all that glit­ters

You don’t need a for­tune to start in­vest­ing in gold, de­gussa gold­han­del’s raphael scherer tells ZARA ZHUANG

Prestige (Singapore) - - CONTENTS -

You don’t need a for­tune to start in­vest­ing in gold, says de­gussa gold­han­del’s Raphael Scherer

Any­one can try their hand at in­vest­ing in gold, says De­gussa Gold­han­del’s Chief In­ter­na­tional Of­fi­cer Raphael Scherer. Not only does the entry-level 1g fine gold bar re­tail on the firm’s on­line store (for about $78), but with the open­ing of De­gussa’s first Asian bou­tique last year, pur­chas­ing gold bars, bul­lion coins, jew­ellery and other gold and sil­ver gift items also couldn’t be eas­ier.

The Frank­furt-head­quar­tered bul­lion dealer set up shop in Dhoby Ghaut last Oc­to­ber to reach out to a ris­ing num­ber of Asian mid­dle-class con­sumers, who are driv­ing up de­mand for pre­cious met­als. In­deed, global gold de­mand reached 1,290 tonnes in the first quar­ter of 2016, mak­ing it the se­cond-largest quar­ter on record, ac­cord­ing to the World Gold Coun­cil’s Gold De­mand Trends re­port. “With geopo­lit­i­cal crises around the world, low in­ter­est rates and dis­be­lief in the fi­nan­cial sys­tem, it be­comes lu­cra­tive to put wealth in pre­cious met­als as prices will al­ways rise in the long term,” Scherer ex­plains.

What should one con­sider be­fore in­vest­ing?

Once you de­cide to in­vest in pre­cious met­als, you should con­sider the time hori­zon. If you want to in­vest for the short term, you should pur­chase dif­fer­ent kinds of prod­ucts. Then, you de­cide how much you want to sell at one point in time — ev­ery­thing or only part of it. And do you in­vest sim­ply be­cause you be­lieve in pre­cious met­als or you want to hedge some of your in­vest­ments, or are you look­ing for short-term yield? So you con­sider whether, how and how much you want to in­vest in pre­cious met­als.

how much should a new in­vestor put aside?

The ques­tion is how much of his wealth he wants to in­vest. Hold­ing be­tween five and 10 per­cent of one’s as­sets in pre­cious met­als is a healthy ra­tio, so that would be our guide­line.

hav­ing en­tered the asian mar­ket from your home base in europe, have you no­ticed a dif­fer­ence in the ap­proach to in­vest­ing?

What’s im­por­tant for Asian in­vestors is that pre­cious met­als stay trade­able, whereas Euro­pean in­vestors don’t feel the short-term need to liq­uidise pre­cious met­als hold­ings. The way peo­ple re­act to a cri­sis — hold on to their money or di­ver­sify into some­thing else — is hap­pen­ing here at a higher speed com­pared to in Europe.

What’s the out­look on pre­cious met­als?

We are bullish on gold and also sil­ver, but maybe to a lesser ex­tent. I think for pal­la­dium, peo­ple ex­pect [its price] to be sta­ble or even drop­ping. But if we look at the other met­als, such as ruthe­nium, it’s re­ally tight, so it’s hard to pre­dict.

de­gussa also re­tails lux­ury items such as Watches, Writ­ing in­stru­ments and jew­ellery. do you see a need to cre­ate brand aware­ness for this seg­ment?

We’re not a fash­ion brand, so we al­ways try to keep to our phi­los­o­phy that the prices of our prod­ucts should stick rel­a­tively close to the gold and pre­cious metal prices. We do not want to be a lux­ury brand; we want to be the best bul­lion house of­fer­ing the best value for money — that’s our ideal.

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