Should you invest in gold?

Persistent economic uncertainty and unrelenting inflation have created a scenario where getting a return on our savings is no easy task. Against this backdrop of uncertainty, precious metals are considered a low-risk investment and gold the safe-haven asset par excellence. Carol Santacruz, 11Onze agent, explains it.

 

The inflation protection offered by precious metals is based on their intrinsic value, which carries no credit risk and cannot be inflated. A unique feature that makes them particularly attractive for diversifying our investments in times of crisis.

Also, gold’s tendency to rise in value when there is uncertainty in the markets explains the continuous increase in its price over the last three years, and confirms it as the most popular safe-haven asset in the face of a possible new financial crisis in 2022.

In this video, agent Coral Santacruz explains the value of precious metals as an investment and what factors to take into account.

If you want to discover the best option to protect your savings, enter Preciosos 11Onze. We will help you buy at the best price the safe-haven asset par excellence: physical gold.

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What does it mean if a piece of gold is 18 carats or 24 carats? Traditionally, goldsmiths have used carat as the unit for determining the purity of gold, but in the investment world, thousandths have become the standard for indicating the quality of this noble metal.

 

Gold, which corresponds to the chemical symbol “Au,” is the most ductile and malleable of the noble metals. So much so that, by stretching a single gram, we can make a wire up to 2 km long.

The fact that it belongs to the noble metal family gives it some very special characteristics, as Nuria Rambla, executive assistant at 11Onze, explains, since these metals “do not oxidise in air or water, are unalterable over time, do not combine easily with other substances and resist acids well.”

What we know as raw gold is found in nature in the form of grains or nuggets mixed with other materials. It is then “put through a chemical and high-temperature process” to obtain what we call “pure gold.”

Carats or thousandths?

The purity of gold can be established in carats or in thousandths. The first measure is the one that has traditionally been used in jewellery, while in the world of investment the thousandths has become the norm.

If we measure it in carats, pure gold has 24 carats. This means that, out of 24 parts, 24 are gold. However, 18-carat gold has 18 parts gold and 6 parts other metal. As pure gold is very soft, it is common for jewellers to lower the purity by making alloys with other metals to make their goldsmiths’ pieces harder and more consistent.

If we measure it in thousandths, pure gold has 1,000. In any case, as Nuria Rambla points out in the video, 999.9 is considered to be “pure gold.” In the investment world, this gold can be found in bars or bullion coins. The former can weigh “from 2 grams to 1 kg”. As for the coins, they are issued by mints, which must state “the weight and purity”.

 

If you want to discover the best option to protect your savings, enter Preciosos 11Onze. We will help you buy at the best price the safe-haven asset par excellence: physical gold.

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Is it safe to buy gold and why do investors choose to buy it? In times of economic instability, when the financial system and the global economy are faltering, buying gold makes more sense than any other asset. Sara Casals, from the 11Onze product team, explains why.

 

Gold continues to be the safest bet for protecting our savings and even for making a profit,” Sara Casals says. This explains, according to the product team expert, why gold has represented a very important part of the strategic reserves of central banks for many years. “It must be made clear that when we talk about security in the purchase of gold, we are talking about physical gold, and not as an investment in digital funds or through funds or shares in the mining sector,” Casals clarifies.

Physical gold, he says, will always have value and will survive the passage of time. “Gold is a safe haven because of its ability to preserve wealth,” the product team member says. Therefore, when inflation is expected to rise, one of the preferred assets is gold, which is also highly liquid. Want to know more about it? Just watch the video below.

If you want to discover the best option to protect your savings, enter Preciosos 11Onze. We will help you buy at the best price the safe-haven asset par excellence: physical gold.

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84% of the country’s population resides in flats, versus 15.2% who do so in houses, but that doesn’t mean you can’t have a beautiful space. In rural areas, as in the rest of Europe, single-family homes (68.1%) predominate compared to flats (31.9%) according to Idealista.

 

After suffering a pandemic, people look for and appreciate having a terrace, a balcony, bigger or smaller, but having the possibility to go out and be able to breathe.

If you want to live in Barcelona, you have many amenities, but statistically homes are usually smaller and with fewer outdoor areas to enjoy. 

In Catalonia there is a very high percentage of people who live in flats instead of houses.

Tips for turning your balcony into a magazine terrace:

  • The first tip is to fix the floor. You can choose artificial grass, a wooden floor, or a white floor, which will give you more space. Grass can make you feel like you’re next to a pool, but be aware that you’ll need to do more thorough maintenance. A wooden floor is easy to install and also gives a lot of warmth. You can combine grass and wood, and even add white stones somewhere. I bet you can already imagine it. The most important thing is that, as the space is reduced, the cost will not be excessive.
  • Once you have the floor ready, we will continue with railings. If there is nothing that gives you privacy, we recommend that you buy large wicker baskets and put some plants in them, so you avoid being seen from the street. They can also be aluminium or wooden pots. With the excuse of going out to water them, you can enjoy a nice break.
  • Another alternative is to place bamboo or similar to cover or decorate, and you can install small lights to illuminate them at night.
  • We continue with the table. In the market, you will find a myriad of small tables that can be folded. Some you can put on the wall and, when they are not used, you can fold them and, when it is time to go out and have a coffee, you can unfold them with a single gesture. Round, square, for corners… Depending on the space available, you will find the one that best suits you.
  • The same will happen to you with chairs: there are foldable chairs, ideal for small spaces where they do not always have to be unfolded. Let’s make a stop: you can give a very personal touch here. Add some coloured pillows now that summer is coming, and you can change them from time to time. There are some very cheap ones; smooth ones are also a fantastic alternative and, if you are more daring, you can choose a more intense colour, even if it is single-coloured, which will create a very nice atmosphere.
  • If you decide you don’t want a table or chairs, but your balcony is a quiet area instead, add a couple of armchairs or even a hanging hammock and a pillow, and you can enjoy a morning of reading or an evening with a glass of wine or cava.

Add a little colour and nature

Surely you’ve heard of them vertical gardens: if you have a blank wall, you can also put some white shelves and add some pots with small green flowers. There are many examples where you will find your inspiration, and they are very easy to install.

As we know, the details make the difference. Once you have made the most important changes mentioned in the previous points, add candles, chandeliers, small light strips, a small rug, a pouf…

And why not make a small urban garden? No matter how small, you can definitely add a pot with some aromatic plants such as basil, mint, parsley, rosemary… The smell when you go out will be so pleasant and, at the same time, you can enjoy the perfect natural seasoning for your salads.

 

Do not let the sun be a problem

In case of not having an awning (although they last for many years, this may not be the time to make this expense), you can find solutions such as awning fabrics that are fastened to the wall.

If your budget is small, don’t worry, you will surely find small shops near home with all these types of objects that we have mentioned. You can also find all these items in larger supermarkets.

After reading this article, you surely feel like making these changes and improving your terrace. Take advantage now that the good weather is coming and invite a couple of friends to enjoy it.

 

11Onze is the fintech community of Catalonia. Open an account by downloading the super app El Canut on Android and Apple and join the revolution!

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The entry into force of the Basel III regulations introduced new regulatory standards with the aim of strengthening supervision and reducing risk-taking in the banking sector. Even so, it aims to limit speculation in gold investment through derivatives, which allowed the creation of a bubble based on the issuance of securities not backed by physical gold.

 

The 2008 financial crisis made it clear that banks did not have sufficient reserves to cope with an economic downturn and to cover the risks. This led to the failure of large banks and financial institutions, spurred by the collapse of Lehman Brothers. The domino effect resulted in one of the biggest global economic crises in history.

In response, the Basel Committee on Banking Supervision (BCBS) developed and approved a set of regulatory measures under Basel III, which impose requirements on the banking sector to implement asset policies designed to reduce the likelihood of a repeat banking collapse.

A large part of these requirements relate to bank capital buffers, stress testing, or market liquidity and, as with the Committee’s other standards, members are committed to implementing and enforcing them in their national jurisdictions. The set of measures is not expected to be fully implemented until 2023, but the rules on bank liquidity structures were applied to European banks from 28 June 2021.

 

Reserves sufficient to cover 85% of unallocated gold

Investment funds, futures contracts, ETFs or other securities that have gold as an underlying, but do not allocate an amount of physical gold bullion or coins to investors have allowed the same speculative model based on FIAT money. The new regulation aims to end or limit this business model based on the issuance of securities backed by a quantity of gold that does not actually exist, as it can generate financial bubbles that trigger many economic crises and subsequent bank collapses.

Thus, the regulation reclassifies physical, allocated gold as a Tier 1 asset (the safest tier), comparable to cash, while it continues to categorise paper gold, or unallocated gold, as Tier 3 (the riskiest tier). In addition, it obliges financial institutions to hold capital buffers of 85%, previously 0%, to secure precious metals financing and clearing transactions.

The possible consequences of the reclassification of physical gold into a safer asset may trigger the allocated gold market, while unallocated gold becomes a less desirable form of investment. Still, the tendency for gold price manipulation should diminish, at least in the futures markets, because state manipulation is another matter.

Time will tell how effective this new regulation will be in preventing banks and financial institutions from playing Russian roulette with money that is not theirs. A speculative game where taxpayers always end up paying the price. In any case, the value of physical gold as a safe haven asset par excellence is confirmed.

 

If you want to discover the best option to protect your savings, enter Preciosos 11Onze. We will help you buy at the best price the safe-haven asset par excellence: physical gold.

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The pandemic we have experienced over the past two years has been historic and, although it is still affecting the economy, it is clear that stock markets have picked up the pace in 2021. Even so, it is unclear whether we can expect the same in 2022. What will the investment trends be like in a year that is expected to be marked by inflation and the Omicron variant?

 

Market volatility and instability caused by uncertainty and the constraints caused by the pandemic will not leave us in the New Year. Even so, the emergence of new investment trends, alongside more established assets such as cryptocurrencies, which have not lost their popularity, will be key to defining a 2022 in which the consumer is expected to spearhead a recovery.

It is expected that, in addition to the stock market gains experienced over the past few years by technology companies, there will be a growing interest in sustainable finance and ESG in investment portfolios.

As 11Onze’s senior product manager Jordi Sanchez explains, “before investing, we have to bear in mind that restrictions and inflation slow down and damage the economy.” But following a trend already seen in 2021, “aspects such as technology, equities, sustainable investment, and raw materials will be the big bet for 2022.”

To find out in detail what risks and trends we need to take into account when investing our money this year, you can see the rest of the investment advice and forecasts offered by Jordi Sánchez in the video below.

If you want to know more about superior options to make your money profitable, go to Guaranteed Funds. From 11Onze Recomana we propose you the best options in the market.

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Mutual funds are a booming financial instrument, which generally offered high returns last year. However, the current uncertainty is increasingly calling into question the trend of recent years to replace more conservative options with riskier ones.

 

At the end of 2021, the estimated assets of investment funds and investment companies worldwide exceeded 61 trillion euros. To get an idea of the volume, suffice to say that it is equivalent to three quarters of the world’s GDP. In Spain, the figure reached 620 billion, 18% more than in 2020, and its profitability in the year as a whole exceeded 6%, according to data from Inverco, an association that brings together collective investment entities and pension funds in Spain.

In percentage terms, mutual funds and investment companies already represent 15.7% of the financial savings of Spanish families, a percentage that is only surpassed by Belgium among the large EU countries, with 17.4%. In Italy, they account for 15.1%, in Germany 12.7% and in France less than 5%.

This is partly explained by the fact that mutual fund holdings in Spain have tripled over the last decade. On the other hand, the investment horizon of savers in the long term (more than three years) has increased significantly in Spain from 35% to 49% in just two years.

However, we cannot lose sight of the fact that deposits and cash still account for most of the financial assets of Spanish households (41%), a percentage that is only surpassed by Portugal (48%) among the major European economies. In France, they account for 29%, in Italy 32% and in Germany 39%.

 

Different products for different investors

Worldwide, 47% of the assets of investment companies and funds are in equities, 20% in bonds and the remainder is divided equally between mixed and money market products, which invest in the short term in a given currency. 

However, this distribution varies considerably from one country to another. For example, while equities account for 59% of the total in the United States and 51% in the United Kingdom, globally in Europe they account for only 34%. And there are also considerable differences in mixed products, which in Spain are the second most important, with 31% of the total, while in the United States they account for only 6%.

Over the last 15 years, Spanish investors tended to replace more conservative options with riskier ones. Thus, while in 2007 money market, fixed-income and guaranteed funds accounted for 64% of investment, in December 2021 they accounted for only 18% of the total.

 

Performance in question

However, this greater appetite for risk and variable returns does not seem entirely justified if we look at the long-term performance of mutual funds as a whole. An IESE study indicates that the average annual return of 562 funds that have been active in Spain over the last 15 years was only 1.91%. In fact, only 64 of these funds were more profitable than government bonds, and 68 of them had a negative return.

Moreover, in a context of rising inflation and economic uncertainty, in addition to the probable rise in interest rates by the European Central Bank and the U.S. Federal Reserve, doubts about the evolution of equities arise. For this reason, some voices point out that guaranteed investment funds can be a good option for investors seeking an appropriate balance between risk and return.

 

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The energy crisis and global economic uncertainty has boosted the purchase of precious metals such as gold and silver. The tax season starts on 6 April, so it is a good time to remember how precious metals are treated for tax purposes.

 

The central banks of several countries are increasing their gold reserves exponentially, but there has also been an increase in demand for this safe-haven asset from people who want to protect their savings in the face of an inflationary economic scenario that has no end in sight. Even so, more and more investors are including precious metals in their portfolios in order to diversify their returns.

However, before investing in gold or any other precious metal, it is important to consider what taxes are payable when buying or selling these highly valued commodities in times of crisis. Taxation can vary depending on whether you are buying physical gold or digital gold, the purity level of the metal, and other factors to consider when assessing the potential returns on your investments.

 

Investment gold bullion and gold coins

Firstly, we need to be clear that we are not talking about ordinary precious metals, such as those in jewellery or industrial sectors, but about precious metals of investment value. This distinction is important because according to the European Union decree 77/388/EEC, investment gold does not pay VAT either on purchase or sale.

The Tax Agency defines this special scheme for investment gold as “a compulsory scheme, without prejudice to the possibility of waiver for each transaction, applicable to transactions involving investment gold where such transactions are generally exempt from VAT, with partial limitation of the right to deduct”. In other words, the current VAT Law establishes certain requirements for it to be considered investment gold.

Therefore, investment gold will be exempt from paying VAT as long as it is physical gold, that is, gold bars or coins, such as the gold we offer through Preciosos 11Onze. In addition, this gold must meet minimum purity requirements: 99.5% in the case of bullion, and 80% in the case of coins. Bullion and coins that do not reach this purity will have to pay VAT at 21%, the same rate that applies to the purchase of other precious metals.

 

Income tax

Silver and other precious metals pay VAT like any other product, and each country applies its own tax rate, 21% in the case of Spain. Therefore, as investors, we have to bear in mind that these are different investments from gold, and often more speculative.

In terms of personal income tax (IRPF), any sale of gold, or any other precious metal by the taxpayer, has to be included in the tax return, and will be taxed according to the capital gains or losses generated by the operation, by the taxable savings base.

In this way, if a capital gain has been achieved with the operation, it will be necessary to reflect it taking into account the purchase price, including expenses, and the sale price, excluding expenses, with applicable rates depending on the amount.

 

If you want to discover the best option to protect your savings, enter Preciosos 11Onze. We will help you buy at the best price the safe-haven asset par excellence: physical gold.

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Throughout history, governments and their central banks have protected countries’ reserves by buying gold. Even so, in the face of economic uncertainty caused by the health crisis and runaway inflation, they have increased purchases in recent years.

 

Data published by the International Monetary Fund (IMF) confirms that central banks’ demand for gold recovered in 2021, with an 82% increase over 2020. Net purchases of gold by central banks amounted to 463 tonnes in 2021. This represents a significant pick-up in demand from this sector after a decade low of 255 tonnes in 2020, and the twelfth consecutive year of net purchases, during which central banks have bought a net total of 5,692 tonnes of gold.

Although central bank demand is often driven by policy rather than market demands, and therefore may be less predictable than other sources of gold demand, an upward trend is confirmed. A phenomenon that is nothing new if we are talking about emerging countries or countries not aligned with Western geopolitical interests, but to which a whole series of central bank buyers from developed markets were added in 2021.

For example, the Monetary Authority of Singapore (MAS) increased its gold holdings by just over 26 tonnes, a 20% increase, the first increase in at least 21 years. “The change in gold holdings is a result of MAS’s ongoing and continuous efforts to ensure that the Foreign Official Reserves portfolio remains highly diversified and resilient across economic and market conditions,” a MAS spokesman said.

 

Russia and China boost gold purchases

Economic sanctions imposed on Russia have prompted the Russian central bank to announce it will suspend gold purchases from banks to meet rising household demand for the precious metal and weather the storm in Russian markets. The abolition of value-added tax on these transactions, coupled with the rouble’s plunge to record lows, is spurring gold purchases by a population that wants to protect its savings.

However, both Russia and China have been increasing their gold reserves significantly for years. China almost certainly owns far more gold than anyone else, including the United States. We have seen many examples in recent decades of the latter country exploiting and abusing the dollar’s status as the world’s reserve currency to punish other countries contrary to its economic interests, thus accelerating the process of de-dollarisation and the creation of alternative gold-based monetary systems.

A process that is accelerating thanks to the conflict in Ukraine, and to the collaboration between Russia and China, not only to counteract the sanctions of the United States and the European Union, but also to ensure that the days of the hegemony of the Western monetary system are numbered in a multipolar world in which the Asian continent has more and more weight in the global economic balance.

In short, the wide range of purchases in 2021 has shown that there continues to be a significant demand for gold as a safe-haven asset, and the upside performance of this metal during periods of crisis has become the main reason for central banks to hold gold. A financial protection resource that is not exclusive to central banks, but is also available to everyone.

 

If you want to discover the best option to protect your savings, enter Preciosos 11Onze. We will help you buy at the best price, the refuge value par excellence: physical gold.

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Having a deposit in a Spanish bank nowadays means not only getting a low return on our savings, given the low-interest rates, but also being covered by the Deposit Guarantee Fund (FGD). Currently, the FGD has about 4.2 billion euros at its disposal, against the 958.9 billion euros that customers have on deposit.

 

In 2021, according to data provided by the Bank of Spain, the accumulated level of deposits reached 958.9 billion euros at the end of 2021, a new all-time high. Even so, it should be noted that the level of financial resources accumulated by the Deposit Guarantee Fund, and available in the deposit guarantee systems, amounted to 4,191 million euros in 2020, which represents 0.5% of guaranteed deposits to this date.

Clearly, therefore, the DGF is not in a position to cope with bank failures. The monstrous disproportion between money deposited and guarantee is pushing many savers to look for safer options. Even more so when the benefit obtained by having money in a Spanish bank is negligible, as we analyse in this article. Theoretically, the Deposit Guarantee Fund would have to guarantee up to 100,000 euros per individual or legal entity, but it is mathematically impossible for them to do so because the money reserves are exactly half of what they should be. For this reason, given the context of inflation that bites into savings and seeing the low profitability and security offered by traditional banks, it is necessary to look for safer options for our money.

 

Guaranteed Funds guarantee 100% of capital

Guaranteed investment funds can be a good option if we want to diversify our savings and, at the same time, ensure a certain return. As the name suggests, they guarantee all or part of the capital invested, as well as a predetermined return for a certain period of time. Normally, these are funds that have insurance that guarantees the totality of the money regardless of the amount.

Therefore, the question to ask yourself is: is there any fund that generates high returns and guarantees 100% of the investment and returns? If you want to find out about superior options for making your money profitable, go to Guaranteed Funds. From 11Onze Recommends we propose the best options.

 

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