Gold as an asset in 2025: is it worth investing in bank metal?

Amid geopolitical tensions and economic uncertainty, gold is once again attracting the attention of investors. As an expert and analyst at Traders Union, I note the growing interest in bank gold and want to share tips on how to minimize risks and choose the most suitable way to invest in this precious metal.

What Is Bank Gold and What Are Its Types? Bank gold is an investment instrument available in the form of bars or coins that meet international quality standards. Its key feature is high purity (999.9) and exceptional quality, making it highly sought after by investors. Let’s explore the main types of bank gold.

1. Gold Bars

Bars are the most popular form of bank gold. They are produced in various weights, allowing investors to select options that fit their budgets. Reputable producers of these bars include Swiss banks and the London Bullion Market.

Pros:

• High liquidity: Bars can be easily sold anywhere in the world.
• Standardized quality: Uniform purity simplifies authenticity verification and trading.
• Lower production costs compared to coins.

Cons:

• Significant storage costs (requires safes or bank deposit boxes).
• Risk of damage, which may affect their market value.

1. Investment

Coins Investment coins are issued by central banks or other financial institutions. They are characterized by high liquidity and additional value due to their historical or cultural significance. Popular examples include the "Krugerrand" (South Africa), the "American Eagle" (USA), and the "Australian Kangaroo" (Australia).

Pros:

• Excellent liquidity: Coins can be sold on both domestic and international markets.
• Collectible appeal: Their design and historical importance often increase their value.

Cons:

• High premiums over the gold price.
• Risk of counterfeit coins.

1. Allocated Metal Accounts

An allocated metal account (AMA) is a bank account that reflects the amount of gold in digital form.

Pros:

• Convenience: No storage costs and easy transactions.
• Quick access to investments.

Cons:

• Dependence on the bank and its financial stability.
• No physical ownership of gold, as it exists only in digital form.

Essentially, an AMA is a virtual form of gold. Investors do not physically hold the bars, which is convenient but requires trust in the bank.

Pros and Cons of Investing in Bank Gold

Pros:

• Reliability: Gold retains its value regardless of economic conditions. It does not corrode, age, or lose its physical properties.
• Liquidity: Gold can be easily sold or exchanged worldwide, especially in the form of standard bars and coins.
• Inflation protection: Gold traditionally serves as a hedge against inflation, preserving purchasing power when currency values decline.

Cons:

• High storage costs: Physical gold requires secure storage, such as safes or bank deposit boxes, increasing expenses.
• Risk of damage: Even minor defects can lower the market value of bars and coins.
• Taxes: Some countries impose taxes on buying, selling, or storing gold.

What Should You Know Before Investing in Bank Gold?

Before investing in bank gold, consider several key factors.

First, gold prices can be highly volatile in the short term, impacting investments.

Second, political and economic events can significantly influence gold prices. Crises, policy changes, and other critical events may lead to substantial price fluctuations.

Third, pay attention to tax laws and regulatory risks. Different countries have specific rules for owning and trading gold, so it is essential to understand these regulations in advance to avoid legal and financial complications.

Should You Invest in Bank Gold in 2024?

Gold has traditionally been regarded as a reliable way to preserve capital, especially during periods of economic instability. In 2024, its popularity is driven by several factors:

• Economic conditions: High debt levels, inflation, and recession risks increase demand for gold as a safe asset.
• Geopolitical risks: Conflicts and international tensions heighten interest in gold.
• Currency fluctuations: Currency instability encourages investors to diversify their portfolios with gold.

However, before making an investment decision, carefully assess the risks, consider alternative instruments, and consult with a financial advisor to select the most suitable strategy.