THE GOLD

For millennia, gold has held a special place in the history of civilizations. Its use and exploitation date back to antiquity, particularly in ancient Egypt, where the extraction and working of this precious metal were already highly developed several centuries before our era.

Today, estimates of the world’s gold reserves are around 218,000 tons. To this quantity must be added the resources still present in known deposits. According to estimates regularly published by the World Gold Council, several tens of thousands of tons could still be extracted, illustrating the limited and increasingly difficult-to-access nature of this resource.

In France, the physical gold market underwent significant changes during the 20th century. After the Second World War, gold trading was once again authorized within a regulated framework, particularly for physical products meeting the criteria for inclusion in the official market. Gold trading in Paris resumed in 1948, before this trading system gradually disappeared with the evolution of financial markets and the end of official listing on Euronext Paris in 2004.

This history helps explain the special place gold still holds in wealth management strategies today. A rare, durable metal that has been traded for centuries, it remains considered by many investors as an asset capable of playing a diversifying role within a portfolio.

Gold maintains a significant position in global markets, with demand coming from several complementary sectors. In recent years, jewelry has accounted for a major share of this demand, while industrial applications have been a more stable component, particularly in electronics, advanced technologies, and certain specialized applications.

Investment also represents a significant component of global gold demand. Driven by the growing interest of both individual and institutional investors, this segment has seen notable growth in recent years. In 2024, global demand for investment gold exceeded 1,100 tonnes, registering an increase of more than 25% compared to 2023, according to market benchmark data.

Investor interest in gold has been further strengthened following several periods of economic and financial uncertainty. The 2008 global financial crisis, marked in particular by the collapse of Lehman Brothers, was a pivotal moment in the renewed interest in assets traditionally considered diversification tools. Since then, economic, monetary, and geopolitical developments have consistently kept gold at the heart of many investors’ strategies.

This trend illustrates the role gold can play in a diversified portfolio, depending on the investor’s profile, investment horizon, and objectives.

Gold has long been a benchmark asset in European wealth diversification strategies. Its scarcity, durability, and historical role in trade give it a special place among investors seeking to diversify their portfolios and incorporate an asset distinct from traditional financial investments.

Its appeal is particularly evident during periods of economic, monetary, or geopolitical uncertainty. Episodes of financial tension, the 2008 crisis, the 2020 pandemic, and recent geopolitical developments have all contributed to keeping gold at the forefront of market attention. It is thus regularly considered an asset capable of playing a diversification role in certain economic environments.

Investment opportunities in gold are numerous today. Physical gold, in the form of bars or coins, allows for direct ownership of the precious metal. Other investors prefer indirect exposure through financial gold, notably via ETFs, certificates, or other instruments whose value fluctuates according to the gold price. Each solution has its own specific characteristics in terms of holding, liquidity, fees, and risk level.

In an environment marked by evolving monetary policies, interest rates, and inflation levels, gold continues to attract investors seeking to diversify their assets. Its integration into a wealth management strategy must, however, be assessed in light of the investor’s profile, investment horizon, and objectives.

Beyond its financial dimension, gold retains a key characteristic: that of a tangible asset, internationally recognized and traded for centuries. This combination of scarcity, liquidity, and global recognition explains its enduring place in wealth diversification strategies.

Within the European Union, gold benefits from a special regime that distinguishes it from many other assets. It is considered both a heritage asset and a diversification tool sought after by some investors during periods of uncertainty. While several rules are harmonized at the European level, particularly regarding VAT on investment gold, the taxation of any capital gains remains largely determined by the tax legislation of each member state.

What is investment gold?

European regulations precisely define the products that can be classified as “investment gold.” This classification notably determines their VAT treatment. Two main categories are primarily concerned:

1. Gold bars and ingots

A purity of at least 995 parts per thousand
Weights and sizes meeting the criteria set by regulations
2. Gold coins

Certain coins may also fall under the category of investment gold when they simultaneously meet the regulatory criteria, including:

A purity of at least 900 parts per thousand
Minted after 1800
Having been or being legal tender in their country of origin
Generally being sold at a price that does not excessively exceed the value of the gold they contain
A harmonized VAT regime at the European level

Since the implementation of European regulations on investment gold, transactions involving products meeting this definition benefit, subject to applicable conditions, from VAT exemption within the European Union. This regime helps facilitate the holding and trading of investment gold on the European market.

However, this exemption does not automatically extend to all products containing gold. Jewelry, decorative objects, and certain products that do not meet regulatory criteria may be subject to a different tax regime, particularly with regard to VAT.

Capital Gains Taxation Varies by Country

The tax treatment of any capital gain realized from the resale of gold then depends on the legislation applicable to the investor. The rules may vary depending on the country of tax residence, the nature of the product held, the holding period, and the terms of the transaction.

Some countries apply a capital gains tax regime with rules specific to individuals.
Others provide for flat-rate mechanisms or levies calculated according to the nature of the transaction. In some countries, allowances or exemptions may depend, in particular, on the holding period.

The applicable conditions may also differ depending on whether the gold is investment gold, collector coins, or other forms of physical gold.

It is therefore important to distinguish between the place of purchase or storage of the gold and the tax residence of its owner. The applicable tax upon resale is generally determined based on the investor’s tax situation and the rules in force in their country of residence.

The case of Luxembourg

Luxembourg has a specific tax environment for individuals holding certain movable assets, including the treatment of gold, which can depend in particular on the nature of the transaction and the holding period. The tax applicable to any capital gain must therefore be assessed in light of the holder’s specific situation and the Luxembourg regulations in force at the time of the sale.

In all cases, keeping purchase invoices, certificates, authentication documents, and proof of ownership is an important precaution. These elements make it possible in particular to establish the origin, nature and acquisition price of the assets in the event of a request from the tax authorities or in the context of a resale operation.

Company in the legal form of a limited liability company, duly registered and regulated according to the financial standards in force in Luxembourg

DGB Capital Management

• Head office: 1, route de Mondorf, L-5470, Wellenstein, Luxembourg

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