When and where do I buy gold?

Gold remains topical for every portfolio as a limited commodity of stable value for asset protection (issues: demonetization, debt crisis). We recommend a

3 - 5% share in every portfolio.

There are different ways to invest in gold:

• A precious metal account at a Swiss bank: The advantages are the safekeeping and the flexible handling or tradability. The gold can be delivered physically, whereby it must be clarified in each individual case where the gold is stored. The costs amount to approx. 0.3% per year.
   

• Purchase of gold bars (1g to 1kg) or gold coins (e.g. Krugerrand from 1/10 oz to 1 oz). When buying physical gold, the storage must be considered. Storage in a bank safe is possible, but usually more expensive than the other variants of a gold purchase. The advantage is that the gold bars are physically obtained and basically serve as protection or even as a medium of exchange in times of crisis. However, as a rule, the denomination is too large.
   

• Purchase of gold ETF's (Exchange Traded Funds) via the stock exchange. These are collective assets that grant a right to a portion of physically deposited gold. The advantages are the low price (0.15-0.4%) and the daily tradability on the stock exchange. The disadvantages are the not so easy access to the physically deposited gold. 
   

• Instead of gold, one can also buy gold mining shares (e.g. Barrick Gold, Newmont Mining). With gold mining shares one participates indirectly in the development of gold. The shares can be traded daily on the stock exchange, but usually have a very high volatility (price fluctuations).

   

A general challenge in gold trading is the verification of the origin of the gold. A lot of gold comes from mines that mine under inhumane conditions and also use child labor. However, there are alternatives where such practices can be excluded. We therefore recommend a sustainable gold investment fund. One example is the Swiss Rock Gold Fonds Nachhaltig (CHF/EUR). In this investment fund, gold mining, gold refining and gold trading are subject to strict controls. As a result, gold can only be sourced from a few mines and is therefore slightly more expensive than the cheapest market solutions. The costs amount to around 0.3% per year, which is only marginally higher than with an ETF.

• We advise against buying gold certificates (structured products). They are not recommended because the gold deposit is not always secured.

  Buying gold jewelry and watches is suitable only for collectors and experts, because in this market the price of gold is only a partial component of the total price. Therefore, it is usually the case that the commodity value of a piece of jewelry or a watch is far below the purchase price