all that glitters

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

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.