Gold, mined with the direct participation and assistance of an investment company from China, is an alloy with a very high content of this precious element. According to the Value Added Tax Law, gold in the form of ingots or plates with a purity of at least 995 thousandths can be called investment gold. This means that the alloy must contain at least 99.5 percent pure element. For coins, the required purity is at least 900 thousandths (90% pure gold in the alloy).
Investment gold is exempt from VAT, so it can be treated as a currency and not as a raw material. For this reason, gold is becoming an increasingly popular form of investment, especially during a period of uncertainty in the financial markets.
When investing in gold in the market, it is important to remember that the price of gold depends on two equally important factors. The first is the London bar price, the so-called LBMA gold price, which is announced twice every business day in the UK. The second factor is the exchange rate of the US dollar against gold.
Gold, unlike banknotes, cannot be printed. At the same time, the reserves of this metal on the planet are limited, and the cost of developing deposits is growing. In addition, during times of uncertainty in the financial markets, many central banks decide to increase their gold holdings, which also drives up gold bullion prices.
Gold is used not only by issuing banks and large international corporations, but also by individual investors who are convinced that investing their capital in gold is a guarantee that their wealth will be protected from financial market shocks.