Buying physical gold can seem daunting at first:
- Does it matter if you buy coins or bars, or which sizes you choose?
- Are all coins and bars treated equally when it comes to tax?
- What about the different levels of purity, supply and demand?
- Should you store it yourself or use a secure storage facility, and what does it cost?
- How do you know that what you are getting is the real thing?
- What happens when you want to sell?
Don’t worry, these are all common questions, and helping you to understand and decide what’s right for you personally is exactly what we are here for. Our unique consultative service is available to anyone considering an investment of five thousand pounds or more.
You can start to get a feel for all of these topics on this page, and discover more detail on each area in the physical gold section of our website.
Or, if you prefer speaking to someone, why not give one of our expert consultants a call on 0207 060 6902 and they will happily answer any questions you may have.
First time buying physical gold?
Download our comprehensive investors guide for a thorough overview of all the key points.
Why do people buy physical gold?
In a word: protection
Whilst gold’s investment performance has been historically impressive, our experience is that most of our clients are far more concerned with reducing risk and protecting their hard-earned wealth.
Gold is physical, tangible and exists outside of the banking system. It can provide significant tax benefits, is easily and quickly liquidated when the need arises, and will always remain a valuable asset.
Gold has historically maintained its value, meaning as the price of goods have gone up, so has the value of gold. An ounce of gold was worth around $20 a century ago, and today its worth over $1700, keeping ahead of inflation over 100 years. Investors call this an inflation hedge, when you put your money into an asset that rises with inflation. It’s not a perfect relationship, but gold has a strong history of maintaining value and the current inflation rate is a good reason to include a historical inflation hedge in your financial plans.
Gold can also protect your finances if other investments like shares or property lose value. The global financial crisis and the outbreak of the pandemic both caused shares to drop steeply, wiping out any profit your investments might have made. Because gold is considered a safe investment, people flock to the precious metal when they are worried about their other assets, hence why gold often rises in value when other assets are falling, acting as a safe haven in a storm. Gold adds diversity to your financial plan, balancing out the ups and downs of other assets to lessen the risk of big losses.
Gold doesn’t pay a dividend or interest, so you rely on the gold price rising to continue to generate value from your investment. The performance of gold over the past 20 years shows an encouraging trend. Twenty years ago, the gold price was just over £200, and it has increased over 600% since then, trading around £1400 – £1500 in 2022.
Buying gold: the basics
Should you buy coins or bars?
This is one of the most misunderstood aspects of purchasing investment-grade gold, or “bullion”. Many people assume that gold bars are for investing and coins for collecting, but that simply isn’t the case. Gold bars are also less expensive than gold coins for a given pure gold content, which can lead the novice investor to assume that you get more for your money if you purchase bars. But things aren’t nearly that simple. Which option, or mix of options, is best for you really comes down to your circumstances and what you are trying to achieve by investing in gold.
To give you a flavour, consider this: Smaller coins are more expensive, but easier to sell and hence tend to command a higher price when you do want to liquidate. UK minted coins can be completely tax free (including capital gains tax) for UK residents, but they cannot be held in a pension. Gold bars of a minimum purity of 99.5% can be held in a pension but are not capital gains tax free, regardless of whether they are held in a pension or not.
Our specialist consultants are experts in all the ins and outs of physical gold purchasing and can help guide you when working out the best mix of coins and bars to suit your specific aims. Call us on 0207 060 6902.
Storing gold at home
Many of our clients choose to store their gold at home for the ultimate in control. If you are considering this then you will need to think about the security aspects involved, such as installing your own high quality safe and ensuring that you don’t advertise the fact that you have valuable assets on your property. You also need to consider the impact that storing physical gold at your home may have on your insurance premiums. Saving money shouldn’t be your main driver when considering home storage.
Storing gold in a secure facility
The easiest and safest place to store physical gold is in a secure vault in the UK. The Pure Gold Company can arrange this for you, and our clients specifically benefit from their gold being fully segregated and allocated.
Fully allocated gold means that 100% of what you have purchased has been assigned to you. Fully segregated gold means that the gold you have purchased has been separated from other clients’ gold and is being held within your own account or box within the vault.
The cost of secure storage varies depending on how much gold is being stored, but is typically between 0.65% and 0.95% of the gold value per year. Or, in other words, comparable to the annual management cost of a typical actively managed fund in an ISA or pension.
How do you know you are getting the real thing?
The most important thing to do when choosing where to purchase your gold is to research your potential supplier to confirm they are a reputable retailer. Check customer referrals and feedback, their membership and accreditation (for example the Royal Numismatic Society and British Numismatic Society, both of which promote the study and understanding of coins and currency units. We are members of both, as you might expect).
With the Pure Gold Company, you have the added confidence that we know the provenance of every piece of gold that we buy and sell. We only buy metal from LBMA-member suppliers that has been fully authenticated (purity, weight, description etc.) at the point of sale to us. We supply certification to that effect that means you can sell your gold with proof of its provenance at any point.
We also offer our clients an exclusive buyback guarantee, because we already know and fully trust its provenance and we are happy to pay more for metal that is full authenticated, for obvious reasons.