Gold. A symbol of opulence, stability, and history. For centuries, societies across the globe have been mesmerized by its radiant allure. My recent fascination, however, has been with not just any gold, but the allure of holding tangible, minted 24k pure gold bars.
The Timeless Value of Gold
Here’s a comprehensive price chart showcasing gold’s historical performance against the Swiss Franc (CHF). The left column represents the price per kilogram, while the right column details the price per troy ounce (equivalent to 31.1 grams). Keep in mind that for precious metals, “one ounce” refers to a troy ounce, which is 31.1 grams, not the imperial ounce of 28.35 grams.
The relationship between gold and the U.S. dollar (USD) is typically inverse. When the USD is strong compared to other major currencies, the price of gold tends to decrease in dollar terms. This happens because a stronger dollar means that it takes fewer dollars to buy the same amount of gold. Conversely, when the USD is weak, the price of gold in dollar terms often increases.
Gold does not earn interest or dividends. When interest rates are higher, other investments that yield a return become more attractive, and gold, which doesn’t produce a yield, becomes less appealing. Therefore, when central banks, especially the U.S. Federal Reserve, raise interest rates, it can lead to decreases in gold prices. Conversely, in a low-interest-rate environment, gold becomes more attractive since the opportunity cost of holding gold decreases.
The chart below shows the price of gold in CHF per ounce.
Suppose you invested $1,000 monthly into global equities, gold, and cash. Let’s evaluate the potential growth of your investments over time. The table displays the cumulative amount you’d accumulate, along with the annualized return for each investment.
|1986-2023 (37 years)||$3,932,489 (9.27%)||$2,458,119 (4.67%)||$1,109,892 (3.07%)|
|2003-2023 (20 years)||$797,657 (9.30%)||$599,478 (8.36%)||$354,299 (1.32%)|
|2013-2023 (10 years)||$228,388 (10.00%)||$189,359 (1.12%)||$151,659 (0.99%)|
|2018-2023 (5 years)||$93,538 (8.11%)||$88,342 (7.21%)||$77,044 (1.64%)|
Unlike stocks or bonds or fixed deposits, the radiant luster of a gold bar offers an almost visceral satisfaction. While equities offer attractive long term returns, there’s an undeniable appeal to owning gold that has retained its value through millennia, especially in today’s volatile times as gold is considered a safe haven.
Switzerland’s Golden Legacy
While many countries value gold, Switzerland has a special relationship with this precious metal. Here, gold bullion isn’t just a commodity; it’s currency. This unique status ensures that there are no customs duties or value-added taxes (VAT) on gold purchases.
Switzerland’s commitment to gold isn’t just in its financial policies. The country is home to some of the world’s most prestigious gold refineries. Consider:
- PAMP (Produits Artistiques Métaux Précieux): A beacon in gold refining, PAMP was founded in 1977 in Ticino, Switzerland. Over decades, it has set industry standards, particularly known for its beautiful designs like “Lady Fortuna.”
- Metalor: An emblem of endurance and expertise, Metalor’s legacy stretches back to 1852 in Neuchâtel. The acquisition by the Japanese company, Tanaka, in 2016 only enriched its global reach.
- Valcambi: With roots since 1961 in Balerna, Switzerland, Valcambi showcases Swiss precision and dedication. The acquisition by Bengaluru-based Rajesh Exports Limited in 2015 further broadened its horizons. Update: There is a report from Swiss public broadcaster RTS indicating that Valcambi continued to import gold from precious metal dealer and refiner Kaloti after 2019 that have been accused of money laundering and trading in gold from conflict areas.
- Argor-Heraeus: Since 1951, this Chiasso-based refinery has epitomized Swiss quality. Once owned by the banking titan UBS, it now operates under the German technological group Heraeus.
If you’re still on the fence, here are eight compelling reasons to consider purchasing gold in Switzerland:
- Reputation for Quality: Switzerland has a long-standing tradition of producing high-quality gold bars and coins. Renowned refineries like PAMP, Metalor, Valcambi, and Argor-Heraeus are based here, ensuring that you’re getting gold products of the highest caliber.
- Favorable Tax Regime: One of the significant benefits of buying gold in Switzerland is that gold bullion is considered a currency equivalent. This means there are no customs duties or value-added tax (VAT) on gold purchases, making it more cost-effective than in many other countries.
- Political and Economic Stability: Switzerland is known for its neutral stance, robust banking system, and economic stability. This makes it a safe haven for investors looking to buy or store gold.
- Privacy and Discretion: Swiss regulations and business culture place a high value on client confidentiality. For those looking to make discreet purchases, Switzerland provides an environment that respects buyer privacy.
- Storage Solutions: Switzerland offers world-class storage facilities, often in secure vaults deep within the Swiss Alps. These provide optimal conditions for gold storage in terms of both security and preservation.
- Historical Precious Metal Market: Switzerland has a deep-rooted history in the gold trade and has been a hub for gold trading for centuries. This ensures a sophisticated and mature market for buyers.
- High Liquidity: The well-established gold market in Switzerland means that buying and selling gold is a smooth process, ensuring liquidity for investors.
- Diversification: Investing in Swiss gold allows individuals to diversify their investments geographically, reducing the risks associated with economic downturns in their home country.
The Challenge of Buying Gold in Switzerland
With such renowned refineries, one might assume buying gold in Switzerland is straightforward. But here’s the catch: you or I, as retail customers, can’t just walk into these refineries and buy gold. You’d either need a bank account with giants like UBS or Credit Suisse or consider purchasing online.
Before buying, it’s important to ensure the gold is genuine. Since I’m not an expert, I need to buy from a trusted source.
Where to Buy Gold Online in Switzerland
While researching, I came across several Swiss-based reputable online dealers like GoldAvenue.com (recommended by PAMP), Degussa, geiger-edelmetalle.ch (sells Valambi and Argor-Heraeus) and Philoro. The convenience of online buying comes at a price, though. Expect shipping fees of around CHF10-14 to places like Geneva.
After thorough scrutiny, my options narrowed down to UBS’s Kinebar and PAMP from GoldAvenue.com.
PAMP isn’t just a refinery—it’s an institution. Here’s what made me gravitate towards it:
- Unwavering Brand Recognition: PAMP stands as one of the most globally acknowledged refineries. Owning a bar from PAMP is akin to holding a piece of art.
- Stellar Quality Standards: Their bars are not mere metal but a testament to unmatched craftsmanship and precision.
- Unparalleled Security: Each PAMP bar comes with unique security features, from a distinctive serial number to the Veriscan™ feature, a revolutionary method to thwart counterfeits.
- Artistry that Dazzles: Apart from its unmatched quality, PAMP is renowned for its designs. The iconic “Lady Fortuna” remains a symbol of its commitment to beauty.
GoldAvenue.com, the sole recommended retailer by PAMP, is based in Geneva. Unfortunately, personal pickups aren’t allowed. Orders must be placed online with added shipping and insurance costs as well as VAT on these services.
Still, their stellar reputation, further bolstered by high scores on platforms like Trustpilot, ensures they remain a top choice. If you too are intrigued by the world of PAMP gold, consider exploring GoldAvenue.com. And if you wish to embark on this golden journey, don’t forget to use my referral link: https://www.goldavenue.com/en/r/23ec8d4862.
How to Buy Gold in Geneva, Switzerland
With GoldAvenue.com’s impeccable reputation, they remain a top recommendation for future purchases. But for my immediate need, I turned to UBS. Their process was direct: visit their Geneva branch (UBS, rue de la Confederation 2, 1204 Geneva), choose your gold, and purchase. Simple, efficient, and satisfying.
With the UBS Banking App, you can preview gold prices in real-time. However, when purchasing physical gold you need to buy it from UBS directly (not through the App) and anticipate a markup of approximately 2% over the app’s listed price.
Selecting the right gold size for purchase can be a balance of budget and future considerations. While your budget plays a primary role in determining the size of gold you can afford, it’s essential to understand the premium costs associated with different sizes. Smaller-sized gold tends to have a higher premium per gram compared to larger sizes, making them somewhat pricier in that respect.
However, think about the long-term aspect. If you ever decide to sell your gold, having a large piece means you’d need to part with the whole amount. Unlike currency, where you can just give a portion of what you have, with gold, you can’t simply chip off a corner and sell it. This might limit your flexibility in times when you might only want to liquidate a small portion of your gold asset. So, when making your choice, it’s worth considering both your current budget and your future financial strategies.
Here is a step-by-step processing in buying gold at UBS.
- Establish an Account: Before you can buy gold, you must have an active account with UBS. If you don’t already have one, visit a local branch or their online portal to open one.
- Visit the Bank: Head to a UBS branch that offers gold transactions. One such location, for instance, is UBS, rue de la Confederation 2, 1204 Geneva. They open weekdays from 10am to 5:30pm (on Monday they start at 9am).
- Navigate to the Gold Section: Upon entering, make your way up the stairs, then turn left. Look for signs indicating “L’or,” which translates to “Gold” in French.
- Wait for Authorization: You’ll notice several securely closed doors. Wait until a door’s light turns green, indicating it’s available for entry.
- State Your Preferences: Once inside, you’ll find yourself in a private room with a bank counter. Inform the bank representative of the type and weight of gold you wish to purchase. Remember, while you can specify your preferences, the ability to choose a specific serial number may not be possible.
- Complete the Transaction: Provide your UBS bank card along with a valid form of ID. Once verified, the gold’s price will be deducted from your account.
- Collect Your Gold: After payment, the representative will hand over your chosen gold item, complete with verification and, where applicable, its certificate of authenticity.
If you’re considering selling your gold, UBS is ready to buy it back. Just remember, they only purchase their own brand and won’t accept gold from different manufacturers.
Owning physical gold, especially a 24k minted bar, is a unique experience. While UBS provided the most straightforward route for my purchase, the world of gold is vast, and the choices are plenty. Whether you choose a minted bar for its financial stability or the sheer joy of holding tangible wealth, the allure of gold remains timeless.
Here’s a snapshot of the very first piece of gold I purchased.
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