Real estate can produce income and grow in value. But it has one particular feature: turning an apartment or a hotel unit back into cash quickly is not always possible.
That is why I do not like the idea of putting all your capital into a single asset. Different assets should have different jobs.
Real estate can generate cash flow. A cash reserve provides liquidity. And physical precious metals help to diversify and preserve part of the capital.
And this is not only about gold.
Gold, silver, platinum and palladium
A strategy can include four physical precious metals: gold, silver, platinum and palladium. All are finite natural resources, yet they behave differently.
Gold is interesting first of all as an investment and reserve asset. For silver, platinum and palladium, a significant share of demand comes from industry. So the prices of these metals respond to different economic factors.
That is exactly why I treat them not as four identical assets, but as a way to spread risk within the metals part of the capital itself.
Diversification does not mean buying all four metals in equal shares. The proportions depend on the goals, the investment horizon and the overall structure of the assets.
Why physical metals specifically?
Gold can be bought in different ways: through ETFs, banking products and other financial instruments. But there is a fundamental difference between investing in an instrument linked to the price of gold and owning the physical metal itself.
With a direct purchase the investor becomes the owner of a specific asset. That matters especially to those who want part of their capital to sit somewhere other than real estate, currency, securities or bank accounts.
Physical investment metals can be held in specialised professional vaults. When this model is chosen, I always check how title is documented, where the metal is located, whether it is insured and on what terms it can be sold.
And it is important not to create an illusion of complete invulnerability here. Every asset sits in some jurisdiction and is subject to its law. But with direct ownership of physical metal there is no issuing bank’s credit risk attached to the asset itself.
Can gold protect capital from inflation and crises?
I would not promise that gold can protect money from any crisis. Its price moves too. There are periods of growth, periods of decline, and years when other assets do better.
So physical gold is not a way to earn quickly, nor a guarantee of profit.
Its job within the capital structure is a different one: long-term preservation of purchasing power, diversification and reduced dependence on individual currencies and financial assets.
That is why I find it more useful to look at gold over a long horizon rather than over a single month or year.
Why do central banks keep buying gold?
I like to look not only at analysts’ forecasts, but at what the large players in the market actually do.
In 2025 the world’s central banks bought 863 tonnes of gold. For comparison: average annual purchases in 2010–2021 were around 473 tonnes, and in 2022–2024 purchases exceeded 1,000 tonnes a year.
Total global demand for gold passed 5,000 tonnes for the first time in 2025, and demand for gold bars and coins reached a 12-year high.
This does not mean a private investor should replicate a central bank’s reserve structure. But the logic behind it makes sense to me.
Large capital thinks not only about how much to earn. It also thinks about how to keep what has already been built.
And gold continues to serve that function in the global financial system.
And how do you get back into cash?
This is an important question to ask before buying the metal. A physical asset must have a clear buy-back mechanism.
- Who will buy the metal back?
- At what price?
- What will the difference between the buying and selling price — the spread — be?
- How long will settlement take?
- In which currency can the money be received?
Gold is among the most liquid investment assets in the world, but the terms of the specific transaction still matter.
For silver, platinum and palladium the situation can be different. So I always look not only at potential price growth, but at the cost of entering and exiting the investment.
Why I do not choose between real estate and metals
The question itself does not sit well with me:
“Which is better — real estate or gold?”
They have different jobs.
Real estate can bring regular income and take part in price growth. But it is tied to a specific country and market, it needs managing, and selling it takes time.
Physical precious metals produce no rental income. What they do add to the capital structure is a real asset with a different pricing logic and a different set of risks.
So one instrument does not have to replace the other. What matters far more is allocating capital so that everything does not depend on one market, one country, one currency or one scenario.
What share of capital should be held in precious metals?
There is no universal figure. I am wary of advice along the lines of “everyone should hold 10% or 20% of their capital in gold”.
First you have to see the whole structure: real estate, the cash reserve, currencies, other investments, the horizon and future spending. Only then can you decide whether physical precious metals are needed, which ones, and what share of capital to give them.
Because buying gold is not the same as building a strategy.
A strategy appears when it is clear why each asset is in the portfolio, what job it does, and what owning it actually costs the investor.
And here we come to another thing that is often underestimated in cross-border investing: taxes and the costs that come with them. Sometimes it is precisely these that noticeably change the yield the investor saw in the original calculation.
More on that in the next article: “Taxes on buying property abroad: what an investor should account for”.
And my principle stays the same:
Strategy first. The asset second.
