Gold: why people buy it, how it behaves and what it costs
In short
- Gold pays no interest or dividend. You rely on the price someone else will pay for it later.
- People buy it to spread risk or out of distrust of money. The price can then fall or stand still for years, as it did after the 1980 peak.
- Physical gold, an ETC and mining shares are three different things, each with its own costs and risks.
- In the Netherlands gold falls under other assets in box 3. Belgium has taxed realised gains on financial assets since 2026.
Gold is a metal that has served as money and as a store of value for centuries. It does not rust, it is hard to make and everyone recognises it. As an asset, though, it behaves oddly: it does nothing. It does not grow and it does not pay out.
What gold is as an asset
A share is a piece of a company that makes profit. A savings account is money you lend to a bank in return for interest. Gold is neither. You hold a quantity of metal, and your return depends on what someone else will pay for it later.
On top of that, holding it costs money. Physical gold needs a safe, insurance or storage. A dealer also sells a coin or bar above the market price and buys it back at a discount. Those costs are in place before the price has moved at all.
Why people buy it
- Spreading risk. Gold sometimes moves differently from shares or bonds. That can help avoid putting everything on one thing, though it is no rule.
- Distrust of money. When people worry about inflation, the financial system or politics, they often look at gold.
- Scarcity. Only a limited amount comes out of the ground. According to the World Gold Council, mine production in the second quarter of 2026 was about 966 tonnes.
- Central banks. The same source says central banks bought about 289 tonnes net in that quarter. That tells you what others do with gold, not what you should do.
How it behaves
Gold does not stand still, but it does not always move the way people expect. On 30 July 2026 the World Gold Council reported total demand of 1,269 tonnes for the second quarter, flat on a year earlier. Investment demand through ETFs showed outflows of 45 tonnes in that quarter, while the gold price eased from the record highs of early 2026. That is a snapshot, not a direction.
An older example shows how long a setback can last. Gold hit $850 an ounce twice in January 1980. According to Portfolio Adviser, that level was not reached again until January 2008, about 28 years later. Adjusted for inflation it took until April 2025. Someone who bought at the top waited decades.
That says nothing about what happens now. It only shows that "gold is safe" is not the same as "gold never falls".
Ways to hold it
Physical (coins and bars). You have the metal in your hands or in a vault. Costs: the premium over the market price when buying, the discount when selling, storage and insurance. Risks: theft, fakes and the hassle of selling.
ETC or ETF. An ETC (Exchange Traded Commodity) tracks the gold price and trades on an exchange. Xtrackers explains that a physically backed gold ETC is a debt security that refers to the commodity price. The gold sits in a vault and you cannot have it delivered. The cost is the yearly product fee, which gradually reduces the metal entitlement per share. Suppose the fee is 0.25 percent (an invented figure): on €10,000 that is about €25 a year, plus any broker costs. Risks: no capital protection, price swings, currency effects and the fact that you do not own the metal yourself.
Mining shares. You buy companies that produce gold. They have leverage to the gold price: a higher price can turn into a bigger share of profit. But costs, royalties, ore quality and management decisions all count. VanEck, which sells funds on gold miners itself, names rising costs as a threat to margins. So this is not gold, it is business risk with gold attached.
Compared with savings and shares
- Gold: no interest or dividend. The price swings, sometimes for years. Holding it costs money.
- Savings account: interest, no price swings, no holding costs.
- Shares: possible dividends and profit growth, with price swings.
A savings account is for money that has to be there tomorrow. Shares represent companies that make profit. Gold is an asset without a payout. One does not replace the other.
Tax
Netherlands. Under the rules of 1 January 2023, gold coins do not count as cash in box 3, even when they are legal tender, reports Accountancy van Morgen. They fall under other assets. According to the SRA, the fixed return for other assets in 2026 is 7.78 percent. So you pay on a notional return, not on your actual price gain. Whether bars and an ETC are treated the same way I could not verify here. Check with the Belastingdienst or an adviser.
Belgium. KPMG reports that since 1 January 2026 a 10 percent tax applies to realised gains on financial assets, with a €10,000 yearly exemption. According to the Minister of Finance, investment gold falls within scope, gold jewellery does not. I could not verify details such as the treatment of an ETC.
What this is, and is not
This is an explanation. It is not advice to buy or sell gold and not a forecast of its price.
Sources
- World Gold Council, Gold Demand Trends Q2 2026 (30 July 2026)
- Portfolio Adviser, The lesson in gold of 46 years ago is repeating itself
- Xtrackers (DWS), What are ETCs (Dutch)
- VanEck, The cost of leverage: gold miners margins matter
- Accountancy van Morgen, Gold coins and box 3 (Dutch)
- SRA, High fixed return for gold coins in box 3 (Dutch)
- KPMG, Belgium new capital gains tax approved
