Since March, the international gold price has risen by nearly 300 US dollars / ounce, an increase of nearly 14%, and the price of domestic spot gold has risen from 480 yuan / gram to 550 yuan / gram. The sharp rise in gold prices has set off another gold investment boom in the market. So, what are the risks if you want to invest in gold?
What are the risks of investing in gold?
The price of gold has risen sharply, and although there is an opportunity to make money by buying gold, the risks brought by gold investment cannot be ignored.
First of all, the main risk of gold investment comes from the fluctuation of gold prices. As a commodity and investment product, the price of gold will not only rise but also fall. Once it starts to fall, it can fall a lot, for example, in 2013, when the price of gold fell by almost 30%. If the price of gold falls, you will inevitably lose money after buying.
If you buy some leveraged gold varieties, such as gold futures and spot gold on the exchange, once you encounter a drop in gold prices after buying, you may also suffer serious losses.
Therefore, investing in gold is the same as investing in stocks and funds, only if you can grasp the right investment direction to make money, but no one knows whether its future price will rise or fall, and no one can guarantee that the direction of their judgment is right, which is where the risk lies.
Of course, judging from the historical trend of gold prices, it is still mostly rising, so gold prices are also constantly hitting new all-time highs. It may be mainly because the currency used to measure the value of gold has been depreciating, and the value of gold itself is relatively stable, so the price will continue to rise under the depreciation of the currency.
But the problem is that the price of gold is not always rising, and even if the long-term trend is upward, many people may not be able to wait for it to rise.
Secondly, if you invest in physical gold, there is also liquidity risk. The so-called liquidity risk is that when you want to liquidate gold, you find that no one is willing to take it over, and you can't sell it with a thousand gold.
Although everyone loves gold, few people are willing to buy it if you want to sell it to others at a market price. After all, gold is a commodity, for non-professionals, it is difficult to distinguish the real from the fake, and no one dares to buy it from private hands.
Therefore, the best way to realize physical gold is to find an institution that sells gold to recycle it, or take it to a pawnshop to sell. However, whether it is recycled or sold, it is unlikely to give a market price.
For example, the current price of spot gold has exceeded 550 yuan/gram, while the recycling price of gold stores is only 540 yuan/gram, and it is very unlikely that it will be sold at the market price.
In addition, physical gold is at risk of a discount as long as it is bought. Because individuals can only buy physical gold in gold shops or banks, the price of gold in these places can be much higher than the price of gold in the spot market. For example, the current spot gold price is only 550 yuan/gram, while the gold price in gold stores has exceeded 710 yuan/gram.
If you buy gold at 710 yuan/gram in a gold store and ask the gold store to recycle the gold, you will immediately lose 170 yuan/gram, and if you want to make money, the price of gold must rise by more than 32%.
In short, although the sharp rise in gold prices may seem tempting, it is necessary to understand the risks before considering whether to invest. Even if you want to invest, you need to choose the right product.
So, if it were you, would you consider investing in gold?