When it comes to precious metals, consistency is the key: fine gold and silver bars are, elementally, fine gold and silver bars, no matter what language you speak and what currency you spend.
Investors from every continent have physical precious metals stored in BullionRock’s secure vault in Guernsey; holdings that form a fundamental part of their diversified investment portfolios.
Surrounded by water and hewn from granite, Guernsey affords BullionRock’s clients some valuable advantages: physical location, natural security, low crime rate, financial services’ know-how and an independent tax system, to name but a few. No matter where you live, BullionRock trades and stores your precious metals cost-effectively and securely without the imposition of VAT or GST. You can also invest in gold and silver bullion coins that enjoy a UK government assurance of weight and purity and that are exempt from UK capital gains taxes.
So, is the time right to consider an allocation to precious metals in your portfolio? Well, a number of external factors are usually responsible for movements in the price of gold:
- Global economics – Gold generally does well during global economic slowdown, since it is considered a safe haven.
- Geopolitics – Again, gold tends to do well during geopolitical uncertainty.
- The US dollar – Gold price is denominated in US dollars and your return will therefore be influenced by changes in the exchange rate of US dollars to your base currency.
- Central banks – Central banks are significant holders of gold as a reserve asset, whose buying and selling can therefore materially impact the gold price.
- Interest rates – Low interest rates generally tend to support or improve the gold price, since the opportunity cost of holding gold, which generates no income, decreases.
- Inflation – During times of rising inflation, gold prices have, historically, risen, as investors are put off by falling or low real, inflation adjusted, returns from bonds and cash.
Whilst none of us know precisely how these factors will play out in the future, gold has been valued for thousands of years. The World Gold Council states that: “Many investors are drawn to gold’s role as a diversifier – due to its low correlation to most mainstream assets – and as a hedge against systemic risk and strong stock market pullbacks. Some use it as a store of wealth and as an inflation and currency hedge.
As a strategic asset, gold has historically improved the risk-adjusted returns of portfolios, delivering returns while reducing losses and providing liquidity to meet liabilities in times of market stress.”
Once purchased through BullionRock, the cost of storing precious metals is less than the management expense ratio of a typical exchange-traded collective investment scheme. Your physical bullion, in the exact form, weight and purity purchased, is held, within a secure six-sided steel and concrete vault that is constantly recorded and monitored, just as you would expect.