Protection in the event of a financial crisis and disturbances on the stock markets, the yellow metal is the ultimate safe haven. All the lights have therefore been green for two months, which would explain the current strong demand for physical gold recorded by the main gold counters.
The gold rush did happen in April. Crisis obliges, the safe haven that is gold has been in high demand if the experts are to be believed. It is considered to be a particularly popular investment in the event of a financial crisis. In search of liquidity and security, individuals took advantage of this period of confinement to concretize their request at the counters for the sale and purchase of physical gold, as Laurent Schwartz, President of the Comptoir National de l ‘ Gold.
Gold, precautionary savings in times of crisis
Physical gold, like any other commodity, is backed by an international price that fluctuates daily with the activity of the jewelry industry, mining and investors. Other important parameters, the budgetary and monetary policies of the States. Moreover, it would even evolve unlike other financial markets, hence its aura of “protection” in the event of a stock market crisis. According to the publication of Comptoir National de l’Or, one ounce of gold was minted at around 1,358 euros at the end of 2019, while its value was around 1,500 euros at the end of March 2020, in the middle of a coronavirus pandemic. Another interesting variable, the demand for investment gold would have increased by 80% in the 1st quarter of 2020. And it may well continue. What make you want to invest!
READ >>> The French are turning more and more to the safe haven of gold
How to buy gold?
Wondering how to position yourself on this safe haven? You can opt, for example, according to your budget, for ingots of 10 gr (around 545 euros depending on the daily rate) or Napoleon gold coins (320 euros depending on the day), the most requested.
Laurent Schwartz, director of Comptoir National de l’Or, in his latest publication, offers an interesting calculation: for 100 euros invested in French stocks on January 1, the value would be 76.50 euros today, while 100 euros invested in gold would be worth 115.50 euros currently.
Since the start of the year, gold’s performance has therefore reached 15.5% in euros, a figure which places gold among the best investment of the year, and above all one of the few to be positive.
Strongly increasing demand
In search of security and liquidity, requests from individuals are soaring. This is the observation of Laurent Schwartz. ” The impact was strong during this confinement period. We have seen the arrival in a significant way of new client profiles: associations, companies and many liberal professions. The increased demand for physical gold has multiplied our turnover by 4, even by 5 compared to a classic month in 2019. We had to manage a fairly substantial incoming call flow which mobilized nearly 10 people per day “, He tells us.
Two explanations for this craze according to him. First, savers would be worried about bankruptcy for their assets. Second, individuals want to invest in what they believe to be a safe haven.
Another observation, the price of gold in euros reached its highest level last month, a record! ” Gold resumed its spectacular rise, already started at the end of 2019. The price even reached an all-time high in euros on April 23, at 1,608 euros per ounce. ! “, Details the website of Comptoir National de l’Or.
A deconfinement much awaited by customers
The deconfinement will allow customers to move around the offices, to fulfill the requests made by phone to buy gold, confirmed the President of Comptoir National d’Or. Another expectation, ” individuals who currently need to sell their gold coins or jewelry (inheritance, financial needs) will rush out of containment. It’s always good to sell gold when prices are high “, Specifies Laurent Schwartz.
Another piece of advice, remember to determine your tax strategy before any purchase. Physical gold is subject to a flat tax of 11.5% on the amount of the sale, whether it results in a capital gain or a capital loss. Another point to take into account to hold gold. The capital gain is subject to tax at a flat rate of 19%, plus 17.20% social security contributions. This plan is accompanied by a capital gain allowance of 5% per year beyond the first two years of ownership. Or a total exemption after 22 years. A condition: the saver must be able to prove the date and the price of acquisition of his gold by an invoice.