Here’s How You Can Invest in Gold – Part 2

Last Updated: 13. Dezember 2023By

After learning about the unique characteristics of gold and two ways you can invest in the precious metal (physical gold in coin or bar form and gold mining stocks) yesterday, here is a third investment option for you today.

Investors who want to add a certain variety to their portfolio can use securities that follow the gold price, such as Euwax Gold or Xetra Gold. I have summarized the advantages and disadvantages for you:

Your advantages: The securities are easy and quick to trade and follow the gold price 1:1. They are inexpensive to acquire and do not have to be physically stored at home or in a bank vault. All of this reduces costs.

Your disadvantages: When buying these securities, it is โ€œonlyโ€ an unsecured debt instrument. This is a security that certifies a claim against an issuer.

However, some providers such as Xetra Gold and Euwax Gold buy the gold and then store it physically. Under certain conditions, the gold can then even be delivered to the investor.

Interim conclusion: As a base investment, I recommend physical gold (bars or coins). If you want to bet on the gold price in the short and medium term, easy and inexpensively tradable securities such as Euwax Gold are a good addition. Gold stocks can provide the boost for returns as part of the portfolio.

Gold offers protection against inflation Gold has been a rock in the inflationary surf for centuries. This means that paper money tends to lose value more and more. This development can and will attack your purchasing power if you do not protect yourself.

Although gold is the classic inflation protection, the large investor base does not use this protection. Globally, less than 1% of the money supply is invested in gold.

Widely undiscovered by the general investor base Since the 1970s, global debt has been steadily increasing; currently, global total debt is over $300 trillion. That is many times the global world economic output! And the debt mountain is getting higher from year to year.

The increasing new debt can eventually no longer be financed by investors. Then a new currency system may be the last resort. Given the weakness of paper money, gold’s classic opponent should be trading at a much higher price today. However, in my view, the gold price is artificially suppressed to hide the weakness of paper currencies.

Some large investors can easily influence the gold price – if the mass continues to ignore gold and only a few outsiders buy precious metals. Given the debt development and high inflation, it is surprising that most German savers still hold on to their savings books and fixed or current accounts.