Investing in Gold: A Complete Guide to Buying Gold

Gold is traditionally considered one of the safest ways to protect and grow your finances. In today’s uncertain global and economic situation, investing in gold is becoming increasingly popular. If you are considering this type of investment, this article will provide you with all the important information on how to invest in gold, its advantages and disadvantages, and how to start most effectively.

What will you learn in this article about investing in gold?

• Investing in gold: Advantages and disadvantages
• Is it worth investing in gold today?
• What influences the price of gold
• What forms of gold investment exist
• How to buy investment gold
• Gold investment and taxation

Investing in gold: Advantages and disadvantages

Investing in gold is one of the most traditional forms of wealth protection. For thousands of years, it has served as a store of value that maintains trust even when other assets fluctuate. Especially in times of economic uncertainty, gold can offer stability – which is why many investors see it as a safe haven in a constantly changing world.

Advantages of investing in gold

One of gold’s biggest advantages is its ability to preserve value. While traditional fiat currencies lose value due to inflation and economic problems, gold has historically demonstrated its stability. Many investors therefore consider it an ideal tool for portfolio diversification.

Another important advantage is gold’s liquidity. Unlike some other investments, physical gold can be easily sold on global markets at current market prices. This ease of sale makes gold particularly attractive when quick access to funds is needed.

Gold also provides protection against geopolitical instability. During times of war, political crises, or economic shocks, gold usually becomes a sought-after asset, offering investors a refuge from financial market uncertainty.

An equally important advantage is its long-term growth potential. While gold prices may fluctuate in the short term, over the long term they show consistent growth, which can be attractive for investors with a longer investment horizon.

Disadvantages of investing in gold

Of course, investing in gold also comes with certain disadvantages. One of them is the lack of regular income in the form of dividends or interest. Gold does not provide regular payouts, so its returns are based solely on capital appreciation – that is, the increase in its price over time.

Another disadvantage is the price volatility of gold, which can be significant, especially in the short term. The price of gold is highly sensitive to developments in global markets and may be affected by factors such as central bank monetary policy, current geopolitical events, or the state of the global economy.

In the case of physical gold, there are also costs associated with storage and security. Gold is a valuable asset that must be protected from theft or damage, which can result in additional costs, especially when held in larger quantities.

There is also the risk of counterfeit physical gold. Therefore, it is important to buy gold exclusively from trusted dealers with certificates of authenticity to avoid potential complications.

Despite this, gold remains one of the most attractive options for protecting and diversifying an investment portfolio – if you are prepared to accept its specific risks and long-term value growth potential.

Is it worth investing in gold today?

Many investors ask whether it is still worth investing in gold. The answer mainly depends on your investment horizon and goals. In today’s environment, where many countries face rising inflation and central banks continue to print money, gold is once again emerging as a safe investment.

History repeatedly shows that gold retains its value better than many other assets in times of economic uncertainty. When inflation devalues traditional currencies, gold serves as a reliable store of value because its supply is limited and it cannot be easily produced. Today, we are seeing increased interest from central banks in gold as a reserve asset. This trend supports its price and strengthens investor confidence in its stability and long-term outlook.

It’s also important to consider today’s geopolitical tensions and economic fluctuations, which can negatively affect stocks and bonds. In such times, gold proves its worth as a protective asset that is less sensitive to short-term market swings.

Nevertheless, it’s important to approach gold investing with care. Investors should view gold as part of a diversified portfolio that includes other assets like stocks, bonds, or digital assets.

We can therefore say that investing in gold today is especially worthwhile for investors seeking long-term protection against inflation, stability in uncertain times, and effective portfolio diversification.

What influences the price of gold

The price of gold results from a complex interaction of multiple factors that can cause both short-term and long-term price fluctuations. Key factors include:

Inflation and monetary policy

Gold is traditionally seen as a hedge against inflation. When prices of goods and services rise, investors seek ways to preserve their purchasing power. Central bank monetary policies – especially money printing or low interest rates – tend to support gold price growth.

The chart shows a comparison of gold prices in euros (yellow line) and inflation in the eurozone (blue line) from 2003 to 2024. Over the long term, gold has shown an upward trend, particularly in times of rising inflation.

It is during these times that gold proves its value as a store of wealth. While inflation erodes purchasing power, gold tends to appreciate – helping to offset inflation-driven losses.

Geopolitical tensions

Geopolitical uncertainty, such as wars, political conflicts, or economic sanctions, increases demand for gold. In such periods, investors turn to assets considered safe havens.

Industrial demand for gold

Gold is widely used in industries like electronics, medicine, and jewelry manufacturing. Growing demand in these sectors can drive up its price.

US dollar exchange rate

Gold is typically priced in US dollars. When the dollar weakens, gold becomes cheaper for investors using other currencies – and its price rises accordingly.

What forms of gold investment exist

There are several ways to invest in gold. Each form has its own advantages and disadvantages, so it is important to choose the one that best fits your investment goals and preferences.

Physical gold

The most traditional option is to buy physical gold, such as investment-grade gold bars or coins. This form is ideal for those who prefer direct ownership of the asset. However, it may involve higher costs for security, storage, and potential liquidity issues when selling quickly.

Exchange-traded funds (ETFs)

Gold ETFs are a modern investment option that provides a simple and flexible way to invest. They are traded on stock exchanges like regular shares, offering high liquidity and low transaction costs. The downside is that you don’t own physical gold, only a certificate representing a share.

Gold mining stocks

Another option is to invest in shares of companies engaged in gold mining. This allows you to benefit not only from rising gold prices but also from the success of a specific company. The downside is higher risk due to factors like management, regulations, or environmental issues.

Digital gold

Digital gold combines the benefits of physical ownership with the convenience of digital assets. Investors purchase a digital share of gold stored in secure vaults, which can be easily traded online. This form is ideal for those seeking transparency, ease of access, and no physical storage requirements.

Each of these forms has its specific advantages and disadvantages. It is important to carefully consider your investment goals and preferences to choose the one that suits you best.

TAKE ADVANTAGE OF CRYPTO’S POTENTIAL

How to buy investment gold

Investing in gold offers not only potential protection against inflation, but also long-term stability. To make your purchase safe and effective, it’s important to understand the key steps involved.

1. Choose the form of gold that suits you

First, decide whether you prefer gold bars or coins. Bars are ideal for larger amounts – they usually come with a lower premium per gram. In contrast, gold coins like the Krugerrand, Maple Leaf, or Wiener Philharmoniker are popular for their accessibility, liquidity, and aesthetic value. Many investors prefer them for smaller purchases.

2. Buy only from trusted dealers

Purchase gold exclusively from verified dealers with a solid reputation and clear terms. A reliable dealer will provide a certificate of authenticity and guarantee the appropriate purity (typically 999.9/1000). Ideally, they also offer buy-back options, which increases your future flexibility.

3. Monitor the price – and total costs

Gold prices change daily, so it’s wise to compare offers from multiple sellers. Don’t forget to include additional costs such as delivery, packaging, or certification fees. A good deal is not just about price per gram, but about fair and transparent conditions.

4. Choose a secure payment and delivery method

We recommend paying by bank transfer, especially for larger amounts – it’s safe and traceable. Delivery can be arranged in person at the point of sale or via courier in insured, secure packaging. Always ensure the shipment is trackable and properly insured.

5. Think about secure storage

Gold is not just an investment – it’s a physical asset that needs protection. You can store it in a bank vault or private safety deposit box. If you choose home storage, invest in a certified safe and take out insurance that covers theft, fire, or other risks.

These steps will help you purchase investment gold simply, safely, and efficiently while ensuring its long-term storage.

Gold investment and taxation

Main advantage (VAT)

One of the main benefits of gold is that it is exempt from VAT, unlike other precious metals. In the European Union, trading in gold coins and bars is VAT-exempt. Silver does not enjoy this exemption, though there are exceptions – for example, Norway (part of the European Economic Area) allows VAT-free silver transactions on a bilateral basis. Switzerland also applies a low VAT rate of just 7.7% on silver.

Capital gains tax

Physical holdings of gold and other precious metals are considered capital assets. Profits from their sale are generally subject to capital gains tax. In Slovakia, however, physical gold is exempt from tax if held by a private individual (non-business) for more than five years.

Gold-related ETFs

On the Slovak market, profits from the sale of ETFs linked to gold or gold mining are taxed at a rate of 19% or 25%. However, if the ETF is held for more than one year, the income is exempt from both tax and social contributions.

Gold-backed stablecoins

In the case of gold-backed stablecoins, no time-based tax exemption applies in Slovakia. Any profits are taxed at 19% or 25% and may also be subject to health insurance contributions.

Start investing in digital gold

For centuries, gold has symbolized stability and value preservation. But what if you could own it without a vault, without logistical worries – and yet still physically? That’s what digital gold is about – an innovative form of investing that combines traditional value with the advantages of the digital world.

One of the most trusted forms of digital gold is PAX GOLD – a unique cryptocurrency that directly represents physical gold. Each PAXG token is backed by one troy ounce (31.1 g) of real gold stored in professional vaults in London. In other words: when you own PAXG, you own an actual piece of gold held on your behalf.

This link between token and physical gold is guaranteed by Paxos Trust Company, regulated by U.S. financial authorities. That gives you certainty that each token is backed by real gold – not just a promise or hypothetical value.

With PAX GOLD, you can invest in gold easily and digitally – without the need to buy, transport, or store it physically.

At Fumbi, we offer a simple and secure way to own gold through digital technology. With our platform, you can buy PAX GOLD conveniently, transparently, and without unnecessary complications. You’ll gain access to the benefits gold offers – from inflation protection to long-term stability – without the costs and barriers of traditional investment methods.

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