Key points
- Gold is mainly a store of value and a way to diversify – not a source of income.
- Physical investment gold is exempt from VAT in Germany.
- Gains from selling are tax-free after a holding period of more than one year.
- The biggest hidden costs are premiums and the gap between buying and selling prices.
Why people buy gold
Gold has been used to preserve value for thousands of years. Unlike money in a bank account, it cannot be created at will, and unlike a share, its value does not depend on the success of a single company. If you own physical gold, there is no issuer who can default: the coin in your safe is not a promise, it is property.
Many investors also value that gold often moves differently from shares and bonds. In times of crisis – banking turmoil, high inflation, political tension – demand tends to be especially strong. That makes gold a popular building block for spreading wealth more broadly.
What speaks against gold
- No income. Gold pays neither interest nor dividends. You only gain if the price rises.
- Volatility. Gold can fall for years too. After its 2011 peak, the gold price in US dollars lost more than 40 % by the end of 2015.
- Costs. You pay a premium over the pure metal value when buying and receive less from a dealer when selling. Storage and insurance come on top.
Gold is therefore more of an insurance policy than a growth engine. Investors who accept that tend to be happier with it.
Which form suits you?
| Form | Pros | Cons |
|---|---|---|
| Bullion coins e.g. Krugerrand, Maple Leaf, Vienna Philharmonic | Known worldwide, easy to check, easy to sell privately | Slightly higher premiums than large bars |
| Bars 1 g to 1 kg | Cheaper per gram from mid sizes upwards | Harder to verify privately, small bars are expensive |
| Gold ETCs exchange-traded | Cheap to trade, no storage of your own | No gold in your hand, issuer and custody structure |
| Mining shares | Possible dividends | Company risk, often more volatile than gold |
| Jewellery | Something to wear | Poor investment: craftsmanship is barely paid for when selling |
For most private people who want to own “real” gold, well-known bullion coins and bars from reputable refiners are the simplest start. More in the guide Gold bars or gold coins?
Tax in Germany
VAT: Investment gold is exempt from VAT under § 25c of the German VAT Act. This covers bars with a fineness of at least 995 thousandths and gold coins of at least 900 thousandths that were minted after 1800, are or were legal tender in their country of origin, and are not sold for more than 80 % above their gold value. Silver and platinum, by contrast, are generally subject to VAT.
Gains when selling: For tax purposes, physical gold counts as a private sale (§ 23 of the Income Tax Act). If you sell after more than one year, the gain is entirely tax-free. If you sell earlier, the gain is only tax-free if all your private sale gains in that year together stay below €1,000. This is a threshold, not an allowance: exceed it and the whole gain is taxable, not just the part above it.
How much gold makes sense?
There is no universal answer. Financial media often cite roughly 5 to 10 % of total wealth – as an addition, not the core holding. More important than the exact figure is having an emergency fund in the bank first, so you never have to sell your gold at short notice.
Many buyers spread their purchases over time, for example one coin every few months. That avoids buying everything at an unfavourable moment.
Where and how to buy
- Bullion dealers (online or with a shop): wide choice, fixed prices. For cash purchases of €2,000 or more, dealers must identify you.
- Banks: convenient, but often higher premiums and a limited range.
- Privately: often a fair price for both sides because there is no dealer margin. In return, you have to check the gold yourself and keep the meeting safe – see How to buy gold locally, safely.
For bars, look for refiners accredited by the London Bullion Market Association (LBMA); for coins, stick to well-known designs. Unusual pieces are harder to resell.
Storing it safely
- At home: only in a safe that is firmly anchored. Check your home contents insurance – valuables often have low limits.
- Bank safe deposit box: discreet and secure, but the contents are usually not insured automatically.
- Dealer storage: convenient, costs ongoing fees, and you rely on the provider.
And most importantly: tell as few people as possible that you keep gold at home.
Selling again
Dealers buy investment gold quickly but usually pay slightly below the current metal value. Privately, you can often get a price close to spot – the buyer pays less than at a dealer and you receive more than a dealer would pay. How these prices come about is explained in Understanding gold premiums.
This guide is general information and does not replace investment, tax or legal advice. No guarantee of accuracy; rules can change. Updated: 30 September 2026.