Investing in gold.

Gold is scarce, does not corrode and is recognisable and tradable everywhere. Above-ground stocks grow only 1.5 to 2 per cent a year through mining, so supply barely responds to a demand spike.

Unlike a share or a bond, gold has no counterparty: no company can go bankrupt and no government can refuse repayment. That is why central banks hold it as a reserve. The trade-off is that gold produces nothing; the return comes entirely from price change.

The dominant medium-term driver is the real interest rate. Rising real rates make a non-yielding metal less attractive than a bond; falling or negative real rates remove that opportunity cost and pull capital in.

The dollar matters too. Gold is quoted in dollars, so a stronger dollar usually weighs on the price — and a euro-based investor can see the euro price rise while the dollar price falls.

Since 2022 central bank buying, mainly in Asia and the Middle East, has become a structural third driver. That demand is price-insensitive and has visibly raised the floor under the market.

Physical gold comes as bars from one gram to one kilo, or as bullion coins. Investment gold is VAT-exempt in the EU when it meets purity rules. Premiums shrink with size: 1 to 2 per cent on a kilo bar, over 10 per cent on a one-gram coin.

Exchange-traded products are the simplest route. In Europe these are ETCs — debt instruments backed by allocated metal in a vault. Check the ongoing charge, whether metal is allocated and whether redemption is possible.

Mining and royalty shares give leverage to the gold price but add company risk: strikes, cost inflation, politics and share dilution.

Physical ownership carries three costs investors underestimate: the buy premium, the dealer's buy/sell spread and storage, typically 0.3 to 1 per cent a year in an insured vault.

Allocated storage means specific numbered bars are yours and sit outside the custodian's estate. Unallocated is cheaper but is legally a claim on that firm.

In the Netherlands gold sits in box 3; in Belgium a gain from normal private asset management is generally untaxed. Investment gold is VAT-free across the EU, while silver, platinum and palladium are not.

Both are scarce and have no counterparty, but their behaviour differs: gold's annual volatility is roughly 12 to 16 per cent, bitcoin's three to four times that.

A common approach is a fixed allocation to both with periodic rebalancing, which enforces discipline without forecasting. Avoid treating physical metal as a short-term trading position — transaction costs make that structurally loss-making.