Gold is one of the few assets which has consistently kept its value over time. This attribute has made it popular as a store of wealth for millennia. The fact that the value of gold fluctuates against that of fiat currencies makes it attractive as an investment vehicle.
Unlike some other countries which restrict or even prohibit gold ownership, Switzerland has very favorable gold ownership laws. Gold bullion is classified as a currency equivalent in Switzerland, meaning it is free from customs duties and value-added tax (VAT). Swiss gold refineries like Argor Heraeus, Metalor, Pamp, and Valcambi are world-renowned, and Swiss banks and other gold brokers offer many different gold denominations to suit the needs of gold users.
If you plan to buy gold as part of an investment plan or as a way to store wealth, consider these basic tips for saving money and securing your investment:
1. Consider alternative gold investments
If your main goal in buying gold is to make a profit by selling it at a higher price within a relatively short term, you may be better off investing in some form of gold derivative. Exchange traded funds (ETFs) that track gold price indexes are one option. Although you pay fees (the TER and possible custody fees and brokerage fees) to invest in ETFs, you benefit from greater liquidity because ETF shares can be bought and sold through stock exchanges (using cheap online brokers, for example).
Unallocated gold certificates are another alternative. These are a form of promissory note by which a third party (a gold pool, for example) promises to pay out the corresponding amount of gold upon request. These certificates allow you to invest in gold without purchasing actual gold bullion. Unallocated gold certificates can be purchased directly from gold pools or through securities brokers. Unallocated gold certificates generate much lower storage fees than allocated gold certificates, or even none at all.
2. Consider precious metal accounts
Many Swiss banks offer accounts which are dominated by gold rather than Swiss francs. Holding assets in a precious metal account lets you benefit from the stability of gold prices, and possible growth.
The advantage of using a precious metal account is that you can buy and add gold to your account instantly at favorable exchange rates, and sell gold back to the bank instantly if you choose to. You can also transfer gold to other gold accounts (fees may apply when you transfer to a different bank).
The disadvantage of these accounts is that you pay an account maintenance fee which is basically a negative interest rate. When you hold assets in a precious metal account, you steadily lose money to account fees, which detracts from capital gains.
3. Prepare ahead of the purchase
Having a safe installed or renting a bank safe deposit box or non-bank secure storage ahead of purchasing your gold will minimize the possibility of theft. Buying gold in the same bank or gold dealer which hosts your safe deposit box is the most secure option because it eliminates the need to transport the gold to a safe storage. Some dealers offer secure gold transportation for an additional fee.
4. Compare prices
The differences in prices charged by different dealers for the same amount of gold can be substantial. Depending on where you buy your gold, you may pay as much as 80 francs more per ounce and as much as 500 francs more per kilo at the most expensive dealers than you pay at the most affordable dealers. Take time to compare prices before you buy.
The online comparison platform Gold.ch lets you compare gold prices at a number of Swiss dealers.
5. Buy from a reputable dealer
When buying a physical commodity like gold, the risk of ending up with counterfeit bullion is a very real one which can have devastating financial consequences. Avoid purchasing gold online, even from websites that appear to be legitimate. Before buying gold from a private individual, have it appraised by a qualified, independent specialist.
Swiss banks are a safe solution for gold purchases, but not all banks sell gold. Alternatively, you can also safely buy gold from reputable independent gold dealers like Degussa, Pro Aurum and Philoro, among others.
6. Buy bulk
As a general rule, buying many small gold bars or coins is more expensive than buying the same weight in gold as a single bar or coin. That is because minting and retail markups in relation to value are highest for small coins and bars and lowest for large denominations.
Example: In June, 2023, a 1-gram gold bar cost 68 Swiss francs at a Swiss gold dealer. A 1-kilogram gold bar cost 57,569 francs at the same dealer on the same day. At those rates, if you were to buy 1000 x 1-gram gold bars, you would pay 68,000 francs – that is more than 10,000 francs more than you would pay for the same amount of gold minted as a 1-kilogram bar (Prices courtesy of Gold.ch).
7. Ignore face value
While a select few antique coins do have historical or collectible value, many gold coins and bars have little value above their weight in gold. Collectible coins and bars often come with high minting fees, and unless you are interested in them as a collector, they are best avoided. Stick to basic, non-exclusive gold bars and coins that are minted by well-known refineries and have the lowest markup above their gold weight.
More on this topic:
Factors which affect the gold price explained
Swiss precious metal accounts explained
Compare Swiss stock brokers now