Is gold a safe haven?
Is gold a safe haven?
We often hear it said that “gold is a safe haven”. But what exactly does this mean? Gold is a physical asset in which to invest, protecting you from economic crises and inflation. By including gold in your investments, you diversify your financial portfolio and secure your wealth. In this article, we explain everything you need to know about gold’s safe-haven status!
Definition of a safe-haven asset
By definition, a safe haven is a financial asset considered safe and reliable during periods of economic uncertainty or market volatility.
A safe-haven investment is ideal for securing your wealth in times of crisis. These securities and assets stand out for their reliability at the time of acquisition. They are stable, even rising, investments that often generate a profit on resale.
With little sensitivity to changes in the economic climate, safe-haven investments are highly effective in securing their holders’ wealth. There are many, like real estate or the dollar at one time, but gold has been THE safe haven for millennia.
Why do we call gold a safe haven?
Gold is considered a safe-haven asset for several reasons. Firstly, gold is a tangible asset, meaning that it exists physically in the form of bars, coins or jewelry. Unlike purely financial investments, it has a physical, tangible presence, giving it a certain stability and intrinsic value.
Gold is also historically recognized as a store of value. For centuries, it has been used as a medium of exchange and as a store of wealth. It retains its value over time and is considered a stable asset, less subject to the fluctuations and risks inherent in financial markets.
In times of economic crisis, when financial markets are volatile or uncertain, investors often turn to safer assets, such as gold, to protect their capital. Gold is seen as a form of protection against inflationcurrency devaluations and fluctuations.
Finally, central banks and governments also hold large quantities of gold in their reserves. This reinforces the perception of gold as a safe-haven asset, as it demonstrates its recognition and confidence as a reserve asset.
How can I secure my savings with gold?
L’buying and selling gold allow you to invest your savings intelligently and vary your investment portfolio. Be careful, however, about quality of gold bought in terms of purity and carats! This is what defines the value of the coins, bars and other gold objects you can buy.
Investment gold represents coins and bullion. gold bars. Since January 1, 2000, gold bullion must meet the following criteria:
- be in gold bars, ingots and wafers ;
- weigh more than one gram;
- have a purity equal to or greater than 995 thousandths;
For gold coinsthey must :
- have a purity equal to or greater than 900 thousandths;
- have been minted after 1800;
- have or have had legal tender status in their country of origin;
- be in excellent condition (no scratches or dents if possible).
Gold as a safe-haven asset is subject to strict rules, and every year the member countries of the European Union draw up an official list of coins considered to be investment gold. In France, the most famous coin is the Napoleon.
Should you buy gold? in the form of securities, i.e. paper gold? These are securities that enable you to acquire investment gold without physically owning it. Here are the main options for investing in gold as a safe-haven asset:
- Bonds: these securities are backed by physical gold whose stocks are held in the UK. Bond prices are thus indexed to the price of gold, and transactions take place on the stock exchange.
- Gold funds: these consist of mutual funds that invest in gold companies. These are riskier funds, since the market is more volatile.
- Gold trackers: you hold shares representing a fraction of an ounce of gold. The financial institution stores them and guarantees them with gold bars.
Where to buy safe-haven gold?
Gold is one of the safest investments you can make, especially in times of inflation. In fact, while your savings placed in a bank passbook lose value due to rising prices, the value of your capital invested in gold is maintained, or even increased! So now you’re probably wondering how to buy gold ?
To benefit from all the advantages of this safe-haven asset par excellence, you can buy gold at the best price from Les Métaux Précieux’s Paris branches. Explain your investment project to our experts and benefit from tailor-made advice.
If you have jewelry or coins that you’d like to profit from right now, our gold buyback also offers you a free, no-obligation valuation of your gold objects, coins and ingots.