The gold price has climbed this week to its highest level in six and a half years. About $ 1500 per troy ounce or around 1350 euros. The stock markets are weakening. Is it time to sell some of the shares and buy gold for them?
No. Because that would be gambling, the gold price fluctuates more than the value of a broad-based investment in equities. And he has since 1975, so since gold is also freely tradable for private individuals, significantly worse than an investment in the world stock index MSCI-World.
But what does the high gold price actually mean for investors? He means two things:
First, there are many investors who find the current political situation threatening. In fact, there is quite a lot going on: the Hong Kong struggle for its civil rights, the US-China trade war, the attacks on Iranian tanker ships on the Gulf of Hormuz, the disorderly Brexit and finally the government crisis in Italy.
The concern is understandable. Some then buy gold for hedging. Many have done so in the past centuries, believing and knowing that gold would never be completely worthless - even if the purchase in the specific situation was not necessarily clever.
And there are enough dealers who bet on this trend. Investors can observe a similar development in Bunds. These are now considered a safe investment for decades. In uncertain times, traders bet on the solidity of the Federal Republic of Germany. If you lend the Federal Republic of Germany money for a year or even 10 years this week, you will always have to pay extra, so you have to pay penalty interest; this week for ten-year Bunds 0.65 percent. A good investment is different.
Secondly , such political stock market developments as we are currently experiencing are quite risky for investors. This means that those who have bought gold out of concern or speculative intentions in the past few months now have to watch out when that market trend tilts again.
Anyone who bought too much gold at the last political gold exchange in 2011 and 2012 will now have the opportunity to rebalance their investment. Otherwise, only those who by conviction always have a small share of gold in the depot, have a reason to be happy about the added value.
Why am I so skeptical? There is corresponding experience with political stock exchanges of the past: In early 1980, the gold price reached a first high at the height of the Iran hostage crisis. The Iranian Revolutionary Guards had taken hostages from the US embassy and the US government had tried to free the hostages in a failed commando operation. The price of oil reached $ 30 a barrel for the first time and the price of gold was driven up by speculators to $ 850. The US Securities and Exchange Commission intervened, made it more difficult to gamble, the price of gold fell quickly and clearly. 28 years later, 2008, to reach the highest level again.
"Whatever it takes"
In 2011 and 2012, the stock markets also speculated after the financial crisis that the eurozone would break up. The gold price rose to $ 1,900 a troy ounce. Again, the regulators intervened, doubling the securities gamblers had to put on the table to trade gold futures. The flight was over. Later, ECB chief Mario Draghi gave the speculators the rest with the clear message that the euro remains "whatever it takes". The gold price fell in the following years to 1100 dollars per ounce. Anyone who bought gold at highs between 2011 and 2013 is still sitting on losses.
Conclusion: In recent decades, the regulators have always intervened when it came to systemic crises - and ended the speculation.
Anyone who thinks now that he must buy - if only for a better feeling - or who was waiting for the right time for sale, for there is still good news. Buying and selling today is much easier, safer and cheaper than before. This is mainly due to the better options for a price comparison.
Websites like gold.de or gold-preisvergleich.de allow online price comparison just in time and the purchase and sale in a short time. Of course, with the online prices in mind, you can always go to the retailer you trust and, with a low-priced offer on site, carry the gold straight home.
By the way: Some people fall for the idea to buy on the Internet and to make use of its right of withdrawal in the case of a fall in prices for distance selling. You should forget that very quickly. When buying gold, the right of withdrawal does not apply.
It still makes a difference whether you buy coins or bars: The margins of the traders are significantly larger if you buy gold in small denominations. Customers who want to sell a South African Krugerrand - one of the most popular gold coins - with the weight of one ounce (31.1 grams), get just under 4 percent less money than they have to put on the table when buying. If you only want to sell a tenth of an ounce, you have to accept a price reduction of 11 percent. On the other hand, if you buy a whole kilo of gold - in the form of a bar, for example - there is less than 2 percent difference between the buying and selling price. But that also means that you first have to put well over 40,000 euros on the table.
Gold can easily be stolen
And then of course you should insure the gold as part of their home contents insurance. It does not matter if you store the gold at home or in the bank safe. Gold has actually been stolen from a bank safe that was not insured there by the bank. Remember, one kilo of gold is smaller than a pack of cigarettes.
As far as the price comparison is concerned, the transparency advantages through the Internet also apply here. Today you can easily compare prices for standard coins or bars on the internet. You can check the trader's trustworthiness and have the bullion or coins picked up at the time of sale.
An additional advantage for those who sell at a profit after more than 12 months: The profits from the gold sale are then tax-free. You do not even have to mention them in the tax return. Also, a final withholding tax does not apply.
Disadvantage for impatient spirits: If you sell before the 12 months, there is a private sale and you have to tax the profit from a certain amount with your personal income tax rate.
Conversely, however: Who has his gold for more than 12 months and has made losses, this can not make the tax office. Another reason why some buyers from the boom phase 2011 to 2013 eagerly wait for the gold price continues to rise.