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| Gold investment |
Gold investment: Goldman says go for gold; sets a target of
$3,000 by next Christmas
In a report on business today, Goldman Sachs analysts
predict that gold prices will reach new heights in 2025 due to increasing
central bank demand and anticipated US interest rate reductions.
The investment banking firm believes that a potential second term for President Trump could positively impact gold prices, especially in light of increasing geopolitical tensions and concerns about US fiscal stability.
5 Things to know before investing in Gold.
1. 1. Gold and the dollar sometimes have inverse
relationship.
What does the trade-weighted show?
The trade-weighted value shows how US dollar
gains or loses purchasing power against its trading partners.
Note, this relationship is no longer as accurate as it used to be in the past under the gold standard.
2. 2. You pay a premium when you buy a physical gold.
When you buy a gold coin with an ounce of fine
gold from a dealer or a bank, you pay more than the gold price. The difference is
called the premium.
3. 3. You pay tax on collectible rates on physical
gold.
Physical holdings in gold and other precious metals are considered
as collectibles.
These holdings attract capital gains tax which is owed after
you sell your holdings in gold.
This capital gains tax is is equal to your marginal
tax rate up to a maximum of 28%.
4. Physical
gold is different from Gold stocks.
Gold stocks offers higher liquidity
because they can easily be traded on public exchanges.
But in period inflation spiral, physical
gold provides more security and long-term stability.
Investing in either gold stocks or
physical gold comes down to your risk tolerance.
5. An
investment in Gold does not provide consistent returns.
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