these stocks are often very volatile.
There is also the possibility of investing in gold certificates, i.e. securities that replicate the trend in the price of gold in a much more precise way than mining shares. An investor who decides to invest in certificates, bets on an increase in the price of gold with “long” certificates, while on its decrease with “short” certificates.
The choice of form of investment is very subjective and depends on many different factors, such as the investor’s needs or the function that gold must perform within the portfolio.
