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Wednesday, May 25, 2022
HomeLatest NewsExperts: Investing in gold will help balance risks

Experts: Investing in gold will help balance risks

After the recent cancellation of VAT on the purchase of gold, commercial banks recorded a 30- to 50-fold increase in demand for bullion. But in bars and coins of the precious metal, as, in fact, in all other assets, you should wisely invest free money.

How to buy

Investing in physical metal should be viewed as a long-term investment, says Oksana Lukicheva, a commodity markets analyst at Otkritie Investments. “The gold market is moving in a long-term bullish trend, as currencies tend to depreciate. In this regard, it is necessary to carefully choose the moment of purchase. In addition, you must remember the procedure for buying bullion: it is advisable do it in a commercial bank, keep all the transaction documents, do not violate the packaging of the bullion and keep the certificate,” he explains.

There are a few drawbacks to selling bars: it’s best to sell them to the same bank they were purchased from, as banks often redeem “foreign” bars at a discount. It is important to remember that you will have to submit the purchase declaration to the Treasury on your own. But if you own gold for more than three years, you can claim a tax deduction.

Almost all the big banks sell gold bullion. You can even buy it in mini bars, starting at 1 gram.

Although there are few ingots, they can be stored at home. But it is important to keep the ingots in capsules, not to open them or touch them with your hands. Be sure to keep all certificates and documents in cash. Otherwise, it will be difficult to sell gold at the maximum price.

When purchasing bullion from a bank, they may offer to enter into a storage agreement. In this case, not even the gold will be delivered, the precious metal will remain in the bank.

Why buy gold?

Investments in gold usually give the same return as passive investments in the stock market, but at the same time, the risks of investing in gold are lower. In general, it should be in any investment portfolio, as the presence of gold allows you to balance the risks associated with other assets, such as stocks.

According to Lukicheva, it is necessary to buy physical metal in the investment portfolio constantly, as soon as funds allow. “There is such a rule: a person can be considered rich if he has 240 grams of gold (at current prices on the Moscow Stock Exchange, this is 1 million rubles). Now metal prices have fallen sharply after a short period fast-growing, which is favorable for making a purchase,” he says.

In conditions of some instability in the financial markets, it is worth increasing the share of gold in the portfolio, experts advise

The massive investor has paid attention to gold in recent months: on all transactions for the purchase of precious metals, the 20% VAT has been canceled since March 1. Prior to the adoption of the changes, to make investments in physical gold profitable, due to the 20% VAT (which did not apply to gold coins), it was necessary that the sale price be at least 20% higher than the purchase price. price. This was considered the main obstacle for individuals to invest in precious metals and for the de-dollarization of the economy. According to analysts, the potential demand of citizens for precious metals in ingots is up to 50 tons per year, which represents 15% of its production.

Banks explain the difference between the buying and selling price of gold as additional costs. It is difficult to check the purity of the ingots. Other metals such as nickel can be added to gold. To establish the purity of an ingot, it must be sent for remelting, that is, refining. No one will send a 100 gram ingot to refine. It is necessary to accumulate such ingots for at least a few kilograms. This creates additional inconvenience and logistical delays. An individual who decides to sell bullion will also have to wait.

When buying bullion, the bank will ask the seller for certificates and a contract of sale, and will also clarify the origin of the funds.

Income or peace of mind

Thus, private investments in gold are, in fact, an alternative to deposits in foreign currency. There is also a psychological moment here: in times of crisis, it is precisely the assets that can be “touched” that feel full-fledged: cash, precious metals, real estate.

The authors of a study commissioned by the World Gold Council also recommend increasing the metal’s share of the portfolio during times of instability in financial markets.

Among the advantages of investing in gold, experts highlight the absence of counterparty and issuer risks, psychological tranquility and investor confidence in the security of the asset, as well as the absence of external risks associated with international relations. “Physical gold is located on the territory of Russia, that is, no sanctions are applied to it. And this is a long-term value that has intrinsic value,” says the study.

“The greater the concern in the market, the lower the stability in the financial market, the more attractive gold becomes. Therefore, in conditions of instability in the financial markets, the share of gold in the portfolio would increase,” Vasily, President of the National Financial Association, a self-regulatory organization, agrees with the analysts’ conclusions.

Earlier this year, the World Gold Council estimates that a hypothetical portfolio of a Russian retail investor consists of cash (63%), real estate (28%) and securities of Russian companies (9%). If gold represented 10% of that portfolio, its return over the past 20 years would be 7% higher (provided the portfolio structure remains the same), the researchers say.

demand will increase

Experts agree that VAT has been a major barrier to retail investment in gold bullion as it creates a large gap between the buying and selling price.

“VAT cancellation will become one of the drivers of demand for all gold assets. If the demand for precious metals increases, then secondary instruments such as shares will also grow. Because investors will see that there is a direct relationship,” said the headline. of the department believes stock markets SRO “National Financial Association” Andrey Krylov.

At the same time, experts note that the share of gold in the portfolio should be determined individually, taking into account the needs of a particular investor.

The recent abolition of VAT and a sharp rise in demand for gold will certainly give the domestic producer of the precious metal an economic boost. According to Lukicheva’s forecast, after the abolition of VAT, we can expect an increase in demand for physical gold in 2022 at least twice.

On the way

Kyrgyzstan as an example

The demand for gold bars has increased since the beginning of March among the population of Kyrgyzstan. According to the country’s president, Sadyr Japarov, people are doing the right thing by buying gold.

“Instead of keeping funds in foreign banks or cash at home, it would be better to keep your savings in gold. Therefore, you will not be a loser even after a hundred years,” he is quoted by RIA Novosti.

The country’s authorities assured that gold can be purchased at the National Bank of Kyrgyzstan in any amount.

Infographic “RG” / Anton Perepletchikov / Evgeny Gaiva


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