Physical gold is increasingly attracting more Finnish investors. At the same time, understandable questions and concerns arise. How does investing in gold work in practice? Is gold a safe asset? Can it be sold quickly, and how does taxation work in Finland?
In this article, we will answer the most common questions that investors considering investing in gold ask.
How does investing in gold work in practice?
This question repeatedly arises in Finnish investor forums and economic discussions. For many, investing in gold may seem distant or complicated, even though it is actually a quite straightforward process.
Investing in physical gold means that the investor buys gold bars or investment gold coins from a reliable dealer. After the purchase, the investor decides how and where the gold will be stored. Gold can be delivered to the home, stored in a safe deposit box, or kept in a professional storage service.
The price of gold is based on the world market price and the premium associated with the product. Many are surprised to learn that investing in gold does not require a large capital or special market expertise. Physical gold is available in various price ranges, and investments can be made in a way that suits one's own finances and at one's own pace.
What if the gold is stolen?
The security of physical gold primarily depends on the storage solution. Gold is not a riskier asset than other valuable items, but attention should be paid to its storage.
Common storage options include home storage, such as in a safe, bank safety deposit boxes, and separate professional safe deposit and storage services where gold is kept in monitored and insured facilities.
It is also important to keep gold in its original sealed packaging. Opening the seal can diminish the product's resale value and increase the need for authenticity verification later. Careful storage is an essential part of investing in physical gold.
Can gold be sold quickly?
Gold is one of the most liquid assets in the world. Physical investment gold is internationally recognized and always has a market.
Certified gold bars and well-known investment gold coins can be sold quickly both in Finland and internationally. Sales are not tied to stock exchange hours and do not require complicated processes. The price of gold is based on the current global market price.
This makes gold a flexible investment even in situations where funds need to be released quickly.
How does gold taxation work in Finland?
In Finland, the taxation of investment gold is clear.
Investment gold that meets the EU definition is exempt from value-added tax. When gold is sold at a profit, capital gains tax is paid in the same way as for other investments. The capital gain is calculated as the difference between the selling price and the purchase price. Alternatively, the acquisition cost assumption can be used if it is more favorable for the investor.
Gold taxation does not differ significantly from, for example, stock investment taxation, but the exemption from value-added tax makes gold an effective long-term value holder.
What if the price of gold falls?
The purpose of gold is not to generate quick profits, but to preserve purchasing power over the long term. Price fluctuations are also part of the gold market, but historically, gold has maintained its value, especially in uncertain times.
Gold's role in an investment portfolio is often stabilizing. It acts as a counterbalance to stocks and other riskier investments, and its value is not directly tied to corporate earnings or economic growth.
Who is gold investment suitable for?
Investing in gold is suitable for a variety of investors. It is not just a tool for those with large fortunes, but also a possible option for the average saver.
Investors in gold are often long-term savers, investors looking to diversify their portfolios, individuals who value the tangibility of wealth, and investors who want to protect themselves from inflation. Physical gold is available in various price ranges, allowing for investment even with smaller amounts.
Does gold melt in a fire?
Gold's melting point is about 1,064 degrees Celsius. In a typical building fire, temperatures often rise to 600–900 degrees, sometimes briefly higher. This means that in most fires, gold does not completely melt.
Even if gold is exposed to very high temperatures, it does not burn or lose its chemical properties. Gold may change shape, but its value remains. Even melted gold can be purified and recast without losing the value of the metal itself.
This is what makes gold an exceptional asset. It withstands time and extreme conditions better than most other investment options.
Summary
Most concerns related to investing in gold involve security, liquidity, and taxation. Once these issues are understood, gold appears as a clear and manageable form of investment.
Physical gold is safe to store with the right solutions, quickly sellable, and has clear tax implications in Finland. Investing in gold is not speculation, but rather a long-term wealth management strategy.
