Read our updated post: “4 Reasons to Invest in Physical Gold in 2019”
That time of year is upon us yet again, during which analysts and experts from the world are requested to make market predictions for the coming twelve months. While prices saw a dip in the closing weeks of 2016 they haven’t yet reached the multi-year low in 2015, and many people will be taking advantage of low prices and investing in physical gold ‘on sale’ in the coming year. Precious metals are enjoying a year-end rally, and traders and analysts are currently bullish on gold for the coming year. Gold will continue to be seen as a ‘fear asset’ in 2017, and as Trump’s presidency begins, uncertainty is certain to make itself known. Here are our top reasons to invest in physical gold in 2017…
Low Prices
Gold is a great investment for the long term and remains the best performing asset of the 21st century, with an average return of 15% a year, over the last ten years. The price of gold is currently at a low similar to that of the close of last year, so it makes sense to invest now. Even central banks around the world are stocking up on gold while the price is down, believing it to be an opportune time to buy. Gold investment is an excellent way to protect your wealth for the future and now you can ensure more of your savings for less.
Market Uncertainty
Around the world economies are being shaken by a profusion of financial, political and geopolitical crises and conflicts. From the war in Syria and the fight against terrorism to the rise of Donald Trump and Brexit – uncertainty has a negative impact on the price of commonly held assets, like shares. People are reluctant to invest in intangible assets they cannot see and touch. Physical gold has always been a safe haven asset that tends to increase in value, as more and more people insure their wealth against financial risk. 2016 has surely been a year that makes investing in a physical entity a comfortable prospect.
Shaky Alternatives
Saving Accounts are currently offering under 1% interest and many of them are in a precarious situation, with regard to capital adequacy rules (the amount of capital a bank or financial institution is required to hold).
The introduction of new stamp duty taxes and taxes on buy-to-let investments will make property investment less and less profitable. The fear is that landlords, who are no longer making good money from their buy-to-let properties, will start to sell en masse, reducing the value of property. Furthermore, as interest rates rise, the cost of borrowing will increase, preventing many people from buying.
Equities are at an all time high and in light of the current market uncertainties, there seem to be more potential risks than gains. Some bonds will offer a good return but they also tend to reflect the risks in the market. For example, Greek bonds are paying up to 9% but would you take the risk? Many bonds also lock you in for a long period of time, which means access to your money is restricted. Gold by comparison is very easy to liquidate.
Tax Savings
We all have to pay tax on our income, including any gains we make on investments; such as savings, equities, bonds and property but physical gold is an exception. When you invest in tax-free gold you can legitimately avoid paying tax on your gains. It’s a very similar product to an ISA but with none of the restrictions or penalties on early liquidation. Furthermore, you are able to keep and control you investment. Many people use physical gold as an efficient form of tax planning, to minimise inheritance tax too.
In recent months, investments in physical gold and silver have been steadily picking up, as central banks and individuals buy the precious metals at dipped prices.There are so many uncertainties in our economic and political landscape, investing in gold is a tried and tested, tax-efficient way to protect and grow your wealth.
