Gold Is on the Rise: Our Tips Before You Invest

With global news dominated by anxiety-inducing events (wars, uncertain elections) and inflation showing little sign of slowing down, gold has become a favored asset among investors seeking safety. And for good reason. With a stable yet steadily rising price (+125% over 10 years), gold truly deserves its status as a safe-haven asset.
 

Gold remains an investment. And like any investment, it requires caution. Here are the mistakes to avoid to safeguard your gold investment, along with our tips for investing.
 

Avoid investing all your savings
Even though gold is a safe-haven asset, avoid investing all your available savings in this asset (or any other). Remember that investing always involves risks, so it’s best to err on the side of caution. It’s generally recommended to invest only 5% to 15% of your available savings so that you can handle life’s unexpected events: job loss, a broken-down car, or unforeseen expenses. Tying up all your money in gold can leave you short on cash when you need it most.

Another common mistake among novice investors is jumping in headfirst without a clear investment strategy. Remember that the goal of investing, beyond protecting your wealth, is to generate potential capital gains from your investments. You should therefore start by listing your short-term goals (such as needing funds for a personal or professional project) and long-term goals (such as building a supplemental retirement fund), and then determine which investment strategy to implement to achieve them.
 

Avoid Unrealistic Expectations
Many novice investors sometimes allow themselves to be misled about their potential returns. This is often due to stories from other investors that are sometimes a bit too rosy, or to a lack of understanding of gold prices. In fact, expecting spectacular returns over a short period—especially when it comes to investment gold—can lead to disappointment. Remember that gold is first and foremost a safe-haven asset, not a volatile asset that could lead to get-rich-quick schemes. Investing in gold generally pays off over the long term. For example, if you had bought one ounce of gold in January 2023 and sold it in January 2024, you would have realized a capital gain of approximately €170. If you had bought it 20 years earlier, in January 2004, you would have realized more than €1,532!

Investing solely in gold would be like “putting all your eggs in one basket.” If the price of gold skyrockets, that’s certainly good news. But if the price of gold were to plummet, your entire investment would suffer. Diversifying your assets allows you to spread risk and optimize return opportunities. Combine stable assets like gold with other, more volatile but potentially higher-yielding assets—such as cryptocurrencies or stocks—to offset risks. Generally, it’s recommended to hold 80% stable assets and 20% volatile assets. But it all depends on your risk tolerance (or lack thereof!).
 

Don’t overlook taxes and duties
While gold is exempt from VAT and enjoys very favorable tax treatment, depending on your specific situation, this is a factor that should not be overlooked. In France, you’ll have to pay one of the following two taxes when reselling (generally, the more favorable tax regime applies):
• the precious metals tax (TMP), equal to 11.5% of the total sale price,
• or the capital gains tax, equal to 36.2% of the capital gain. After two years of ownership, this tax is reduced on a sliding scale, leading to full exemption after 22 years. Understanding these different taxes helps avoid unpleasant surprises and also allows you to refine your investment strategy.

In light of the previous point, to take advantage of the capital gains tax exemption, it is crucial to prove the length of time you have held the gold investment. It is recommended that you carefully preserve all invoices—which must be in your name, dated, and itemized—as well as the certificates of authenticity for gold bars and coins. These documents are not only important for tax and financial purposes but also in the context of a bequest or estate. They will greatly facilitate the management and distribution of your gold assets, thereby avoiding administrative complications.

Understanding Investment Gold
Investment gold must meet specific criteria, which are defined by law. Two products fall into this category: gold bars and gold coins. Gold bars must weigh at least one gram, have a minimum purity of 995 parts per thousand (meaning they contain 99.5% pure gold), and be accompanied by a certificate attesting to these characteristics. Gold coins, on the other hand, must have been minted after 1800, must contain at least 90% pure gold, and must be or have been legal tender in their country of origin. Finally, these coins must also be sold at a price that does not exceed 80% of the value of the gold they contain. Therefore, be careful with gold jewelry and collectibles that do not qualify as investment gold.

Where should you buy, store, and sell your gold?
In a savings account? Under the mattress? While the question might raise a smile when it comes to hiding a few gold coins, the issue of gold storage becomes extremely serious when you’re looking to step up your investment strategy. Theft, damage, and accidental loss are real dangers. It’s recommended to opt instead for secure solutions such as specialized storage services that offer optimal protection against theft and damage. These solutions, while they come at a cost, ensure the security of your investment.

Although gold is often considered a stable asset, it’s essential to understand how its price fluctuates. The price of gold fluctuates based on various economic and geopolitical factors. Understanding these factors allows you to anticipate, as much as possible, potential movements in the price of gold. Staying informed about market trends also helps you avoid buying or selling at inopportune times, thereby maximizing your investment. Get into the habit of regularly monitoring gold prices and expert analyses to make informed decisions and optimize your returns. Market knowledge is your best ally for a successful investment.

It is essential to work with reputable professionals when buying and selling gold to avoid scams and ensure everything is done by the book. Remember that a professional seller must be able to:
• Provide clear and transparent details of their pricing,
• Supply all necessary documents to authenticate and track your transaction. Be sure to consult reviews from investors and industry experts to find the professional best suited to guide you through your investment process.