The value of gold has only increased since the end of the 20th century, which makes it an ideal investment, even in times of inflation, thanks to the intrinsic value that this metal possesses.
Added to this is the fact that, after a certain holding period, the resale and the realized capital gain are exempt from taxes.
As such, introducing gold into your investment portfolio can be particularly interesting. There are two forms of investing in gold today: by buying bullion coins or by buying gold bars. But which solution is the most interesting? Gold to Cash takes stock.
Investment Coins
The gold coin is the most common form of gold investment today. This is what is called, the “wool stockings”, that is to say, a small quantity of gold that was commonly kept to deal with periods of crisis.
Moreover, the tradition always wants that one offers a gold coin to the majority of a child or on the occasion of a marriage. However, not all gold coins are considered bullion coins. Indeed, some are considered collector’s items.
An investment gold coin must therefore meet certain conditions and criteria to be considered as such. First of all, it must have a purity equal to or greater than 900 thousandths, or 21.6 carats (CT). It must also be or have been legal tender in its country of origin and must have been minted after 1800.
Finally, the premium associated with the gold coin (i.e. the difference between its weight in gold and the value at which it is negotiated) must be less than 80%.
The most common investment gold coins are the 20 Francs Napoléon, minted between 1853 and 1870, and the 20 Francs Marianne Coq, minted between 1898 and 1914.
These coins should be dissociated from the gold coins of the collection, as is the case with the gold Louis d’or minted during the time of the monarchy.
The investment gold coin has the advantage of offering high liquidity (unlike gold bullion) and of being fractionable, which allows them to be exchanged in small quantities. Thus, buying investment gold coins does not necessarily require making a large investment. This also makes it easier to resell them.
If the investment coin does not have any particular disadvantage, it is however advisable to be attentive to the premium of this one, which is determined according to the state of the coin in question and the offer and the request. This premium can significantly vary the value of the coin.
The ingot today designates a bar of gold or a block of gold. They are made by pouring molten gold into a mold for larger specimens, while smaller-size ingots are made by stamping or forging.
Gold bullion held by central banks should be differentiated from investment bullion. Indeed, the gold bars held in central banks weigh 12.4 kg (or 400 Troy ounces) and have a gold purity of over 99.5%.
Gold bullion does not mean that you will have to invest large amounts. Indeed, there are investment bars of all sizes and weights.
This variety of ranges of ingots then makes it possible to choose exactly the amount of its investment. Note however that for the heaviest ingots (500 grams or one kilo), the investment will be particularly substantial and its resale will be more complicated.
Its main advantage lies in its ease of storage. Indeed, it is easier to store ingots and it requires less attention than a gold coin, which must then be stored with care.
However, it should be emphasized that the gold bar, unlike the bullion coin, does not have any premium. The value of the bullion is that of the gold contained within it.
Better invest in gold
The choice of a gold coin is more justified by the desire to buy a small piece of history, an engraving, or a symbol. Gold bullion is more for those who want to invest in gold without having to worry about a coin’s premium or other parameters.
Today, gold can perfectly take place in an investment portfolio, and this is of the many advantages that the precious metal has at the tax level.
Indeed, since 2014, the sale of precious metals has been exempt from tax for transactions of less than 5,000 euros, and the capital gains tax is degressive at the rate of 5% per year of ownership. This tax even becomes completely zero after 22 years of detention. Added to this is the fact that investment gold is now exempt from VAT.
Especially since the value of gold continues to rise, even when national currencies tend to run out of steam. The metal then turns out to be a particularly interesting investment over the long term, due to the very fact that gold does not lose its intrinsic value in the event of a crisis, unlike other assets such as shares.
