Internet Investment Gold

Internet Investment Gold (IIG) allows investors to buy physical gold online and have it stored on their behalf.

The landscape of such products has grown significantly over the last decade and new players are continuing to emerge. The largest providers now hold billions of US dollars worth of gold on behalf of investors.

As with any product group, it is important that investors fully understand what they are investing in and can identify the right solution before taking any decisions. The World Gold Council has therefore developed a set of guidelines that investors can use when considering how to invest in gold online, which is stored on their behalf (IIG), to help them identify a product that works best for them.

IIG Investor Guidance

The IIG Investor Guidance aims to help investors understand how to invest in gold online, differentiate between providers and assess which products best meet their needs. We provide relevant questions to consider when making an investment decision, and we provide background information and guidance for each question.

The guidance is designed to be a starting point. It does not constitute investment, legal or tax advice and is provided for educational purposes only. You can download the Guidance below:

Internet Investment Gold – Checklist

Download Checklist

 

Internet Investment Gold – Full Investor Guidance

Download Full Investor Guidance

 

IIG Product Provider Guidance

The IIG Investor Guidance will be complemented by an IIG Product Provider Guidance, which will define sound practices for providers of Internet Investment Gold products.

The IIG Product Provider Guidance will set out a blueprint of best practice for IIG Product Providers. We believe there will be a positive correlation between sound practices and the ensuing client experience; so we expect the IIG Product Provider Guidance to facilitate the growth of this sector.

A public consultation on the draft guidance will be held in the first quarter of 2019 and providers of Internet Investment Gold products, investors and other stakeholders will be encouraged to actively participate and contribute.

The IIG Product Provider Guidance for product providers will be published later in 2019.

Questions and answers

What is the Internet Investment Gold Investor Guidance?

The IIG Investor Guidance is designed to help potential investors make an informed decision regarding how to invest in gold online where that investment is stored by the provider on their behalf. The IIG Investor Guidance provides relevant questions that investors should consider when making an investment decision. For each question, background information and guidance are included. The topics covered include: product and provider characteristics, marketing and sales practices, and operational procedures, such as vaulting and auditing.

What products are covered by Internet Investment Gold?

Internet Investment Gold covers gold products that are sold via the internet and stored on the investor’s behalf. This includes the emerging area of gold-backed crypto tokens. Our IIG Investor Guidance is not intended to cover gold-backed financial securities such as exchange-traded funds (ETFs) or gold that is sold via the internet for immediate delivery. The reason for not including securities such as ETFs is that, having been in existence for over a decade, best practice procedures in trading and structuring are already well established.

How big is the sector and what regions are affected?

There are estimated to be more than 200 providers of Internet Investment Gold products or similar products globally. The largest providers hold billions of US dollars in precious metals on behalf of investors. Product providers are spread across numerous countries, ranging from Europe and North America to Asia and the Middle East - so it is not just a question of ‘how to invest in gold online’ but also where.

Why is the IIG Investor Guidance necessary?

Internet Investment Gold is a new, fast-growing sector in the gold market. Many products are regularly being launched around the world so there are many new ways to invest in gold online. However, the features between products can vary significantly in some cases. For investors that are new to the gold market, certain practices such as the different types of ownership that exist, the sourcing of gold, custody, and audit requirements will be unfamiliar. The IIG Investor Guidance aims to help educate potential investors about some of the unique features of the gold market.

What are the main benefits of investing in Internet Investment Gold?

Gold is a unique asset that is highly valued by savers and investors around the world. Its investment characteristics are numerous. It acts as an effective diversifier in a portfolio. It protects funds against the wealth eroding effects of inflation and currency depreciation. It is a highly liquid asset with no credit or counterparty risk. Internet Investment Gold provides investors with a means to legally own physical investment gold, while having it kept safely in professional vaults. Investors typically have the right to withdraw their holdings, but by leaving it in the vaults they benefit from an efficiency and convenience which is similar to that of other modern investment products.

What is the risk to investors buying Internet Investment Gold products?

Investment decisions for gold or IIG involve risks as with all other investments. Like all new markets, it is important that investors act with caution when picking a new investment product such as IIG and arm themselves with as much information as possible when making investment decisions. The World Gold Council has created the guidance to help investors with this process and understand how to invest in gold online.

Why is the World Gold Council issuing the IIG Investor Guidance?

The World Gold Council works with governments, international agencies and policymakers to help reduce barriers and improve access to gold. We develop globally recognised standards in seeking to create clarity and consistency where they are lacking and reinforce trust across the gold value chain, bolstering gold’s acceptance as a mainstream asset and broadening its investor appeal. The Guidance is intended to serve this purpose as well as educate investors on the ways they may invest in gold online.

What implications does this have for providers of these products?

The IIG Investor Guidance is aimed primarily at potential investors, not at product providers. However, the World Gold Council hopes that the guidance will serve as a useful tool for providers too, especially new providers who want to step in to this space. To facilitate this further, the World Gold Council intends to consult on a “blueprint” for best practice product design in this sector. A draft consultation document will be released in Q1 2019.

Disclaimer:

This website is provided for educational purposes only and does not constitute investment, legal or tax advice or a recommendation or an offer for the purchase or sale of gold, any gold-related products or services or any other products, services, securities or financial instruments (collectively, “Services”).

Further Terms and Conditions

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Reproduction or redistribution of any information on this website is expressly prohibited without the prior written consent of World Gold Council or the appropriate copyright owners.

World Gold Council does not guarantee the accuracy or completeness of any information in this website, and the information is subject to change. World Gold Council does not accept responsibility for any losses or damages arising directly or indirectly from the use of any such information.
This website is provided for educational purposes only and does not constitute investment, legal or tax advice or a recommendation or an offer for the purchase or sale of gold, any gold-related products or services or any other products, services, securities or financial instruments (collectively, “Services”). This website does not suggest the future or expected value of gold, any gold-related products or services, or implicitly recommend or suggest an investment strategy of any kind. World Gold Council does not conduct any diligence on providers of Internet Investment Gold or Tokenised Gold. Information available in this website should not be considered as information sufficient upon which to base an investment decision. Investors should discuss their individual circumstances with their appropriate investment professionals before making any decision regarding any Services or investments in any Services.

This website contains forward-looking statements, such as statements which use the words “believes,” “expects,” “may,” or “suggests,” or similar terminology, which are based on current expectations and are subject to change. Forward-looking statements involve a number of risks and uncertainties. There can be no assurance that any forward-looking statements will be achieved. World Gold Council does not assume any responsibility for updating any forward-looking statements.