Investment in gold is on the rise due to the constant changes in economies and the volatility in the stock and commodities market. Gold is often regarded as a safe investment option compared to other investments due to its rapid value growth. However, it could result in a loss-making activity if an individual isn’t well informed about the investment.
The following are helpful insights of things investors should be aware of before investing in gold.

1. Gold Holds its Value

Unlike stock and commodities investments, gold tends to hold its value during market instabilities. Although all investments involve risks, gold is often considered a safe bet due to its ability to sustain market instabilities.

Gold prices are determined by the amount mined in a certain period. Thus, macroeconomic policies like interest rates and external public debt are unlikely to affect its stability. Nevertheless, new investors should be cautious, especially when selecting the time for investment.

2. The Difference Between Gold Stocks and Physical Gold

New investors must be aware of the type of gold investments they select. Many of them think that they are investing in physical gold while they might be investing in gold stocks. For instance, investing in a gold mining company involves buying gold stocks and not the physical metal.

Investors can make a profit by investing in either way. However, it is essential to conduct due diligence on the perfect time to invest.

3. Certificates

Beginners in gold investments are vulnerable to scams and forged documents. It is crucial to understand that buying gold certificates doesn’t mean the actual holding of the gold. Certificates are only used as evidence for holding gold and they are easy to manipulate. Experts indicate that new investors should be vigilante for such scams and transact with reputable companies.

4. Storage

Experts indicate that the safest place to store precious metals is banks and safe deposit boxes. When opting for physical gold, investors need to think about the quantity, type, and storage costs.

5. Taxes

Many people invest in precious metals since they have lower tax rates than other types of investments. However, investors should note that gold stocks attract a lower tax rate than physical gold. For instance, an increase in the value of gold coins and bars draw an increase in taxes. In the long-term, physical gold may disadvantage an investor due to higher taxes. Therefore, it is vital to seek financial advisory for specific situations.