Why are more and more individuals and businesses turning to investment gold? The reason is inflation, which is eroding the value of both the euro and the dollar! European Union citizens are unpleasantly surprised by high prices in stores every day. Everything is getting more expensive – from energy sources (fuel, gas, electricity), construction materials to basic food items.
Why is this happening? The answer is simple. Global inflation is spiraling out of control. The numbers published by statistical offices worldwide are alarming. The impact on citizens’ living standards is evident as money is seemingly losing value.
Inflation affects those with cash the most. Whether in a savings account at a bank or in cash at home, money equally loses its value. Money tied up in banks generates minimal returns, which have become merely symbolic. The inflation rate significantly exceeds interest rates on savings deposits.
IS SAVING STILL WORTHWHILE?
A large number of businesses worldwide are seeking an appropriate solution to protect business profits. Until recently, the most common method was buying investment properties. Companies would own investment property until its value increases, then sell it. From an economic standpoint, this is a completely viable solution. However, when deciding to invest, one must consider the fact that it takes time to monetize a property. Often, this is an entire process – daily property showcasing to potential buyers until the right buyer appears. This process has a certain duration. In recent years, this trend of risk protection (capital protection trend) has begun to change direction. Investment properties in companies are increasingly being replaced by investment gold.
Gold has been known for centuries as the greatest “fighter” against inflation. Looking back over the past 50 years, we can see that gold’s value has multiplied several times. If we were to break this down into an annual timeframe, we would reach an average 8% annual growth in gold value. This figure should not be taken as a rule, as there are years when gold’s value has a negative movement – this is a weighted figure obtained mathematically as an average percentage value for a specific time interval.
If we purchase an investment property intending to cash it in quickly, we will certainly suffer a loss, and the same is true for investment gold. The optimal investment period for the investment effect to be positive is five years or more. The sense of investing can also be seen in an investment period of two years.
Benefits of investing in gold can sometimes be recorded in shorter time intervals, but this should not be taken as a rule.
Investment gold has the status of a cash equivalent for a company. Gold changes (reduces) the balance of the current account by the amount invested in investment gold. The value of investment gold is expressed as a cash equivalent. Buying investment gold essentially does not reduce a legal entity’s profit. The profit tax remains the same, but there is a surplus in the balance sheet, which shows the company’s assets on a specific day. Investment gold is a highly liquid form of assets that can be cashed in immediately.
A certain number of legal entities show investment gold in their inventory. Cashing in investment gold is not a process, but a transaction that is executed automatically. Investment gold is owned by individuals and legal entities to protect the value of accumulated money. In this way, they prevent the situation where the earned money buys less goods due to general price increases.
Considering that gold’s value has quadrupled in the last 20 years, it is not surprising that gold is becoming an increasingly popular form of assets for legal and individual entities.
The demand for gold worldwide is continuously growing. Investment gold is available to every citizen. You don’t need a lot of money to buy gold. Investment gold is available from one gram.
Investment gold represents pure gold of the highest possible purity 999. 9 ‰ in the form of gold bars or gold coins with purities ranging from 900 to 999.9 ‰. Only gold bars come with a manufacturer’s certificate, which includes the serial number of the bar that must match the serial number engraved on the bar itself.
The world’s largest producer of investment gold is the Swiss-German conglomerate Heraeus. Heraeus owns the Swiss mint Argor-Heraeus. Products of the Argor-Heraeus conglomerate enjoy the highest level of trust in the precious metals market worldwide. Thinking of these two companies is associated with the highest level of security and liquidity. In all European Union countries, investment gold is exempt from VAT payment.
In summary, as inflation continues to rise and traditional methods of saving and investing become less reliable, more and more individuals and businesses are turning to investment gold as a means of preserving their wealth. With its long history as a hedge against inflation and its high liquidity, gold has
become an increasingly attractive option for those looking to protect their assets from the effects of economic instability.
