Long-term investment: Rich return with gold investment
Gold, silver and other precious metals are considered safe investments because they are only available in limited quantities and, unlike money, cannot be created infinitely out of nothing.
But how has gold actually performed over the past 10 years? Has gold been able to meet the expectations of savers and investors?
We have done the math for you.
Satter gain: Gold up 40%
The annual average gold price in 2010 was $1,227.15 per troy ounce, or EUR 935.31 per ounce. Ten years later in 2020, the fine ounce of gold was now worth an average of 1,769.82 U.S. dollars or 1,548.96 euros.
Calculated on the average values of the two years, the value of U.S. dollars has thus risen by +44.2%. In Euro - this price is more relevant for Austrian investors - the gold price has climbed by +39.6% in the last 10 years.
10,000 euros invested in gold: What would it be worth today?
Calculating a premium of about 3.5% at Vienna Philharmonic , the 1/1 ounce coin cost on average about EUR 968.05 in 2010.
So for 10,000 euros - actually for only 9,680.50 euros, one could have bought 10 pieces of Vienna Philharmonic coins in 2010. Ten years later, in 2020, one would have already paid an average of EUR 16,031.74 for these 10 coins.
Successfully fighting inflation with gold
Everything is getting more and more expensive. This is not just a feeling, but is called inflation and is even desired in our monetary system. To measure inflation, we can refer to the consumer price index of Statistics Austria. Compared to 2010, we find an index value of 120.8 here for February 2021.
This means that in order to purchase the same goods and services that we would have received in 2010 for 10,000 euros in February 2021, we would now have to spend 12,080 euros.
So if we calculate this inflation out of our gold investment, we would have made a profit of 4,337.75 Euros over the last 10 years with the gold investment in 10 Philharmonics.
Top performance for safe investment
Certainly, some will now say that a higher return would have been possible with shares, funds, ETFs and other financial products. This cannot be denied at all. However, one should keep in mind that precious metals and exchange-traded securities do not fall into the same investment class.
With shares, you speculate that securities will develop positively, but there is always the risk of a complete failure.
Gold, on the other hand, is primarily aimed at preserving value. It is about protecting one's own assets against loss of value. Of course, the price of gold can also fall. Therefore, you should not invest your entire assets in gold. However, there is no risk that gold will suddenly be worth nothing.
Gold is therefore a very safe form of investment and, as an investment in kind, is more comparable to savings accounts. And in comparison, gold has performed much better in the last 10 years, because it was not only an anchor for inflation, but also yielded an actual return. Money that has been sitting in savings accounts for the last 10 years, on the other hand, is actually worth less in real terms today.
Conclusion: Gold as a good form of investment
We at Gold&Co. are happy to advise you if you want to buy precious metals as an investment. On our pages you will also find background information on the current gold price development, our long-term gold price forecast and of course the always current prices for gold, silver & platinum in coin and bar form.
We advise our clients to invest about 10-20% of their assets in gold, silver, platinum and other precious metals. Not to speculate with, but as a hedge against inflation and currency devaluation.
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