Get the essential weekly digest in your inbox.
Investing in gold: practical guide, options and risks Investing in gold is an approach that spans the ages, often associated with the search for safety in an uncertain economic world.…
Investing in gold is an approach that spans the ages, often associated with the search for safety in an uncertain economic world. Considered by many to be a safe-haven asset, the yellow metal is nevertheless not an investment without risks or nuances. Understanding its role, the different ways to gain exposure to it, and the precautions to take is essential before deciding whether this asset has a place in your wealth.
Gold is not an investment like the others. Unlike a stock, which represents a share of a company generating profits, or a bond, which pays interest, gold produces no ongoing yield. Its performance depends solely on the appreciation of its price—i.e., the difference between its purchase price and its resale price.
It is therefore crucial to approach it not as a short-term speculation instrument, but rather as a tool for diversification and long-term value preservation. Its behavior is often uncorrelated with traditional financial markets, which makes it a potential counterweight in times of crisis.
The appeal of the precious metal rests on strong historical and psychological foundations. Several reasons explain why savers and institutions, such as central banks, take an interest in it.
Gold’s “safe-haven” status is its best-known feature. In periods of high economic uncertainty, geopolitical tensions, or fears about the stability of currencies, investors tend to turn to gold, perceived as a tangible and universally recognized asset. This increased demand can push up its price when other assets fall.
Including a share of gold in a diversified savings strategy aims to reduce the portfolio’s overall risk. If equities and bonds were to fall simultaneously, gold’s potential performance could help cushion losses.
Historically, gold has shown an ability to maintain its purchasing power over very long periods, acting as a perceived hedge against inflation. When the value of a currency erodes, more of that currency is needed to buy the same amount of gold, mechanically pushing its price higher.
However, this correlation is neither perfect nor systematic. Over multi-year periods, the price of gold can stagnate or even decline, including during inflationary periods. It does not guarantee short- or medium-term protection, and its value can be highly volatile.
There isn’t just one, but several ways to gain exposure to the price of gold. Each option has advantages and drawbacks in terms of fees, liquidity, and security.
This is the most traditional method. Physical gold comes in the form of bars (from 1 gram to 1 kilogram) or investment coins (such as the Napoléon 20 Francs, the British Sovereign, or the South African Krugerrand).
ETFs (Exchange Traded Funds), or more precisely ETCs (Exchange Traded Commodities) for commodities, are exchange-traded funds that track the performance of the gold price. Buying a share of a gold ETF is equivalent to holding a claim on a certain quantity of physical gold stored by the fund issuer.
Another approach is to invest in shares of gold mining companies. This investment is correlated with the price of gold, but it also depends on the company’s performance: its management, production costs, discoveries of new deposits, and operational risks. This is an equity investment, with potentially higher volatility than the metal’s price itself.
The choice depends entirely on your goals, your budget, and your sensitivity to risk.
Far from being a risk-free investment, gold involves specific risks that you must know before investing.
The price of gold can experience significant and rapid fluctuations. Buying gold when its price is at a peak—often in a context of general panic—exposes you to a risk of capital loss if the price normalizes afterward. History has shown that the price of gold can remain stable or decline for long periods.
This is a fundamental point that is often overlooked. Unlike stocks that can pay dividends or real estate that generates rent, gold creates no wealth. The only hope of gain rests on a capital gain upon resale. If its price stagnates, your return is zero—or even negative after accounting for inflation and fees.
The costs associated with investing in gold can weigh on its performance:
Over the very long term, gold has historically preserved purchasing power. Since the early 2000s, its performance has been significant. However, it is crucial to remember that past performance does not guarantee future results.
The profitability of an investment in gold depends entirely on two factors: the price at which you buy it and the price at which you sell it. Between those two moments, decades can pass with zero or negative performance. It is therefore not an asset suited to seeking a steady return.
Answering this question amounts to trying to predict the future of markets, which is inherently impossible. Trying to “time” the market is a very risky strategy.
A more prudent approach is not to focus on the “right moment,” but rather on the relevance of gold within an overall wealth strategy. If your goal is to diversify your savings over the long term, buying a small amount of gold can make sense, regardless of market swings. The decision should be guided by your personal strategy, not by the news or emotion.
There is no absolute rule, but financial advisors generally agree on a moderate allocation. Most recommend not exceeding 5 % to 10 % of your total wealth in gold.
The yellow metal should be seen as insurance—a diversification sleeve—and not as the performance engine of your savings. Too high a percentage would expose you excessively to its volatility and its lack of current yield. The starting budget depends on the form chosen: a few dozen euros may be enough for an ETF, whereas you will need several hundred euros for a gold coin.
Warning: Tax rules may change and depend on your personal situation. The information below is provided for indicative purposes and does not replace advice from a professional.
In France, taxation of investment gold (bars and specific coins) is particular:
For “paper” gold (ETF, ETC), taxation is that of securities: the capital gain is subject to the Prélèvement Forfaitaire Unique (PFU or “flat tax”) of 30 %.
For physical gold, carefully keeping the named purchase invoice is essential. It is the only document that will allow you, upon resale, to choose the actual capital gains tax regime and benefit from holding-period allowances—often much more advantageous than the flat tax.
There is no single answer to this question. The best way to invest an amount like 10 000 € depends on your investor profile, your investment horizon, and your projects. A commonly recommended strategy is diversification: part in secure vehicles (euro funds), part in equity markets (via ETFs to reduce fees), part in real estate (SCPI), and potentially a small portion (for example 500 €) in gold as protection.
The price of gold, or its “spot price,” is set on global markets and changes continuously. It is generally expressed in US dollars per troy ounce (about 31,1 grams). To know the exact price of a 1 kg bar in euros at a given moment, it is essential to consult a real-time, reputable financial source. For reference, you need to multiply the price per ounce by 32,15 and convert it into euros.
No. In France, the Plan d'Épargne en Actions (PEA) is reserved for shares in European companies and certain funds. It is not possible to hold physical gold there, nor ETFs or ETCs that track the gold price. These products are accessible via a standard brokerage account or unit-linked life insurance contracts.
This term refers to an asset perceived as able to hold its value—or even appreciate—during an economic crisis or heightened uncertainty, when riskier assets (like stocks) tend to fall. Gold, because of its millennia-long history, its scarcity, and its tangible nature, psychologically fulfills this role for many investors.
Share it with your network and introduce Homaio to those interested in impact investing!
A newsletter to help you understand the key challenges of climate finance.
NEWSLETTER
Get the essential weekly digest in your inbox.
Schedule a free consultation to master our climate assets.
Dive into the world of carbon markets, where economics, finance, and environmental science converge. Get your ultimate guide now.
A simple guide to understand everything you need to know about the fundamental asset to invest in climate without sacrificing your financial returns.
Understand everything about the UK carbon market and its potential for investors.
Schedule a free consultation to master our climate assets.
.avif)
