Since yesterday, invest in gold has been seen as a crisis-proof investment. As a result, the precious metal is particularly popular among investors. There are tax benefits as well as a wide range of options to invest in gold. We investigated if purchasing gold makes sense and what factors must be addressed. Moreover, we discuss whether you should purchase gold directly or depend on precious metals in CFDs.
Would you rather have gold bars or gold coins? Where is the most secure location for the costly precious metal? What about the VAT? We will now address these and other concerns.
Where to invest in gold? Our broker comparison:
Forex, Indices, Bonds, ETFs, Commodities, Shares, StoX, ThematiX, Cryptocurrencies
Free access to webinars
Varies according to the account type
CFDs: Crypto, Indices, Forex, Commodities, Shares, Options, ETFs
No internal deposit fee
70 crypto-pairs, 49 forex pairs (usdzar as well), 5 metals, 26 Indices, 130 stocks, 6 oil and gas, 6 agriculture assets
Spreads from 0.00
3% + inactivity fee
1000+ financial instruments, including Foreign Exchange, Commodities, Indices, Share CFDs, Cryptos, ETFs, and Bonds
$3 per side for every 100,000 units
49 global currency pairs, commodities, index CFDs, stock CFDs, ETFs, metals, commodities, energy
1:1 – 30:1
If you have chosen to invest in gold via an Internet service, you should thoroughly investigate the company. It is about a comprehensive pricing statement, safeguarding delivery and data, offering breadth, and much more.
In terms of transparency, you should, of course, always get full information about the supplier. But cost is also an essential consideration. Since not all service providers employ brand-new rates. As a result, as a customer, you should always be wary of being presented with outdated pricing.
At the same time, shipping charges should be provided in an understandable manner so that there are no unpleasant surprises when it comes to the final price. For example, our preferred broker, Plus500, provides a high level of transparency.
All requirements in terms of transparency, security, and other factors are met, in addition to the large selection.
Invest with Plus500
How to Invest in Gold in 2023? Buy Gold in 3 Easy Steps (Guide)
Investing in gold can be a smart financial move, especially in uncertain times. With the advancements in technology, buying gold has become more accessible and convenient. If you’re interested in purchasing gold in 2023, follow these three easy steps to get started.
Step 1: Open an Account with an Online Broker
To begin, you’ll need to open an account with a trusted online broker. Choose a reputable broker that offers gold trading services and has a user-friendly interface. Look for brokers that are well-regulated and have positive customer reviews. Visit the broker’s website and click on the “Open Account” or “Register” button. Fill in the required information, including your name, email address, and contact details. You may also need to provide identification documents as part of the verification process. Once your account is approved, you’ll receive login credentials to access your trading account.
Step 2: Fund Your Account
After successfully registering, it’s time to fund your trading account. Most online brokers offer various payment methods, including bank transfers, credit/debit cards, and e-wallets. Choose the option that suits you best and follow the instructions provided by the broker to transfer money to your trading account. Ensure that you transfer an amount that you are comfortable investing in gold.
In this guide, we recommend using Plus500 as your online broker due to its popularity and comprehensive range of financial instruments. Plus500 provides a user-friendly experience and offers multiple funding options for your convenience.
Step 3: Invest In Gold CFDs
Now that your account is funded, you’re ready to invest in gold. One popular way to invest in gold is through Gold Contracts for Difference (CFDs). CFDs allow you to speculate on the price movements of gold without owning the physical metal. Within your chosen online broker’s platform, locate the gold market or search for “Gold CFDs.” You will find a list of available gold CFDs with their respective prices. Take some time to analyze market trends and consider using the technical analysis tools provided by the broker to make an informed decision.
When you’re ready to make a purchase, select the desired Gold CFD and specify the amount you wish to invest in gold. Double-check the trade details, including the leverage (if applicable) and any associated fees. Once you’re satisfied with your choices, click on the “Buy” or “Trade” button to execute your gold CFD purchase.
What Is Gold?
Gold has been a valuable precious metal since antiquity and has been used as a source of payment since the 6th century. What distinguishes gold is its high resistance to corrosion. It never rusts and is difficult to breakdown, so it is constantly valued. Gold’s value may never completely vanish, making it an excellent investment for people concerned about a currency meltdown.
Valuable metals, such as gold, may provide excellent protection against economic downturns or, for example, the depreciation of the US dollar. Unlike currencies or bonds, which may lose value overnight, precious metals such as gold are constantly in demand.
When and how should you invest in gold in the most popular precious metal?
When Is The Best Time To Invest In Gold?
You may always invest in gold, for example, to protect yourself from financial catastrophes. During the 2007-2009 financial and real estate crises, the price of gold soared by up to 30% while worldwide stock indexes fell by 40%.
From 2009 to 2013, there was a significant increase in the number of people investing in gold. Yet gold is seen as an excellent investment since it is the oldest and most widely used form of payment in the world. During major financial crises such as Black Monday, the Japanese real estate crisis, the Russian financial crisis, or the American real estate and global financial crises from 2007 to 2009, the value of gold lost substantially less than equities.
When the MSCI Global Stock Index lost 46.1 percent of its value between 2007 and 2009, gold dropped about 33.8 percent. If you feel that another financial crisis may occur in the future, gold is a fantastic asset and investment opportunity.
The current gold value: current gold price in US dollars
The chart above depicts the current gold price. Gold is quite popular nowadays, and many people regard it as a smart investment since its price has skyrocketed over the last decade. Check all the commodities prices in Plus500.
Gold Price Forecast
Gold price movements are notoriously difficult to forecast. But, in terms of gold price changes, one may argue that the more unstable the global economy, the more likely the gold price will climb. Despite the fact that the price of gold stayed negative until the end of 2018, both in euros and US dollars, the world economy grew very well.
Moreover, the price of gold often declines as a result of gold derivatives, or gold on paper. In general, physical demand used to determine the price of gold, but virtual gold trading now makes this possible.
Since the demand for gold derivatives is 200 times greater than the demand for gold in the form of bars or coins, physical gold has a minimal effect on gold prices. In truth, several institutions in the United States, such as Goldman Sachs, JP Morgan, and others, use so-called short selling to suppress the price of gold.
Why invest in gold?
Gold bars, unlike coins, are not dated. They are not restricted in their distribution. The purity of gold in today’s standard bars is 999.9. The purity of classic coin gold is 916.66. For strength, the non-gold part is largely copper. Coins with a purity of 999.99 have also been manufactured to make gold a suitable investment.
Gold is an excellent investment for anyone wishing to diversify their portfolio. Gold price movements are independent of the stock and bond markets and have their own rhythm. As a result, gold is a wonderful supplement investment. Moreover, the price of gold is very sensitive to interest rates, so anybody investing should be familiar with the link between the euro, the dollar, and interest rates. In most circumstances, though, gold is measured in dollars.
Since gold does not pay interest, many people prefer to invest in stocks or bonds, which is why gold may be purchased in euros. As the dollar climbs against the euro, the value of gold in euros falls. As an investor, you must exercise caution when the dollar rises against the euro.
Gold as an investment opportunity
While the price of gold varies more than that of equities, it is seen as a superior hedge against crises. It is normally advised to invest no more than 5% to 10% of your money in gold. A troy ounce of gold is now worth roughly 1,155 euros.
The current price of gold per troy ounce is usually provided in US dollars, a holdover from the postwar era when all major currencies and gold were connected to the dollar. Like the prices of many other commodities, supply and demand play a role in the current price of gold.
Whether there is enough gold available to meet demand determines the price of gold. As gold becomes rarer, the price of gold rises as well. As a result, the gold price cannot be predicted with certainty.
Gold strengthens on volatile stock prices
Gold is an excellent investment as an admixture since it does not produce consistent income. Everyone who invests in gold only benefits from increasing gold prices. Investing your own money in gold is often used to increase the value of an investment amid erratic fluctuations. Gold, on the other hand, has no present revenue as a value.
If you’re lucky, you’ll get dividends on stocks and interest on bonds and loans. Dividends are a large part of the overall health of a market or index. If this is missing, as is the case with gold and other commodities, this is, in any case, a negative aspect of the investment.
If you wish to lower your portfolio’s fluctuation range, or volatility, consider adding some gold to a solid stock portfolio. As previously stated, an investment in gold often minimizes portfolio volatility.
Buy gold directly or trade CFDs on precious metals like gold
Gold purchases, according to the Bundesbank’s Finanztip calculation (as of February 1, 2019), provide poorer returns than a well-diversified portfolio. This is mostly due to the fact that gold’s price is more volatile and exhibits less substantial growth than many popular equities.
But when it comes to crisis-proof provision, gold is the most favored precious metal. Because a significant drop in gold is largely seen as improbable. Essentially, the idea is to put a portion of your own money in gold as an investment base.
To have enough money to diversify the portfolio, the investment should be less than 10% of the overall sum.
Some investment items are clearly part of a good portfolio. You may use CFDs from this sector if you want to concentrate on gold as a pure financial commodity in addition to the precious metal in physical form.
It is no longer necessary to acquire gold in its physical form but rather processing options, CFDs, or gold mining shares. With the proper knowledge, using the different financial market tools may be helpful.
Investing in CFDs on the commodity gold is often linked with greater risks. As a result, the odds of winning are greatly increased. The yearly return on gold is increasing at a rate of 3.8 percent on average. It is insufficient to qualify as a long-term investment.
Nonetheless, it’s enough to make the crisis-resistant precious metal an essential part of your personal portfolio. Thus purchasing gold always makes sense if you focus on the numerous other benefits that gold has to offer rather than the potential price rise.
Buy gold comparison: the many ways to buy gold on the stock exchange
We have previously covered gold CFDs. But, there is still more waiting on the stock market that you might employ in the domain of precious metals. There are equities, for example, that attempt to mirror the price of gold. They are often found in the form of ETCs (i.e., Exchange Traded Commodities).
But there is a link to gold in the form of certificates, i.e., speculative papers. There are several ETCs that provide for the actual delivery of gold. Deutsche Bank is a key supplier in this sector.
Yet, with both ETCs and certificates, it is never known if you will get your gold at some point. Is the valuable metal properly safeguarded? In the case of a crisis, how is extradition handled? This sort of gold investment is unsuitable as a reserve for emergencies.
Let’s take a look at the gold ETFs now. These mutual funds are physically backed by gold. This implies that these gold ETFs are also unique investments. There is, however, a catch.
The diversity of an ETF is its most distinguishing feature. If an ETF is only focused on gold, it may be prohibited in several countries. Since July 22, 2013, it has been illegal to merely utilize international stock markets.
Is it worth to buy Gold ETFs?
Where can you buy gold and what should you watch out for when it comes to purity?
Of course, where to purchase gold is an important factor in the gold purchasing comparison. There are essentially two choices. You may purchase gold as a physical commodity from a local source or via an Internet-based marketplace.
The obvious benefit of purchasing on the Internet is that the costs are typically more reasonable. Particularly on sites that are solely dedicated to the customer-oriented selling of gold in different physical forms.
The main benefit of purchasing physical gold directly from a local vendor is that, as long as you stick to the maximum amounts, you can maintain complete anonymity.
Regardless of the manner of purchase, you should always ensure that the purity of the gold is 999.9 thousandths. A certificate, such as one issued by the London Commodities Exchange LBMA, is also useful. Only with this documentation can you be certain that you will obtain the customary market price in the case of a resale.
It is critical that you feel confident in the provider’s professionalism. So, even in the gold market, there are always people who do not take their profession seriously and provide poor items.
To avoid losing track of what is going on, see the list of professional association members. The German coin trading professional organization is a useful starting point for avoiding a fake service. To acquire gold, you usually have to pay in advance, which requires some confidence.
How much can I invest in gold in 2022?
When purchasing gold via ETFs or CFDs, there are almost no restrictions. Nevertheless, the restriction of 2000 euros applies to the moment at which you must identify yourself, and the transaction must be carefully recorded when purchasing actual gold.
Store gold properly
Purchasing gold makes sense, but correctly keeping it is just as crucial. Thus, we commit ourselves to suggestions and tactics for keeping in-demand commodities. A one-kilogram gold bar is still quite tiny and simple to carry.
You also don’t have to worry about secure storage. So a normal, small-format safe is enough for tiny quantities of gold. Gold may also be concealed in various areas around the home and yard.
Another option is to set up a safe or a bank locker at the bank of trust. This has a good side effect since a safe deposit box is seen as a valuable item.
These safe deposit boxes are protected from creditors in the event that the financial institution fails, so there is nothing to be concerned about.
But you should first read the fine print of your house insurance policy. Because it contains information on the quantity of gold acquired and how it is protected in specific storage scenarios.
Gold VS Cryptocurrencies
The cryptocurrency surge is not totally ignoring gold. Gold has often seemed to take a back seat to news since the advent of internet currencies. By the end of 2017, Bitcoin’s value had reached new highs on a daily basis, and several media outlets and platforms had reflected favorably on the cryptocurrency.
The media has mostly ignored gold and its worth. According to the 2018 “In Gold We Trust report,” as of September 2017, “Buy Bitcoin” was searched three times more often on Google than “Buy Gold.”
The increased interest in Bitcoin might be explained by the fact that, like gold, it cannot be manipulated at whim, i.e., it cannot be inflated by a central bank. As a result, it proved to be an equally safe investment. As a result, cryptocurrency may also be thought of as digital gold.
Moreover, gold-backed cryptocurrencies may provide some stability in the realm of online money exchange. Gold and cryptocurrency, both means of payment, are not connected to other parties once obtained. This implies you are not in danger from other parties. Investing in gold, as well as cryptocurrencies such as Bitcoin provides security against negative interest rates.
When the quantity of freshly minted bitcoins is cut in half every four years, the SFR (stock flow ratio) will rise. The rate is the ratio of global yearly gold output (the flow) to the global gold amount (the stock). According to the 2018 In Gold We Trust Study, Bitcoin’s SFR in 2024 will be around 119 years. In 2018, the SFR for gold was 64 years, while the SFR for Bitcoin was 25 years.
Gold now has a market value of roughly $7 trillion, whereas Bitcoin has a market value of “only” $140 billion. Of course, the tendency is rising as life becomes more digital.
The conclusion to invest in gold
What is certain is that gold should be included in every serious portfolio. Diversification is a compelling argument not to overlook this component of portfolio construction. Gold is also an intriguing investment for prospective crisis protection, particularly in conjunction with silver.
When investing in gold, you should consider purchasing from a reliable and recommended source. Because only there can you receive really pure gold with an appropriate certificate, making the investment in the sale enjoyable.
We recommend our test winner, Plus500, as it is also fully regulated and licensed, in addition to having the lowest fees.
Meanwhile, the gold industry provides even more investment possibilities, such as securities, CFDs, and ETFs. Although not directly an investment in the physical nature of the precious metal, they might be a useful addition to a well-diversified portfolio.