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In a couple of years, my child will go to college. I want to save up some money for that time. I need to store that money in something that will preserve some value even after 5-10 years.

Therefore I want to buy a small quantity of gold (for 400--500 Euros) each month and store them in a deposit box in a bank.

What are effective ways to buy gold in Europe, especially Austria?

What I found so far:

GoldMoney

I looked at GoldMoney.com because it was endorsed by Peter Schiff as the easiest way to buy gold. However, the amount of sensitive data they ask you to open an account is tremendous. They want to know everything about you, as if they were the Gestapo.

I am not paranoid and have little concern with privacy, but even for me this was too much. The company seems to be located in Canada, hence European privacy regulations don't apply there.

I also have little trust in their ability to maintain a complex software system because their web interface looks like it was designed 15-20 years ago. Maybe their backend is better, but who knows?

Small gold bars

There are also gold bars you can buy for about 450 Euros on Amazon, like this one. That's actually a viable option.

The only thing that bothers me is their markup: This particular gold bar is sold at 455 Euros. That's 10 grams of gold. The market price of that same amount is 374 Euros according to Gold.de:

Screenshot from Gold.de

closed as off-topic by Chris W. Rea, Dheer, JoeTaxpayer Mar 23 at 2:48

This question appears to be off-topic. The users who voted to close gave this specific reason:

  • "Questions seeking product or service recommendations are off-topic because they tend to become obsolete quickly. Instead, describe your situation and the specific problem you're trying to solve." – Chris W. Rea, Dheer, JoeTaxpayer
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    Have you looked at ways of owning gold coins rather than bullion? Typically coins are available in major fractions of an ounce. – Ben Voigt Mar 22 at 20:23
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    "I need to store that money in something that will preserve some value even after 5-10 years." Then you shouldn't buy gold. A savings account would be better. See the last few years' price history on macrotrends.net/1333/historical-gold-prices-100-year-chart - it was $1900/oz just a few years back and is now worth substantially less. Gold is not a stable commodity. – ceejayoz Mar 22 at 20:28
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    (Side note: Schiff recommends GoldMoney not out of kindness towards you, but because he makes money from their silly pricing - he's an investor in them. goldmoney.com/corporate/bio/peter-schiff You should consider his and others' claims about the benefits of gold with a large grain of salt.) – ceejayoz Mar 22 at 20:31
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    @FranzDrollig: Yes, the price of a 1oz gold coin is higher than 1oz of plain gold metal. But both the purchase and sale price are higher, compared to your search for a small gold bar, where the purchase price is significantly above inherent value, and you can't hold to get above inherent value when selling. The important thing is not the premium on a coin, but the buy/sell spread. – Ben Voigt Mar 22 at 21:25
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    @ceejayoz: The purchasing power of gold is not harmed by inflation. There are other sources of price swings, which i made no claim about, but they are orthogonal to inflation. – Ben Voigt Mar 22 at 21:26
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I can find one-ounce gold coins in premium packaging at about 3% over spot. And I can find one-ounce gold bars in premium packaging at about 2% over spot. Guaranteed by the dealer but not in premium packaging can find one-ounce gold coins at about 2.5% over spot and one-ounce gold bars at about 1.5% over spot.

Most holders of gold do not use safe deposit boxes but use bullion vaults run by major security companies. And most gold dealers can arrange storage in a bullion vaults.

There is nothing wrong with the Goldmoney service. The advantage is that the unsegregated holding is less expensive to get into than a segregated holding. And their accounts represent gold held in bullion vaults.

There are also gold ETF's on the stock market. I suppose that vaulting expenses combined with ETF expenses is slightly higher. A gold ETF could price at a premium or discount but would probably just follow the gold price.

  • What is a segrated and unsegregated holding? – Franz Drollig Mar 22 at 21:34
  • An unsegregated holding just balances the total amount of gold vaulted with the total customer accounts. They use 400-ounce good-delivery bars for economy of scale. – S Spring Mar 22 at 21:36
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    The Sprott gold ETF has a tax advantage for U.S. residents. They can get the long-term capital gain tax rate on physical gold investments instead of a 28% collectibles rate. Or in any case, sell short-term and get the personal income tax rate. – S Spring Mar 22 at 22:33

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