Many people wonder whether precious metals should form part of their investment portfolio. Not unreasonably, as while precious metals are traded on commodity exchanges, the fact someone can take delivery of their gold or silver (or platinum or palladium), makes this asset class feel somewhat different.
This article considers six key reasons ABC Bullion customers have chosen to invest in precious metals, and why ABC Bullion is an option worth considering.
Reason one: Diversification
Having a varied portfolio can help reduce risk if any one type of asset drops in value at a time someone plans to sell. This is why many financial advisors suggest allocating between 10% and 25% of a portfolio to precious metals.
Reason two: Political or economic uncertainty
Precious metals have historically been used as an asset to safeguard against political or economic uncertainty. ABC Bullion notes that this reasoning hasn’t changed even today.
Reason three: Ongoing demand
The global supply of precious metals is relatively constant. However, demand remains strong both by institutions such as central banks, SMSF trustees and individuals. Increasing demand from India and China – for cultural as much as investment purposes – means there is unlikely to be a glut of precious metals on the market to reduce the selling price anytime soon.
Reason four: Not linked to a currency
Fiat currencies are subject to government policy and intervention, which can change drastically due to political, economic and environmental change. Precious metals – particularly gold – cannot be debased as they aren’t directly linked.
Reason five: Tangible asset
Beyond cash, bullion is the only asset class that is both highly liquid and has a physical form. While many people look to bullion to protect against the variations in a currency’s value (among other things) for some, it also needs to be in physical form.
Reason six: Intrinsic value
For more than 6,000 years, gold and silver have been used by individuals, rulers and governments as monetary units of exchange, symbols of status and icons of power. Even now, this intrinsic value remains the same.
Why people choose ABC Bullion
ABC Bullion has been a cornerstone of the Australian physical precious metal market for over 50 years, having traded continuously since 1972.
ABC Bullion-branded products are made exclusively at ABC Refinery – which is accredited by the London Bullion Market Association (LBMA), Shanghai Gold Exchange (SGE) and the CME (COMEX) Group. Each of these bodies is a global leader in precious metals trading and requires the highest standards of bullion purity and integrity.
On top of offering ABC Bullion branded products, ABC Bullion distributes for major global mints including the Royal Australian Mint, Royal Canadian Mint, The Royal Mint (UK), South African Mint and PAMP.
ABC Bullion buys and sells precious metals with clients twenty-four hours a day. Prices on gold, silver, platinum and palladium are updated every 5 minutes and displayed prominently on the website, making it easy to calculate the precise value of a transaction.
Customers can track the value of their existing portfolio in real time via their online ABC Bullion account.
The range of bullion products on offer includes physical bars, coins and minted tablets, and pool-allocated metals. Both physical bars and pool-allocated options are ideal for SMSF investment.
The entry point for bullion is low, as investors can start buying into precious metals with as little as $50, using an ABC Bullion Gold Saver account – Australia’s first savings account for gold and silver.
All metals stored by ABC Bullion are fully insured and independently audited.
Private vaulting of bullion and other valuables is available via sister company Custodian Vaults.
ATO rulings on investing in bullion products – including ABC Bullion
While ABC Bullion doesn’t provide tax advice, literature suggests the Australian Taxation Office (ATO) considers bullion bars – like the ones ABC Bullion have produced at ABC Refinery – as investment-grade, and as such exempt from Goods and Services Tax (GST) when buying or selling.
Bullion bought and sold in Australia is also typically subject to Capital Gains Tax (CGT) if a profit is made on the sale. However, if the bullion has been held by the seller for more than a year, a reduction in the CGT payable can apply.
Should you invest in bullion?
That is a question beyond the scope of a general article. As everyone’s circumstances are unique, it is important to seek independent advice on whether investing in bullion is right for you.
If you do want to know more about what ABC Bullion offers, head to abcbullion.com for more information.
