Risk Warning
Investing in precious metals such as gold, silver, platinum or palladium can be attractive to many investors due to their intrinsic value and historic status as safe-haven assets. However, like any form of investment, it also carries risks that should be clearly understood before getting started.
General information
The content available on the VeraCash website is provided for informational purposes only and should in no way be considered investment advice. VeraCash cannot be held liable for any investment or divestment decisions made on the basis of the content published on this site or in our emails.
You should only invest based on your own knowledge, risk tolerance and financial capacity. Please seek advice from a licensed investment advisor before making any decision.
Past performance of any asset (such as shares, trackers, gold, or silver) is not a reliable indicator of future results. All investments carry a risk of capital loss – including investments in gold and silver. The prices of gold and silver are based on global market rates.
Key Risks Associated with Investing in Precious Metals
Capital Loss Risk
Investing in precious metals such as gold, silver, platinum or palladium carries a significant risk of capital loss. Precious metal prices are subject to volatility, which means investors may face substantial losses if prices fall after purchase. These price movements can be triggered by a wide range of economic, political, or even environmental factors, making this type of investment potentially unsuitable for those seeking capital stability.
Market Risk
Precious metals are heavily influenced by global market dynamics, including interest rate trends, currency fluctuations, and the monetary policies of major economies. For instance, rising interest rates can reduce the appeal of precious metals compared to interest-bearing investments, potentially leading to a decline in demand and market value.
Liquidity Risk
Investors looking to sell their precious metals quickly may encounter difficulties, particularly in a declining or less active market. Liquidity can vary depending on the type of metal and the form in which it is held—whether bullion, coins, certificates, or other formats. In certain conditions, finding a buyer at a fair price may take time, which can affect the value realised on resale.
Regulatory and Tax Risks
Tax rules on capital gains and the applicable charges on holding precious metals can vary significantly from one country to another—and may change over time. Investors should stay informed about their tax obligations and any potential regulatory developments that could impact the profitability of their investments.
Currency Risk
Currency risk arises when the value of an asset purchased in a foreign currency decreases due to changes in exchange rates. For example, if you make a deposit in euros and later use your Mastercard® to make a purchase in US dollars, exchange rate fluctuations could result in a capital loss. This is a key consideration for any transactions involving multiple currencies.