Gold has never been so popular. The price of this precious metal has reached new all-time highs in recent days and could do even better. The price of an ounce of 31 g traded on Friday at 2035 dollars per ounce, above the symbolic threshold of 2000 dollars per ounce, far ahead of its previous record (1921 dollars) recorded in September 2011. Since January 1 , the yellow metal has soared by more than 32% while the CAC 40 has fallen by 18%, weighed down by the coronavirus crisis.
Why this record level?
There are many reasons. As a safe haven, gold is a sought-after and reassuring investment in times of crisis. "The other assets are poor: bonds offer very low returns, equities - except those of Gafa - will suffer from the recession, real estate will be affected by business and business bankruptcies and rising unemployment ", Estimates Philippe Herlin, economist, specialist in the yellow metal.
The current monetary policy favors, despite itself, the purchase of gold. “The only response provided by states is to explode their budget deficits and for central banks to run their billboards at full speed to buy state debts and support the economy,” he says. But faced with so much created money, what is money worth? ".
At the same time, the dollar is suffering from the pandemic that the United States is struggling to manage. Its weakening directly benefits gold, which is denominated in dollars: the slightest fall in the dollar makes it less expensive, therefore more attractive to investors who buy it, which increases its price.
Who is buying?
"More and more individuals, disappointed with the yields of bonds or passbooks like the livret A, whose remuneration at 0.5% is losing money if we take inflation into account," notes Christophe Gerber , CEO of the Gold in Cash trading network. But investment funds and central banks remain the biggest buyers. "And quite new, international banks advise the purchase," notes Philippe Herlin.
Can this surge last?
This is a good start. “The previous peak in 2011 was linked to fears of an explosion in the euro zone following the sovereign debt crisis, particularly in Greece, which was finally resolved by a massive aid plan that allayed these fears and the price of gold, remembers Philippe Herlin. Today, we are only at the beginning of the stimulus packages and the main central banks have clearly announced that they are not setting any limits "to support the economy. “Even if we are going to adapt to this virus, it is obvious that the current monetary policy will continue,” notes Nathalie Janson, associate professor at Neoma Business School. Analysts are less unanimous. Those of JP Morgan believe that the price of gold would be close to its peak, quite the opposite of those of Bank of America which expect a price of 3000 dollars an ounce in the next eighteen months.
Now is the time to buy gold?
“Yes, advises Philippe Herlin. This means acquiring Napoléons (the famous 20-franc Louis d'or side 344 euros on August 7), the most common coin in France, from 5 g ingots to 1 kg ingots depending on budgets (Editor's note : from 315 euros to 55,630 euros on August 7) ”.
“If gold offers no dividend or interest, it is not a volatile value,” recalls Nathalie Janson. It's hard to say how long its rise will last, but we shouldn't expect a drastic drop ”. As for the sale, experts advise against it, except in case of need for liquidity. “Gold is rising steadily,” insists Bernard Troubat, deputy sales director at Or en Cash. In 2000, when the 1 kg ingot closed the year at 9,500 euros, everyone said that it could no longer climb, that we had reached a peak… Today, it is more than 55,000 euros! "
Should you buy gold jewelry?
"Only to have fun, but not to invest", warns Philippe Herlin. The purchase of jewelry is subject to 20% VAT and that's without counting the jeweler's margin. While investment gold (coins and ingots) is exempt from VAT and is subject to only one tax, that on capital gains on resale (Editor's note: 36.2% decreasing until full exemption after 22 years of ownership) if you have a precise certificate of ownership. In the absence of this document, a flat-rate tax of 11.5% will be imposed on you in the event of a sale, regardless of the duration of your possession.
