Why Precious Metals?

 

In Asian culture precious metals have been one of the most important practiced investments. Also in Europe it was common to use precious metals as part of the investment practice since the last century until the late 80’s. Over centuries it was the rule of the thumb to keep approx 10% of one’s assets in physical gold or silver. During threatening and unstable times this percentage has been increased sharply for a short time period and its excess was sold off thereafter shortly.

You should hold on to these historical rules as it has proved to be correct over times. Gold and silver have demonstrated impressively their function as a solid currency stabilizer.

The trust in the worldwide paper money system, which mainly is not backed up by gold, is steeply on the decline – more devaluation of our money compared to gold and silver is expected and almost inevitable.

Which criteria an intelligent and safe precious metal investment has to fulfill?

Check whether the investment complies with these important points : 

  • Physical (coins or bars)
  • Storage (independent from banks)
  • Right to claim any time
  • Free of capital gains tax (after 12 months)
  • Free of VAT (applicable only for gold)
  • Possibility of partial sales (liquidity)
  • Accumulating investable
  • Safe Storage (in countries outside Europe and the US) 


Which form of precious metal investment offers are the best way in regards to effectiveness and safety?

 

We wish to point out that not all versions listed below are equal and not all versions will fit your strategy. Some of the listed investment schemes are also considered risky and therefore cannot be considered to provide investment protection.

 

Here the list of available investment options:

  • Investments with Certificates
  • Investments with ETF (Exchange Traded Funds)
  • Investments with ETC (Exchange Traded Commodities)
  • Physical Direct Purchase
  • Precious Metal Depots
  • Precious Metal Depots with Bank Account, Credit Carte and ATM
  • Precious Metal Depots in Connection with Investment


What are investments with certificates?

 

Certificates are unfunded, documented claims from a bank or any other institution. They are securities which are traded daily. Based on experience the trade with these certificates can be suspended due to strong price fluctuations or in times of crises. The buying and selling prices for such certificates can climb extremely which can lead to inability to make payment by the issuers. 


The following criteria are NOT fulfilled:

  • Physical (coins or bars)
  • Storage (independent from banks)
  • Right to claim at any time
  • Free of capital gains tax (after 12 months)
  • Safe Storage (in countries outside Europe and the US) 

These criteria are fulfilled:

  • VAT free (only for gold)
  • Possibility of partial sales (liquidity)
  • Accumulating investable

Conclusion: A certificate is a demand letter of precious metal. The precious metal is physically not existent. In case the issuer cannot fulfill the demand one will not receive money or a physical hand over of the precious metal. For that reason certificates are not suitable to secure your investment.


What are investments with ETF?

 

ETF’s (Exchange Traded Funds) are mainly traded at the exchange as an open investment of a special fund. This fund is managed passively and in case of a precious metal ETF it is exclusively invested in Gold or silver. Based on the German Investment Law ETF it is not permitted to be trade in Germany, however, foreign exchanges, like in Switzerland, are trading with ETF’s (i.e. ZKB Gold and ZKB Silver via the Züricher Kantonalbank).


The following criteria are NOT fulfilled:

  • Storage (independent from banks)
  • Free of capital gains tax (after 12 months)
  • Safe Storage (in countries outside Europe and the US) 

These criteria are fulfilled:

  • Physical (coins or bars)
  • Right to claim at any time
  • Free of VAT (applicable only for gold)
  • Possibility of partial sales (liquidity)
  • Accumulating investable

Conclusion: The precious metal ETF may be interesting for short-term investors; however, it does not provide unlimited ownership for the investor. There is limited access and the missing of 100% physical precious metal protection because of the involvement in precious metal lending business. Therefore ETF’s do not offer sustainable investment protection in times of crisis.


What are investments with ETC?

 

ETC’s (Exchange Traded Commodities) are mostly time unlimited, physically secured owners bonds issued by the respective issuer. Legally an ETC is a bond and for that reason there should be no credit risk. The ETC also allows daily trading at the exchange. One of the most well known ETC’s is XETRA.


The following criteria are NOT fulfilled:

  • Physical (coins or bars)
  • Storage (independent from banks)
  • Free of capital gains tax (after 12 months)
  • Safe Storage (in countries outside Europe and the US) 

These criteria are fulfilled:

  • Right to claim at any time
  • Free of VAT (applicable only for gold)
  • Possibility of partial sales (liquidity)
  • Accumulating investable

Conclusion: ETC’s are basically to be evaluated similar like ETF’s, however, the ETC has a potential issuer’s risk to consider, therefore ETC’s are not be considered a protection for your Investment.


What is a physical direct purchase?

 

Making a physical purchase means you buy the precious metal directly from the bank, at the coin dealer, at a precious metal dealer or over the internet. It normally is a direct purchase of smaller quantities which makes the purchase costs (i.e. additional costs for safe transport) comparably more expensive. Further there are the questions of storage or deposit facilities. Higher minting costs for gold and silver coins as well as applicable VAT (not for gold but 7% for silver coins and 19% for silver bars) make a direct purchase, even in larger amounts, not attractive. In addition there is a dealer’s margin between buying and selling prices depending on quantities – as less the quantity as larger the margin. For that reason partial sales deals are not very profitable.


The following criteria are NOT fulfilled:

  •   Free of VAT (applicable only for gold)

These criteria are fulfilled:

  • Physical (coins or bars)
  • Storage (independent from banks)
  • Right to claim at any time
  • Free of capital gains tax (after 12 months)
  • Possibility of partial sales (liquidity)
  • Accumulating investable
  • Safe Storage (in countries outside Europe and the US) 

Conclusion: Contradictory to all other versions of investment mentioned before the direct purchase of gold and silver is affected by capital gains tax unless the precious metal is in the procession of the owner for more than 12 months. Depending on the storage method, insurance and administration additional costs might apply. An effective protection of your investment is ensured.  


What are Precious Metal Depots?

 

The precious metal depots of AEC Group are unexceptional located outside Europe and the US – we are working solely Asia oriented. Our depots allow no access to third parties or authorities and are therefore safe from insight as well as confiscations. That guarantees the highest possible protection of your valuables and your investments – your depot is being traded as special fund.



What are precious metal depots with bank account, ATM and Credit Card?

 

In line with our aspiration to provide customer satisfaction we offer packages and varieties of different accounts which are directly linked to your precious metal depot. The offered accounts are providing different possibilities and currencies to ensure liquidity worldwide.



What are precious metal depots in connection with Investments?

 

The precious metal in your deposit is made available for the use of different types of investment. This way your precious metal is generating profits. The returns will be paid in precious metal as well and will be added to your existing deposit. Like with currencies you can use precious metals to facilitate your investment.