Buying gold has been popular among investors and collectors for years. However, there are periods when its popularity grows much more rapidly, and queues form at gold dealers. What are the reasons for this? Just look at the last few months.
Capital investment
For years, gold bars and gold coins have been considered a safe asset, a so-called safe haven. Buying gold allows you to protect your capital against loss of value and also to earn money. In the long term, the price of gold remains on an upward trend, so if we wait patiently for a few or several years, we will earn money thanks to our current investment.
A deposit for uncertain times
Events in recent years have shown that gold attracts attention in difficult times. A sense of threat increases the desire to protect oneself and one's loved ones, and encourages investment. This was the case with the pandemic, which mainly drove demand for gold last year. Russia's attack on Ukraine was a similar stimulus. It was the war on our eastern border that caused queues to form in front of gold dealers' premises in its first weeks. Many of us wanted to protect ourselves in case war broke out in Poland as well. People bought smaller bars or coins, which in an emergency could serve as money and be exchanged for necessary products. This trend was visible not only in Poland, but throughout Europe.
Fighting inflation
Unlike paper money, gold does not lose its value. It is therefore a good safeguard for our savings in times of rampant inflation. With savings that are losing their purchasing power day by day and are no longer secured even by deposits, we decide to buy bullion in order to later cash in on bars or coins.
Portfolio diversification
The purchase of gold by investors is also one way to diversify their portfolios. Investing savings in various products is a safeguard against capital loss. In this context, gold is seen as a safe haven, i.e., an investment that significantly minimizes risk. Gold bullion coins or gold investment bars are a safe, long-term capital investment.
Collecting
Gold coins have been a valued collector's item for many years. The series issued attract the attention of hobbyists, each new offering gains supporters, and the smaller the edition, the more valuable the coin. Collectors are therefore an important part of the gold market.
Ease of investment
Buying physical gold is a relatively simple way to invest. It does not require extensive knowledge or experience. It is less demanding than trading on the stock market or buying paper gold, i.e., instruments based on the price of gold.
When buying for investment purposes, we don't even have to think about choosing a specific product – if the gold we buy is to secure our capital, we simply choose bars or bullion coins, and the decision is based on the weight of the metal. In the case of investment products, it is the gold content that determines the price.
Remember to stay safe
When buying gold, whether coins or bars, we should first and foremost remember about the security of the purchase. Where we make the transaction is extremely important. Choose only authorized outlets that obtain their products from reliable sources. Preferably from mints affiliated with the LBMA (London Bullion Market Association), an organization that sets and supervises the highest standards on the market.
One such place is Mennica Skarbowa, which cooperates with producers from around the world and whose activities are regulated by foreign exchange law. In 2011, the company was entered by the National Bank of Poland into the register of currency exchange activities in the field of sale and purchase of foreign exchange gold and foreign exchange platinum under number 9571/2011.
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