Golden Rules for Gold Investments

How private investors can buy gold safely - new guidelines drawn up with support of BayernLB…

Munich - BayernLB supports the World Gold Council in its global initiative for the responsible management of gold investments. The WGC, the market development organisation for the gold industry, launched its first German-language Gold Investor Guidance for private investors which was drawn up with support of BayernLB’s precious metals experts. The publication was tailored for the German market. Its objective is to inform investors on how to buy gold safely.

The guide helps private investors to ask the right questions and understand which products are best suited for them before purchasing gold. It provides information on the most important investment models such as gold bars and coins, numismatic pieces and collector coins, gold jewellery as a form of investment and externally managed gold investment products.

The WGC consulted external experts from the precious metals industry from over 15 countries to help preparing the draft. In Germany - currently the country with the world's second-largest demand for gold coins and bars after China - BayernLB played the leading role in supporting the initiative. With a range of more than 600 different coins and bars, BayernLB is one of the leading wholesalers of physical precious metals in German-speaking countries. The Bavarian state bank orders directly from the most important mints and refiners and has been the world's largest Krugerrand trader outside South Africa over the past five years.

In addition, the World Gold Council publishes its Retail Gold Investment Principles, which define the minimum requirements and best practices to protect investors. “Our common objective is simple: make certain that investors, especially those considering gold for the first time, have absolute trust in the products they are offered and the providers with whom they chose to transact," explains David Tait, CEO of the World Gold Council. “The support of BayernLB for this initiative will be instrumental.”

Worldwide, retail investors currently own nearly 40,000 tonnes of gold worth over USD 2 trillion. According to the WGC, the vast majority of retail investments are in non-regulated products. Therefore, it is important to have globally recognised standards that provide clarity and consistency to increase confidence in the entire gold value chain.

"A few black sheep in the market mar the reputation of the precious metals business," says Michael Eubel, Head of the Banknotes/Precious Metals Department at BayernLB. "Education will definitely help which is why we decided to proactively contribute to the implementation of the principles for the responsible management among precious metal suppliers.”