In addition, experts remember that gold is a great asset at times when inflation rises (the prices of everything in general). It is always smart to keep a certain amount of gold at home to convert into money in times of crisis or when inflation rises excessively.
However, if you decide to buy gold in the form of jewelry when things are going well for you or there is not much inflation gold ira companies reviews, you will not be investing efficiently. There are several factors that invite you to think that the best way to invest in gold is through bullion or coins. We tell you so that the values.
But to put everything in context, the demand for gold for jewelry during the first three months of 2021 was 477 tons, while the demand for gold for coins and bars was 339.5 tons, according to the World Gold Council.
Remember that gold always has a place in a diversified investment portfolio, the same as real estate or financial assets, to give a few examples.
The list of reasons to invest in bullion or coins is very long. But if you think that buying jewelry is a better way to buy gold because you somehow enjoy your investment, think again. The main reasons to buy physical gold in coins or bars are purity, taxation, price, liquidity, storage, utility or long-term investment.
Reasons to opt for the purchase of gold in coins or bars
The main reason to invest in physical gold through coins or bars is its taxation. In the European Union, physical investment gold is exempt from VAT when what is purchased are pieces of two grams or more. In personal income tax, investment gold is taxed as capital gain (difference between the purchase price and the sale price).
Gold that is part of jewelry, on the other hand, is not considered investment gold from a legal point of view. For this reason, jeweler bears 21% VAT.
Another aspect that differentiates these two forms of investment in physical gold is purity. Let us understand purity as the amount of pure gold that each piece contains. Well, investment gold measures its purity in thousandths and jewelry gold in carats. What is the difference?
The EU establishes that physical gold has a purity equal to or greater than 995 thousandths for ingots or bars, or 900 thousandths for coins minted after the year 1800 that have been or are legal tender in their country of origin and that are usually marketed for a price not exceeding 80% of the market value of the gold they contain.
However, the purity of jewelry gold is 18 carats, which means a purity of only 750 thousandths. This is because it is mixed with other metals to increase its durability and hardness. Pure gold is 24 karat, but it is too soft and easily deformed. Hence, in jeweler we talk about gold of different shades, since they have to do with the metals that are used: yellow gold has silver and copper; white, silver, copper, zinc or palladium; pink, copper and silver; and the black, ruthenium.
If we talk about price, that of ingots and coins is more controllable, because they do not carry works that raise their price such as design, production, artistic value, etc. Whoever sold jewelry in stores that bought gold realized that they were not what they seemed because the jeweler’s work is not valued and the value of the alloy is reduced.
In line with this point, the liquidity of jewels is not even close to that of bars and coins. Investment gold is worth what the market marks at all times, while jewelry may not be worth the weight of the gold that surrounds it.
On the other hand, storing investment gold is easier because its purity allows it not to get ugly wherever you keep it. You can’t lose it either because you don’t need to remove it from its place of custody, something that can happen with jewelry.
Finally, the great advantage of investment gold is that it can be transferred without involving any type of attachment. Selling family jewels in times of need can be a bad drink. However, selling an ingot or a coin, even if it came through a family inheritance, does not imply sentimental discomfort because it does not imply any attachment.