Gold price advances with war; understand how to invest

​At times of increased uncertainty in the markets, it is common for investors to resort to assets considered the safest, in order to protect themselves on days of greater volatility.

With the Russian invasion of Ukraine and the potential economic and geopolitical impacts still unknown on a global scale, gold, known as one of the main protections available for the portfolios of economic agents along with the dollar, is on a firm trajectory of appreciation.

From January 31, 2022, when it was quoted around US$ 1,800 (R$ 9,072) in the international market, until US$ 1,921 (R$ 9,682) on March 18, the metallic commodity has accumulated an appreciation of approximately 6.2 %, in dollars, according to Bloomberg data.

The precious metal hit all-time highs in mid-August 2020, amid the pandemic, when it hit $2,060.

Gold is especially in demand in scenarios like the current one, with extreme volatility in riskier assets, says Paula Sauer, an ESPM economics professor and CFP financial planner.

“If it wasn’t enough that we were still having to live with the pandemic, now we also have war to bring more uncertainty, which makes people seek greater security”, he says.

For those interested in having the precious metal in their investment portfolio for protection and diversification purposes, the expert reminds that there are some ways to access it in the local market.

One of the most traditional ways is through the direct purchase of gold on the market, which can be done through large banks.

“As it is a variable income asset, the investment decision must consider market conditions, the intended investment period and, above all, the suitability to the profile of each investor”, says BB (Banco do Brasil), which offers account holders the “Gold Inscription” modality, in which it is possible to invest in gold in multiple amounts of 25 grams.

Investment in gold can be “an excellent option for those who expect a medium to long-term return and want to diversify investments, protect their assets or reduce losses with market volatility”, points out Bradesco.

​The gram of gold in the local market is worth something around R$310, and it is not at levels even more stretched due to the recent appreciation of the real against the dollar.

To arrive at the value of gold traded on the market, it is necessary to take the price of the troy ounce on the international market and divide it by 31.104 grams, the standard quantity of gold in the reference measure.

With the quotation on Friday (18) around US$ 1,900, the result is therefore equivalent to around US$ 61.76 per gram, with the exchange rate conversion to arrive at the domestic price, with the dollar. around BRL 5.04.

In addition to banks, it is also possible to invest in the precious metal directly through the Stock Exchange.

At B3, there are two main ways to access investment in gold, says Louis Gourbin, the Exchange’s commodities superintendent: through contracts that track the price of gold (OZ1D, OZD2 and OZ3D), or via the GOLD11 ETF and the BDR of ETF BIAU39, financial instruments that represent a kind of passive management fund that replicates the performance of the LBMA (London Bullion Market Association Gold Price) global index.

The OZ1D is an exchange-traded contract that corresponds to an amount of 250 grams of gold, explains Gourbin. In the case of the OZ2D, it is 10 grams, and in the OZ3D, 0.225 grams.

The amount required to invest in the contracts varies depending on the price of the gram of gold at the time, in addition to the fees charged by B3 according to the volume traded. As with shares, taxation is 15% on gains obtained from the sale of contracts, with exemption for businesses below R$ 20 thousand in the month.

In the case of the GOLD11 ETF, the value of the share traded on the Stock Exchange was R$ 10.28 on Friday (18), with a management fee of 0.55% per year, while the BDR of ETF BIAU39 was quoted at R$ 45.94, with a rate of 0.25% per year. Both are also taxed at 15% on capital gain, with no exemption regardless of the value traded.

​”Having exposure to gold is important for diversification purposes, but I understand that buying gold is a type of insurance. Therefore, you buy it before the accident occurs, compared to car insurance”, says Bruno Mori, CFP financial planner.

In this sense, continues Mori, including investments linked to gold in the portfolio is more efficient before a problem occurs in the market, as in the case of a war. After the problem has occurred, the asset is already valued, says the planner.

“Of course, everything that is bad can get worse, but there is a risk of buying the asset at the maximum and keeping it in the portfolio, suffering losses when the market improves”, says Mori.