The markets are fluctuating, inflation is rising and savings are continuously losing value. Many investors are looking for an investment that can withstand crises and retain its value in the long term.

For centuries, gold has been considered a safe haven for wealth. Whether in times of economic uncertainty, high inflation or turbulent financial markets - gold has proven itself time and again as a stable investment. But what is the best way to invest in gold? In this blog article, we take a look at the various possibilities and show which options are particularly worthwhile for investors.

Why is it worth investing in gold?

There are numerous reasons why investing in gold can make sense:

• Value protection and inflation protection: Gold is considered a safe haven in times of economic uncertainty, as its value usually remains stable, while other asset classes such as shares can fluctuate. In times of high inflation, it offers additional protection, as the value of gold often rises when the purchasing power of currencies falls.
• Diversification and risk protection: Gold generally correlates only weakly with other asset classes such as equities or bonds. It therefore helps to increase diversification in the portfolio and thus reduce risk.
• Long-term appreciation: Gold has shown a stable performance over long periods of time. It is an attractive option for investors who are looking for continuous growth and value preservation.
• Independence from fiat currencies: Gold is not tied to a government or currency, which makes it a globally accepted store of value.

Opportunities to invest in gold

Physical gold in the form of gold bars

One of the most traditional and direct ways to invest in gold is to buy gold bars. This form of investment provides a high degree of security and control for many investors. Gold bars are available in various sizes and can be purchased from banks, precious metal dealers or specialized providers. One advantage of this type of investment is that it is independent of banks or financial institutions, which is particularly attractive for some investors in times of economic uncertainty. However, the costs of storage and insurance must also be taken into account in order to protect the investment.

Advantages at a glance:

• Physical ownership: Physical gold belongs to you directly and can be withdrawn or used at any time.
• Independence: There is no dependence on digital systems or financial institutions, such as electronic exchanges or digital trading platforms.
• Durability: Gold retains its substance and quality for generations.

Gold ETCs

Gold ETCs (Exchange Traded Commodities) are financial products that enable investors to invest indirectly in gold without having to buy or store the physical metal.  

Gold ETCs are exchange-traded debt securities that track the price of gold. The structure of a gold ETC can vary, but essentially the issuer of the ETC buys physical gold and holds it in a secure vault. Investors buy units of the ETC that track the price of gold. The issuer has an obligation to repay the value of the gold to the investor when they sell the ETC. The investor therefore does not receive shares in a fund, but a claim to the gold held by the issuer.

Advantages at a glance:

• Simplicity: Gold ETCs are an easy way to invest in gold without having to worry about physical storage or insurance.
• Easily tradable: Gold ETCs allow investors to adjust their investment at any time, whether through buying, selling or different trading strategies.
• Liquidity: As gold ETCs are traded on the stock exchange, they are highly liquid and can be bought or sold easily at any time.
• Cost-effective: Gold ETCs are often cost-effective as they have low management fees, do not require storage or insurance and can be traded on the stock exchange without high transaction costs.
• Tradable in small denominations: Unlike gold bars, where small denominations are much more expensive, gold ETCs can be traded in small quantities without incurring additional costs.

There are other ways to invest in gold, such as gold mining shares, options or futures. However, gold mining stocks and most options do not have a direct 1:1 relationship with the price of gold, which is influenced by additional factors such as company performance or general market conditions. Futures are also unsuitable for most investors due to their complexity, leverage and fixed expiration dates.

Invest in gold with FINVIA

At FINVIA, you can either purchase gold physically and have it held securely by our partner banks or invest in an ETC that is deposited in gold with Deutsche Börse. We would be happy to discuss with you which option best suits your investment strategy and how gold can be sensibly integrated into your portfolio.

Note: With gold, we focus on a strategic, long-term investment and do not engage in market timing. Instead of reacting speculatively to short-term market fluctuations, we pursue a stable approach based on sound long-term earnings expectations. This takes economic factors into account and aims to achieve sustainable performance and diversification in the portfolio.

Conclusion

An investment in gold can be a sensible addition to any portfolio, especially in times of economic uncertainty and high inflation. Whether through the direct purchase of physical gold or through the use of gold ETCs - both options offer stable opportunities to benefit from the increase in value of the precious metal. At FINVIA, we support you in integrating gold into your portfolio in a meaningful way and ensuring long-term, stable performance.