In the latest edition of its consumer information series, “Let’s talk about money”, the Austrian Financial Market Authority (FMA) informs consumers about the topic of gold and gold savings plans and mentions about the risks to be borne in mind in relation investments in gold.
Gold can basically either be acquired in physical form or in a securitised form as a security. When choosing a contractual partner, the FMA advises consumers to check particularly closely whether the partner actually has the necessary authorisation that is actually required in the case in hand: Where no investment advice takes place, then physical gold may be distributed with a trading business licence, while in the case of purchasing gold for building up assets (“gold savings plan”) a business licence for commercial financial advice is necessary. In any other cases other than these two, the distribution of gold that is securitised as a security is subject to supervision by the FMA – in this case the FMA advises to use the Company Database as well as the query for Tied Agents and Securities Brokers at www.fma.gv.at/en.
With regard to the associated risks, the FMA in particular highlights that the gold price is subject to historically high price volatility, and that gold is traded in US dollars. Investors therefore bear risks both in terms of the gold price but also in terms of the exchange rate. Furthermore, investors should also weigh up the issue of tradeability prior to making an investment decision, usually a precious metals savings plan cannot be sold as quickly as for example an exchange-listed security. Charges and brokerage commission should also be weighed up prior to any investment, since they may otherwise fully swallow up any increase in value of the gold.
The article about Gold and Gold Savings Plans can be found here.
Journalists may address further enquiries to:
Annemarie Bauer
+43/(0)1/24959-6007