Gold plays a vital role in times of economic uncertainty and that’s why many investors buy the bullion as a safe haven for storing wealth over a long periods. However, the ability of your gold investments to hold its value is subject to the kind of gold you buy. You can buy paper gold such as ETFs, you can buy gold jewelry and you can invest in the stock of gold mining firms.
We observed that gold is one of the smart choices for investors who want long-term protection for their wealth. Gold is tangible and it can be easily moved (at least in small quantities). More so, the physical metal is safe from cyber theft and you’ll still have the same quantity of physical gold irrespective of declines in the value of gold on Wall Street.
2 Reasons EU Investors Should Consider gold investments
- Brexit might bring economic uncertainties that will weaken the Euro
The EU is heading into the Brexit negotiations from a position of strength especially with Macron’s victory in France. The fact that UK’s Conservative Party also lost its clear majority in parliamentary elections suggests that Britain doesn’t have its house in order. Hence, most political commentators have concluded that the EU will find ways to ‘punish’ Britain and deter other countries from leaving the EU.
However, an overlooked fact is that Brexit will birth some economic uncertainties as UK’s strong financial services industry creates a vacuum in the EU. Such economic uncertainties can in turn cause massive fluctuations in the value of the Euro. Buying gold ahead of such potential uncertainty is a great way to limit your downside to risk.
- Increased odds of geopolitical upheavals if other countries ask to leave the EU
The nationalistic clamor that swept through the EU after the Brexit vote last year has abated; yet, we can’t deny the fact that the underlying issues that triggered such sentiments are still very much in place. It is only a matter of time before the populism sentiments are stirred up in nations feeling cheated with the EU arrangement. When the voice of populism returns and nations are clamoring to exit the EU, you can reasonably expect such geopolitical upheavals to trigger economic uncertainties.
The fact that the EU has a common economic bloc and currency can amplify the effects of geopolitical concerns on the economy. Hence, having a decent volume of gold in your portfolio can help you protect your wealth when geopolitical tensions return to the EU.
UK Investors have a great opportunity to protect their wealth with gold
UK investors are also not immune from the potential uncertainties that might accompany Brexit; in fact, the UK will most likely be negotiating from a position of weakness. With the potential economic uncertainties that trailing the Brexit vote in Europe, UK investors should consider getting their money out of the EU and into gold in order to create economic moats around their wealth.
The United Kingdom is a great place for gold investors because investments in grade gold mint coins are not liable for taxes on capital gains. In essence, UK investors will not pay taxes on appreciation of their bullion holdings. Popular gold coins in Britain, such as the Sovereigns and the Britannia, which are mints from the Royal Mints are also exempt from such taxes.