In recent months, there has been a lot of talk about investing in gold. The reason for this is the growing interest in purchasing gold bars and coins. In the first half of 2022, the Mint of Poland sold almost 2.4 tons of gold, compared to 1.7 tons sold in the first half of 2021. We are experiencing a real gold rush, so we will give you a few tips on what you need to know before deciding to invest in gold.
Why is investing in gold profitable?
Gold is considered a safe haven. Although its price may fall periodically, it does not lose its value in the long term. Buying gold bars or coins therefore allows us to secure our savings. Let's remember that paper money loses its purchasing power. Just look at our shopping basket. Only a year ago, we could buy much more for the same amount of money than we can today. Meanwhile, one ounce of gold sold several years ago and today will allow us to make a very similar purchase.
Physical gold or paper gold?
We mainly associate investments in gold with the purchase of bars and coins. These assets are referred to as physical gold. You may also come across the term "paper gold" – these are financial instruments whose price depends on the price of the precious metal. This solution is more risky and requires more knowledge. It is recommended for people who are primarily looking to quickly multiply their capital.
However, if our main goal is to secure our future, it is better to choose physical gold, i.e., gold bars and gold coins. It should be remembered, however, that this is a choice for the patient – physical gold is definitely a long-term investment.
Physical gold – what to choose?
Physical gold comes in the form of bars and coins. Among the latter, we can distinguish between collector coins and bullion coins (also known as investment coins). Of course, bars and coins are available in various weights and, consequently, prices. This raises another question: "What to choose?"
It is generally accepted that bullion bars or coins should be purchased for investment purposes. Their price depends solely on the weight of the metal, so all we need to do is determine the budget we want to invest.
Of course, we can choose from a variety of options, but it is best to go for the most well-known bullion coins, i.e., the Canadian Maple Leaf, Australian Kangaroo, Vienna Philharmonic, Krugerrand, and bars weighing up to 100 grams – they will definitely be easier to cash in.
Why are collector coins not the best choice for beginners? Because other aspects also come into play when valuing them. To avoid making mistakes, you need more knowledge and experience.
The price of gold—what influences it?
It is believed that in the long term, the price of gold will rise. This is supported by factors such as its limited resources and rising exploitation costs. However, it should be remembered that there may be periods when gold prices fall – falling inflation, for example, contributes to declines in gold prices. At this point, it should be noted that the price of an ounce of investment gold depends on several factors, including the LBMA Gold Price, which is announced daily in the United Kingdom, and the exchange rate between the US dollar and the Polish zloty.
Investing in gold should therefore be viewed from a long-term perspective, and hasty decisions about exiting the investment should not be made. Sometimes, even a little patience can cause prices to return to an upward trend, allowing us to make a profit.
If you have any further questions about investing in gold, please visit one of our branches or contact our Customer Service Department. Our advisors will answer your questions and advise you on how to best protect your capital.
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