Interview with Businesstalk am Kudamm
Gold - Attractive and everlasting
6. Dezember | Asset protection
Gold - Attractive and Everlasting
Interview conducted by Daniel Hauser, Businesstalk am Kudamm
Today we talk to Andreas Wagner, Managing Director and Partner of Estably Vermögensverwaltung AG, about probably the most popular precious metal in the world – gold. Due to his many years of experience as an asset manager, he is exactly the right person to get answers to questions regarding the advantages of entering the gold business, the potential increase in value to be expected and more.
Gold is considered a safe haven in times of crisis. Rightly so?
Gold has often proven in the past that it lives up to its reputation as a safe haven. It has survived wars, economic crises, currency collapses and currency reforms as a medium of exchange and, unlike paper money, it is eternally durable and limited in quantity.
The value of paper money is defined by confidence in central banks and their ability to maintain its value. Gold, on the other hand, has a real intrinsic value and is a globally recognised means of payment.
Therefore, in our opinion, gold should be an integral part of every person’s overall wealth allocation. It is a store of value and helps investors to maintain their purchasing power in times of high inflation.
The gold price is close to a historic high. Is now the right time to enter?
Gold is at a historic high because paper currencies are losing their purchasing power. And this shows the strength of the precious metal. Especially in the current world of geopolitical and economic uncertainties, an entry into gold makes sense. The geopolitical tensions will not disappear and inflation will not return to the levels of past years.
The structural changes such as deglobalization, demographic trends, and also increasing costs against climate change will lead to permanently higher inflation.
Do you think gold is suitable for retirement provisions?
Gold is suitable as asset protection and serves to hedge against different scenarios such as currency reforms or phases of high inflation rates.
In the context of old-age provision, I would not rely exclusively on gold, but also take equities into account. With inflation rates of 4-6%, these are not only particularly suitable for preserving assets in the long term, but also for increasing them.
Since gold provides neither interest nor dividends, and shares perform better than all other investments over a long investment horizon, I would prefer shares in high-quality companies for old-age provision.
Besides gold, silver is also a popular precious metal. What is the difference between the investments?
Both gold and silver are popular investments. Gold is much more in demand in the financial world because central banks act as gold buyers and not as silver buyers on the market. Silver, due to its advantageous properties (conductivity, photosensitivity, antibacterial, malleability), is sometimes in great demand in a wide variety of industrial sectors.
Due to the high density of gold, storage is much easier than with silver. For €100,000, you currently get 1.8 kg of gold which is relatively easy to store, whereas you would have to store or transport around 154 kg if you invested in silver.
Unlike gold, physical investments in silver are subject to VAT.
The silver price usually follows the gold price. Is silver currently undervalued or gold overvalued?
The gold/silver ratio, which reflects the ratio of the price of gold to the price of silver, is currently over 80. This value is relatively high when you consider that there are only 20 times as much silver as gold on earth.
Moreover, the demand for silver is rising sharply. In the mobile phone industry alone, more than 300 tonnes of silver are processed annually. In the recent past, the increased demand has led to very sharp price increases. Considering these factors, one can definitely speak of an undervaluation of silver.
What options do private investors have to invest in precious metals?
Investors basically have the option of investing directly or indirectly in precious metals. On the one hand, investors can invest indirectly in gold via financial products such as funds, precious metal accounts, or certificates. Shares in gold mining companies are also an indirect investment in precious metals. Due to the additional company risk and the leveraged reaction too precious metal price fluctuations, this is certainly the riskiest method.
On the other hand, investors can invest directly in precious physical metals. Those who own gold or silver physically have no counterparty risk. We generally recommend investing directly and thus physically in precious metals.
You should always spread the risk, and the economic projects are also increasing liquidity on the market. How do you see the development of gold in the medium and long term?
We see the price of gold continuing to rise in the long term. In the short term, it may be different. However, the demand for precious metals is justifiably greater than ever in view of long-term high inflation rates and geopolitical tensions. We expect the shiny precious metal to appeal to more investors and increase its value accordingly.
Mr. Wagner, thank you very much for the interview.
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