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Gold fever or golden opportunity?

Written by Kaspar Huijsman | 3 minutes
THU 13-08-2020

It was going to be a golden summer this year. That was at least the intention of our top athletes who would be participating in the Olympic Games. But things turned out differently. Still, this summer seems to get a golden lining: investors are going for gold this year.

Corona not only turned the sports calendar upside down, it also caused the stock markets bouncing in all directions this spring. With a no less spectacular follow-up in the summer, including a hard-falling dollar and therefore that remarkable run on gold. Our team of stock market specialists receives on a daily basis questions from investors about investing in gold. Is this perhaps the time to use - part of - your money to invest in the gold market? Is the gold price indeed going to rise further or are you - certainly in these virus times - just wise to keep the fever in this market at bay?

Why has the price gone up so much?
The extremely low interest rates mean that investors see gold as a stable alternative to savings, so there is more demand. But the less favorable economic outlook in the US, which has caused the dollar to lose value, also has an effect on the gold price. After all, gold is a safe haven in uncertain times and the Covid-19 virus creates a lot of uncertainty and therefore volatile markets.

Should I or should I not invest in gold?
Gold is a regular part of the portfolio for some investors, but others just don't like it. The most famous in the latter group is probably Warren Buffett, who simply does not see the use of investing in gold because the precious metal has hardly any function or application except as a jewel. "It doesn't do anything and just stares at you," said Buffett, who prefers to invest in shares.

Should you invest or not, and if so, is this the right time to do so now? You will ultimately have to make that assessment yourself and it depends on your personal situation, whereby we advise you to study the possibilities and risks of investing in gold before starting.

Golden tip?
Every day our stock market experts - Taco in Gussinklo, Martin Totté and the undersigned – meet for a quick catch up about the trends in the financial markets. In addition, we discuss the most common questions that investors ask us so that we know what concerns them. So this summer that is gold. That is why we have studied all the possibilities that the international stock exchanges offer and can answer all your questions about investing in gold.

Whether you want to invest in a beautiful gold piece of jewelry or a nugget, invest in ETFs or a mining company, we will give you more information about the possibilities and the pros and cons. So do not hesitate to contact us for more information about the gold market!

Author

Kaspar Huijsman

Kaspar Huijsman is the director of BinckBank in Spain & Portugal. He has been working for BinckBank for over 20 years now and founded the office in Marbella in 2006. A seasoned expert in investment, he offers seminars throughout Spain and Portugal.

The information in this article should not be interpreted as individual investment advice.  Although BinckBank compiles and maintains these pages from reliable sources, BinckBank cannot guarantee that the information is accurate, complete and up-to-date. Any information used from this article without prior verification or advice, is at your own risk.  We advise that you only invest in products that fit your knowledge and experience and do not invest in financial instruments where you do not understand the risks. 

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