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Gold
Bid : 3,074.25/oz
Ask : 3,083.47/oz
Silver
Bid : 34.50/oz
Ask: 34.60/oz
Platinum
Bid: 1,369.45/oz
Ask : 1,405.06/oz
Refresh in 00:00

How does one best accumulate gold in times of crisis?

December 5, 2023

In a time of economic and geopolitical uncertainty, the value of gold as a safe haven asset has become increasingly apparent. Retail interest in gold and silver bars and coins has seen a significant uptick, driven by concerns over bank failures, inflation, recession, and war. As individuals seek to protect their wealth, some have resorted to unconventional methods such as burying their gold in the ground or storing it in secure safes.

To ensure the authenticity and purity of their investments, experts recommend government-minted bars and coins, such as American Gold Eagles or Canadian Maple Leafs. These can be easily purchased through authorized dealers, providing buyers with peace of mind. However, individuals must conduct thorough research and only buy from trusted distributors to avoid counterfeit products.

Jonathan Rose, CEO of Genesis Gold Group, acknowledges that some customers go to extreme lengths to safeguard their gold. He mentions that burying gold is not uncommon among certain individuals, highlighting the deep-rooted belief in its enduring value.

While owning physical precious metals offers a tangible sense of security, it also comes with responsibilities. Storage, insurance, and ongoing costs are necessary considerations for those who choose to possess physical gold. Additionally, markups and discounts should be taken into account when buying and selling.

For those looking for a convenient alternative to physical ownership, precious metals exchange-traded funds (ETFs) provide an avenue to gain exposure to metals without the need for physical storage. However, it is important to note that ETFs cannot be converted into physical metal.

Offering an alternative solution, closed-end funds with physical redemption features allow investors to redeem their holdings for physical metal. These funds may provide more favourable tax treatment and lower counterparty risk compared to other investment options. This option appeals to those who desire the security of owning physical gold while enjoying the flexibility of redeeming their investment when necessary.

In the quantitative analysis, the VanEck Gold Bullion ETF (ASX:NUGG) has experienced a 14% increase in 2023, aligning with the uplift in the Australian gold price. This performance demonstrates the continued appeal of gold as an investment. Furthermore, the Sprott Physical Bullion Trust has outperformed the benchmark ASX 200, showing a 60% gain since its inception in February 2010, surpassing the 52% gain of the index over the same period.

In light of these developments, experts like Sprott emphasize that bars and coins remain the most direct and secure way to own precious metals. They advise prospective buyers to conduct thorough research and purchase from trusted distributors to ensure the authenticity and quality of their investments. With the increasing interest in gold and silver, individuals must make informed decisions to safeguard their wealth in uncertain times.

Jonathan Rose, CEO of Genesis Gold Group, sums it up by acknowledging the lengths some individuals go to protect their investments, stating, “Some customers bury the gold they purchase.” This highlights the unique approaches people take to preserve their wealth and underscores the enduring allure of gold in times of uncertainty.

In conclusion, the surge in retail interest in gold and silver bars and coins reflects the growing recognition of their value during periods of economic and geopolitical instability. As individuals seek to protect and preserve their wealth, the demand for trusted and authentic gold investments remains high. Whether through physical ownership or alternative investment vehicles, investors need to navigate this market with caution and ensure the security of their precious metal holdings.

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