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Current prices (kg): Gold €99.385 Silver €1.138
    

Starter's Guide Part 1: Why Buy Bullion?

Foreword 

For thousands of years, gold and silver have been safe havens for investors in times of financial turmoil and have been used as a hedge against inflation. 

In the current political and economic zeitgeist, the role of gold is changing again from commodity to monetary metal. More and more individuals and companies are therefore choosing to invest part of their assets in precious metals right now.

Holland Gold offers you this complete guide on how to buy physical gold and silver because we think it's important that you are well informed before you make your purchase! 

Welcome to Holland Gold and we hope you enjoy reading. 

We are confident that you are in the right place (and right place) to take advantage of the next bull market (bull market with a bullish trend) in precious metals. In this guide, we'll tell you why to buy bullion, what to buy, where to buy it, and how to store it. In short, everything you need to know to include bullion in your wealth distribution. In this guide, we talk about precious metals, often directly mentioning gold. Gold is the mother of all precious metals. Other precious metals include silver, platinum and palladium.

Many investors assume that their portfolio of stocks, bonds, and real estate is diversified. However, in periods of high volatility, economic downturns, and stock market crashes, true diversification appears to start with owning uncorrelated assets. Good examples of this are the dot.com crisis, financial crisis in 2007/2008 and the corona crisis of 2020. In other words, an asset that moves in the opposite direction to the rest of the portfolio. An insurance or 'hedge', which can be especially valuable during the next inevitable bear market (market with a downward trend). 

The asset that can protect your portfolio against uncertain times is gold. Owning precious metals has been of great significance to investors (and countries) throughout thousands of years of history. 

Successful investing is not only choosing a stock that is expected to rise, but also involves understanding how gold can serve as insurance for your other investments and actually contribute to your wealth in times of crisis. 

How many investments do you have that can do this?

Gold also offers other financial possibilities and opportunities. 

More and more investors assume that gold and silver can play a role again when a money system comes under pressure. In the past, gold, or the presence of a gold supply to cover a money system, often functioned as an anchor of money or of a money system. More than 140 times, gold has played an important role in a financial reset after a money system was literally pushed away, making its intrinsic value "zero".  

In the case of gold, it's about more than just the possible price increase. More importantly, gold can maintain your purchasing power in the midst of all kinds of turmoil: inflation or depreciation of the currency, economic slowdowns, geopolitical conflicts, or any other crisis. Imagine how important it will be to own an investment that preserves your standard of living at a time when other investments are losing value. 

The timing and specific nature of the next systemic crisis is impossible to predict, but as history shows, it is "almost certain" that one is coming. It's no wonder that gold is a core asset of generations of wealthy families, institutional investors, central banks, and any individual investor who has instinctively felt the need to purchase financial insurance. 

At the moment, it is the central banks that are buying gold...and how! As we say, "You've been on time with gold for a long time, but suddenly you're too late." So let's get started with our explanation. 

Holland Gold

 

Why buy physical gold and silver?

In a highly digital world, where our daily lives are increasingly conducted and handled online, it may seem unnecessary to buy a physical investment. But that way of thinking robs you of one of the best diversification methods available. It's the physical properties of gold that allow us to reap all sorts of financial benefits that other investments don't have, benefits that most investors haven't considered or realized they could have taken advantage of until it's too late.

By physical gold, we don't mean things like precious metals ETFs, which are paper representations that Gold price but do not offer a supply of real metal, or other precious metal products where you do not own the metal or have other restrictions.

No, we're talking about real gold and real silver: physical metal that you can hold in your hands, where you have full ownership, control, and liquidity.

Gold is a unique asset, valued by savers and investors around the world for its specific investment characteristics:

A tangible good

Gold is physical; It can be observed and takes up space. 

You can hold $50,000 worth of gold coins in your hand, which you can't do with most other investments. Gold takes up so little space that you can store a higher value of it in a vault than stacks of banknotes. It cannot be destroyed by fire, water, or even time. And unlike various other commodities, gold doesn't require nutrition, fertilizer, or maintenance. Gold is scarce; The production of gold mines has been growing by about 1.7% per year over the past 20 years and is decreasing.  

Worldwide, about 180,000 tons of gold have been unearthed since the dawn of mankind. If all that gold were to merge into one large cube, it would have dimensions of less than 21 x 21 x 21 meters.

Liquid

Gold and silver can be traded virtually anywhere in the world. There are gold dealers in almost every major city in the world. The moment you choose to sell the precious metal, you can do so anywhere in the world and get paid in the local currency such as the dollar, euro, renminbi or other currency that applies. Even when trading very large quantities, the gold price is hardly affected, if at all.  And in a crisis, precious metals will be in high demand.

The gold market is large, global and highly liquid. We estimate that physical gold ownership by investors and central banks is worth around $4.8 trillion. The gold market is also more liquid than several major financial markets.

Raw material

Gold is a unique commodity. It is a relatively soft precious metal, it is easy to work with, it reacts poorly with other substances and is therefore not subject to corrosion. Gold has been used for many thousands of years to make jewelry, coins, and works of art. In addition, gold is a very good electrical and thermal conductor and is therefore widely used for electrical connections. Because the cost of gold is relatively high, it is usually incorporated into equipment where the properties are used essentially, such as in spacecraft, airplanes, large computer systems.

No counterparty risk

The moment you own gold, the owner is not dependent on actions, promises or support from other parties. It is the only financial asset that is not at the same time the liability of another entity, such as a bank or government. This is in contrast to the money you have in the bank. The money that is in the bank is an asset of the bank, and the bank also determines whether and how you have access to this money. 

Stable

The price of gold and Silver price fluctuate, but retain their value over a very long period of time. A good example of the value retention of gold is that 2,000 years ago you could buy a tailor-made suit for one gold coin and that is still the case today. This is despite the fact that the US dollar, for example, has lost 99% of its purchasing power since the establishment of the Federal Reserve in 1913. 

Gold is often seen by investors as a 'store of value'. This term refers to the function of money or other assets that can maintain that purchasing power in the future. To be useful as a store of value, it must be easy to store and retrieve just as easily at a later date. Gold is popular as a store of value because of its rarity, gold is scarce. Also, once the reserve is brought out again, it must offer predictable ease of use; For example, by using it in the form of a coin as a medium of exchange. Gold and silver are therefore important for wealthy families to pass on a wealth for several generations. It is not gold's role to generate income. The function is as money and as a store of value. That is also why it should not be seen as a commodity; It doesn't run out, like oil or cotton, which is why gold has served as money for so long.

Monetary reserve

In addition to being a commodity, gold is seen as the ultimate currency reserve. Central banks have large amounts of the gold in circulation in the world in their vaults. The gold reserves are important to maintain confidence in the central bank and can be used in the event of a 'system reset'.

According to DNB, gold is an 'anchor of trust': 'If the entire financial system collapses, the gold supply provides collateral to start over', the central bank said on its own website. 'Gold gives confidence in the strength of the central bank. That makes you feel safe.' 

Central banks are currently buying a lot of gold, bringing total gold reserves to the highest level since 1974.

 

Disclaimer and Copyright

Disclaimer

This starter guide has been compiled with the greatest care. No rights can be derived from any inaccuracies. Holland Gold does not accept any liability for any inaccuracies and/or omissions in the content of the starter guide. In this guide, we invite you to find out more about buying precious metals. We do not provide financial or tax advice. 

Copyright

No part of this starter guide may be reproduced other than for personal use and is solely for the purpose for which the information was made available. All "art impressions" have been compiled with the utmost care, nevertheless there may be incorrect information on drawings, impressions, texts and similar and/or there may be deviations between the content and reality. All texts and the like mentioned are indicative. No rights can be derived from these texts, drawings, impressions and the like. No part of this starter guide may be used by any third party without the written permission of Holland Gold.

 

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