Want to invest in Gold? 10 Tips for investing in Gold.

Do you want to diversify your investments? Is investing in Gold a safe option? If you want to learn a bit more about the world of precious metals, check out these 10 key tips for anyone looking to invest in Gold.

First of all, as with any investment, there are risks to consider and weigh carefully. It is not advisable to make investments without understanding that you may eventually lose part of your capital.

Read these tips, exchange ideas with others, consult supervisory authorities and their guidance, and form your own opinion.

Please note that we are not financial or investment specialists. This text is not intended as financial advice but only for information and the exchange of opinions and knowledge.

Store of Value

For hundreds of years, Gold has been considered one of the most precious metals, and its value has been used as a standard for many currencies throughout history. Nowadays, it is more commonly used in Jewelry, Industry, Electronics, as well as for Currency Issuance and as a Store of Value (a store of value is the ability of certain goods and assets to preserve their purchasing power over time).

As a store of value, in 2020 the Portuguese Republic, through the Bank of Portugal (BdP), held around €20 billion in gold reserves. This amount corresponds to about 10% of GDP and ranks as the 14th largest holder of gold reserves. The BdP states that these reserves have remained stable for several years and there are no plans to sell. Among the top 15 holders of gold reserves are the IMF (International Monetary Fund) and the ECB (European Central Bank).

The History of Gold as a Store of Value

History has shown that gold, as an asset, has always been successful in preserving and securing wealth. With the rise in its price, it has outperformed many other forms of investment. Gold has always been used to diversify wealth and is globally considered a “safe haven” for investors, offering protection during turbulent economic times.

Between 1870 and 1914, the so-called “gold standard” was in place. This was the first international monetary system. In simple terms, each country could only issue paper money based on the amount of gold it held to back that currency. Countries needed sufficient reserves to exchange banknotes for gold upon request.

In 1944, new agreements were established that no longer required countries to hold gold as backing.

In 1999, through an agreement between the ECB, the Eurozone (central banks of the 15 EEC countries), Switzerland, Sweden, and the United Kingdom, representing 45% of global gold reserves, it was established that gold remained an important global monetary reserve, and sales of gold reserves would be limited. Even after the agreement ended in 2019, there were no significant sales, reinforcing the idea that maintaining gold reserves is a strategic decision.

The USA, Japan, Australia, the IMF, and the BIS (Bank for International Settlements), although not signatories, announced they would also follow the agreement’s principles and suspend gold sales.

Records Are Meant to Be Broken

In 2018, gold had already broken all records of the previous 50 years. It reached its highest value ever in 72 countries and across all major reference currencies.

Investor demand for gold has grown by approximately 4% per year. Despite trade tensions between China and the USA, China has maintained its gold purchases, and Southeast Asia has seen annual growth of around 12% in gold demand.

In August 2020, gold reached new historical highs, surpassing $2,000 per ounce (30.10 grams) during the COVID-19 pandemic, reinforcing its role as a safe-haven asset. The pandemic strengthened the perception of gold as a reliable refuge. It continues to gain prominence in markets, especially during economic or political crises.

In February 2022, with the Russia-Ukraine war, gold prices rose again.

Gold supply is finite. Mining is limited. Existing gold in circulation has appreciated over time, with demand exceeding supply an important economic indicator.

Gold Price

In Portugal, legislation assigns the Bank of Portugal responsibility for setting gold prices. The BdP refers to the LBMA (London Bullion Market Association), operated by ICE Benchmark Administration (IBA). Prices are set twice daily (10:30 and 15:00 GMT London) in US dollars, on the “London market.”

Historically, gold performance has been strong. Since 2000, it has grown +517.23%; over the last 5 years +42.88%; last year +2.71%; last 6 months -6.62%; and last 30 days +2.49% (data from April 26, 2021, Kitco.com).

Although gold often appears to be constantly rising, there are downturns that can lead investors to sell at a loss. For example, investing six months prior (as of April 2021) could result in a loss, whereas investing over a year earlier would yield gains.

Why Buy Gold?

For financial health. After the 2008 banking crisis, which had severe global and national consequences, many lost trust in banks.

Institutions such as Banif, Banco Espírito Santo, Banco Privado Português, and Banco Português de Negócios led many people to move away from banks as investment vehicles. Low returns on low-risk investments, restrictions on savings accounts or pension plans, and negative interest rates discouraged traditional saving.

Gold can be an effective hedge against inflation, deflation, low interest rates, and financial instability.

As a precious metal, gold is recognized worldwide as a luxury item, easily tradable and sellable.

Where to Buy Investment Gold?

Always buy from entities certified by the INCM (Casa da Moeda) or other supervised institutions.

Research thoroughly. Explore forums, read opinions, and verify authorized sellers. Supervisory authorities in Portugal monitor this sector to protect consumers.

Speak with sellers, understand costs, delivery times, certification, resale conditions, and any relevant details.

Both buying and selling involve commissions of at least 7–9% over the daily market price. Always consider the spread.

Avoid impulsive purchases. There are no bargains in this market. Do not buy online from unverified sources. Avoid private sellers and be cautious with foreign entities, as filing complaints may be difficult.

Many beginners underestimate how easy it is to be deceived, especially when investments can reach thousands of euros.

When to Invest in Gold: Is There a Right Time?

Many wonder if there is an ideal time to invest. Looking at historical trends, several moments appear, in hindsight, to have been great opportunities.

In 2005–2006, gold was around €450 per ounce. During the 2008–2009 crisis, it rose to about €600. By late 2018, it reached approximately €1020 per ounce.

In reality, there is no perfect timing. The right moment depends on each investor’s strategy and decision to diversify.

If you want to include gold in your assets, the key is to invest in an informed way and when you are financially ready.

Investment Gold – VAT Exempt

Investment gold is one of the few assets with tax advantages. Buying gold is VAT-exempt, and currently, selling it is also exempt from capital gains tax.

Investment gold includes gold bars and coins not jewelry, which is subject to taxation.

Investment gold is one of the few assets with tax advantages. Buying gold is VAT-exempt, and currently, selling it is also exempt from capital gains tax.

Investment gold includes gold bars and coins not jewelry, which is subject to taxation.

Gold prices vary daily, and there are associated costs (handling, certification, transport, commissions, etc.). Costs depend on weight and format. Bars usually have lower costs than coins due to minting and handling expenses.

Larger bars (e.g., 1 kg) have lower relative costs than multiple smaller bars (e.g., 10 × 100 g). However, smaller units provide better liquidity flexibility.

Storage is also important consider safes or bank vaults, duration of holding, and associated costs. Gold is considered liquid money, so transporting it across borders follows the same rules as cash.

How Much Should I Invest?

This is a personal decision, but allocating 5% to 10% of your net worth can be a starting point.

Always decide carefully and be aware that gold investment involves currency fluctuations (USD/EUR) and market volatility, with potential capital loss.

Final Tip

Keep learning, exchanging ideas, and asking questions, even simple ones. Engage with differing opinions and consider alternative perspectives.

Remember, we are not investment specialists, this is only an opinion. Always keep in mind that all investments carry risks.

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