The remarkable trend in the price of gold is capturing the world's attention. As we enter 2024, the market is holding its breath on expectations that the US Federal Reserve (FED) will begin cutting interest rates later this year. As interest rates fall, the yellow metal looks set to become more attractive relative to alternative investments such as bonds.

So, with the quotation of gold likely to well exceed the record highs of 2023, it is fair to ask what the main reasons are for investing in this precious metal. With promising forecasts for 2024, delve into the world of physical gold : its strengths, forecasts and financial investment advice.

Gold's timeless assets

Having reached $2,000 an ounce in 2023, the value of gold is embodied in the price of bars and coins, for example. The yellow metal is a benchmark for long-term investment, reflecting its solidity in the face of market volatility. Let's take a closer look at its assets :

DISCOVER 10 FRANCS NAPOLÉON GOLD

Safe haven

Historically, gold has always been seen as a stable store of value, capable of retaining its purchasing power over time. This perception is rooted in gold's scarcity, its durability and its role as a universal, wealth-building currency.

During the global financial crisis linked to the subprime crisis, investors turned to gold as a means of growing and even securing their financial capital, fleeing more volatile or risky assets such as equities, which were directly affected by financial instability. This gold rush has led to a rise in the price of gold - to an all-time high of $760/oz - reflecting increased demand.

Similarly, current economic uncertainties and fears of a recession have prompted investors to take refuge in this precious metal.

Medium/long-term capital gains

The rise in the price of gold between 2000 and 2023 illustrates its ability to act as a safe-haven asset and its potential for long-term capital gains. This appreciation can be explained by two major factors.

Firstly, gold enjoys constant physical demand, not only for investment purposes but also for use in industry (electronics, dentistry) and jewellery.

Secondly, emerging economies such as India and China have seen their demand for gold increase significantly, driven by rapid economic growth and rising household wealth, which has helped to push up prices.

Secured and used for protection by investors

The yellow metal is often seen as insurance against inflation, financial crises and even geopolitical tensions. Its intrinsic value and independence from monetary systems make it particularly attractive as a means of diversifying investment portfolios.

Not only is the yellow metal a tangible asset, it is also liquid, meaning that it can be easily sold on world markets at any time, providing a source of liquidity in times of urgent need.

Accessible to all budgets

Unlike other forms of investment, which can require large sums of capital to get started, gold can be purchased at very attractive levels (for example, buying gold through coins such as the 10 Francs Napoléon and the Half Sovereign).

Simply buying a coin made from this yellow metal is a genuine financial investment !

Attractive taxation

In France, the purchase of gold coins and bullion is exempt from VAT. This exemption applies to ingots and gold coins that meet certain criteria (coins that were legal tender after 1800, have a minimum purity of 900/1000, and are sold for no more than 80% of the market value of their gold content). This VAT exemption makes investing in gold physically more accessible and economically more attractive.

For the sale of gold, there are two possible tax regimes in France :

• Flat-rate tax : Since 1ᵉʳ January 2018, a flat-rate tax of 11.5% (including 0.5% CRDS) has applied to gold sales, calculated on the total amount of the sale without taking into account the capital gain realised. This option is automatically applied unless the seller opts for taxation on the actual capital gain.
• Real capital gain : The seller may opt to be taxed on the real capital gain at a rate of 36.2% (including social security contributions of 17.2%). This system is advantageous if the seller can prove the initial purchase and if the capital gain realised is significant. An allowance for the length of time the property has been held applies: no tax is payable after 22 years.

2024 forecasts : values and outlook

Annual inflation is spiralling out of control, causing concern among households and governments alike. According to INSEE, inflation is set to rise by 4.9% in 2023. This is a worrying rise, given that the rate was 1.1% in 2019.

As we saw earlier, inflation is one of the many factors encouraging the purchase of gold. The price of gold has risen by more than 59% over the past five years (from January 2019 to January 2024), with four peaks above $2,000/oz in August 2020, March 2022, April 2023 and December 2023, in parallel with the rise in inflation.

INVEST IN 100 GRAMS GOLD BULLION

Similarly, gold's rise should also be correlated with the growing number of disruptions on the world stage : COVID, war in Ukraine, conflict in the Middle East and so on. These events are very damaging to the real economy. So buying physical metal protects investors' capital, because gold is in high demand in troubled times, so it's easy to secure your assets, with the added value that comes with it !

Its flexibility and the variety of products available (coins, ingots) make investing in the yellow metal adaptable to different financial strategies : protective savings and speculation.

Here are a few examples of practical investments to consider : the 20 Swiss franc coin, the 50 pesos or the 100 gram ingot. 

What's more, some specialists believe that the price of gold could pass the $2,600/oz mark this year. 

Investing in gold in 2024 therefore offers a unique combination of stability, long-term capital gains and protection against financial and geopolitical risks. The precious metal's safe-haven value, investment flexibility and tax advantages make it an attractive choice for all budgets.

For your precious metal transactions in gold, silver or platinum, go directly to our website or to one of our 70 Godot & Fils branches. We will be delighted to assist you with your various financial transactions.