“Bullion” refers to a bulk quantity of precious metal, measured by weight and typically coming in the form of bars. It’s a safe, tangible and valuable asset recognised all over the world. The weight of bullion is often measured in troy ounces.
GOLD BULLION OVERVIEW
WHAT IS GOLD BULLION?
“Bullion” is often seen as a confusing term with lots of different meanings. However, it simply refers to bulk quantities of precious metals, and is a term most often associated with gold. Gold bullion is usually seen in the form of bars or coins. When you invest in physical gold, you are investing in gold bullion.
THE VALUE OF GOLD BULLION
The value of an individual unit of gold bullion is indicated by the assay stamp that acts as a guarantee, assuring both the weight and the purity of the gold. Gold bullion is valued based on the current market value of physical gold, with the price of the metal referred to as a “spot price”.
GOLD BULLION AS AN INVESTMENT
In common with any commodities the price of gold can go up as well as down, and most investors will use gold bullion as a long-term investment rather than for short term gain. Over the shorter-term the gold market has fluctuated but many dealers still believe that “gold has an exceptionally constant nature”.
GOLD BULLION AND INTEREST RATES
Negative interest rates are another reason why many investors look at gold as a means of capital appreciation. Gold has a yield of 0% but in a negative interest rate environment that actually becomes an investment advantage.
SITS OUTSIDE THE BANKING SYSTEM
Something to bear in mind when investing in this type of gold bullion is that moving and liquidating large gold bars to extract their value can take a bit more time. However, it can also be the ideal type of investment, depending on your requirements. This is something our consultants can help you decide.
GOLD BULLION BARS
When buying gold bars, remember that they must meet a minimum standard to be eligible for trading, measured by weight and purity, and they come in different sizes from 1 gram to 12.5kg/400 troy ounces. The minimum purity standard for international trade is the Good Delivery bar, which must be 99.5% pure gold.
MANUFACTURERS OF GOLD BARS
Manufacturers of gold bars include UMicore, Harerus, Credit Suisse and UBS. It is important to make sure that your gold bars are LBMA approved and meet the standards and grades for investment. The Pure Gold Company provides gold suitable for all kinds of investment.
WHY INVEST IN GOLD BULLION?
Gold bullion is a solid investment in turbulent financial times. Thanks to the metal’s rarity, durability and applications in industry and design, gold will always be both scarce and in demand.
Reasons to invest in gold bullion include:
1. Gold is a reliable hedge against volatility
Furthermore, the gold price’s inverse relationship with the other investment assets means that its value often rises when other stocks are falling, making it an excellent “safe haven” to ride out economic downturns.
2. An independent investment
Gold offers an independent investment. Wherever physical gold is stored, if correctly allocated it belongs completely to the investor and remains under their control. Investors in physical gold can store their wealth free of the banking system and outside the traditional economy, in a form of an investment which they control and which can be easily liquidated at any time.
3. Moving forward
With the global economy facing uncharted waters thanks to unprecedented challenges of the pandemic, now is an excellent time to be investing in physical gold.
TAX FREE GOLD BULLION
Under UK tax laws, gold and sometimes silver bullion may be exempt from VAT and capital gains taxes when purchased under certain circumstances for investment. There are various levels of tax advantage depending on the type of physical gold bullion purchased for investment.
All investment gold is exempt from VAT if it meets the minimum criteria – of a purity not less than 995 thousandths in the form of a bar or wafer accepted by the bullion markets, or as a gold coin minted after 1800 that is at least 900 thousandths pure and is legal tender in its country of origin. All gold provided by The Pure Gold Company is meant for investment purposes and as such meets these criteria.
CAPITAL GAINS EXEMPT
Gold bullion coins created by the UK’s Royal Mint are exempt from both VAT and the Capital Gains Tax, as they qualify as legal tender. While these coins have relatively low face values, the value of the gold they contain is much higher and they are a reliable investment medium.
These tax treatments may change in the future.
TAX FREE SILVER
Depending on individual circumstances, The Pure Gold Company also supplies Tax Free Silver which is physical silver free from VAT when stored outside the EU, and free from Capital Gains Tax when purchasing coins minted by the Royal Mint.
GOLD BULLION COINS
One of the most popular types of gold bullion are gold sovereigns and silver sovereign coins. Gold Sovereign coins were traditionally made with 22 karat, as including a small percentage of alloy metal, usually copper, strengthens the coin. 24 karat coins are 99.99% pure gold. If you’re buying UK gold and silver bullion coins made by the Royal Mint, as legal tender they are exempt from Capital Gains Tax, depending on individual circumstances.
UK GOLD BULLION COINS
Similarly, gold and silver Britannias minted by the Royal Mint are also available as legal tender to UK buyers, coming in a variety of sizes and weights suitable for all kinds of investment. They are also exempt from the Capital Gains tax for the same reason, depending on individual circumstances.
FRACTIONAL BULLION GOLD COINS
To keep up with demand, all of the countries issuing one ounce bullion coins also produce fractional sizes of half ounce, quarter ounce and tenth ounce, with the quarter being the most popular. They also come in smaller fractional sizes, however, as it costs nearly as much to make the smaller ones, the larger coins represent a better investment.
INVESTING IN GOLD BULLION FOR A SIPP
The 2006 Financial Act made it possible for individuals to buy physical gold bars within their pensions or Self-Invested Personal Pensions (SIPP) and benefit from up to 45% income tax relief. This act has allowed hundreds of UK pension savers to purchase physical gold within their SIPPs at a very low cost.
In the UK, bullion investors will be able to take advantage of a recent release of high-quality gold bullion for private sale, with a purity of 99.99%.
Investors will incur a 1% charge per year for owning the bars, plus VAT. For pension purposes, however, this bullion will be free from capital gains tax and eligible for SIPP investment. You will be able to purchase 100g or 1kg bars and a small amount of the larger 400oz bars.
GOLD BULLION PRICING
Gold bullion pricing is sometimes confusing to new investors. Prices are generally quoted in terms of spot pricing, the amount of money required for an over-the-counter gold purchase via the London Market Bullion Association markets.
GOLD SPOT PRICE
Individual investors however cannot pay the spot price, as it is designed to benchmark price fluctuations and does not take into account creating the gold. Individuals will need to acquire their gold from either trading companies registered with the LBMA or registered banks. This usually means commission fees apply, particularly when purchasing gold from banks.
GOLD RETAIL PRICE
Reputable bullion dealers are more likely to sell close to the spot price, making the “spread” smaller for the investor. The spread is the difference between the price you can buy, and the price you can sell.
This makes investment with a bullion dealer a much more economically sensible proposition. The Pure Gold Company prides itself on providing a buy back guarantee and buying back at prices above the spot price, offering overall spreads that are lower.
TAX HOW TO INVEST GOLD BULLION
Whichever route you decide to take, many analysts agree that investing in precious metals is a wise move. Cash hasn’t beaten inflation but gold and silver certainly have.
Gold doesn’t have to be a one-off investment. Our Gold Saver offers you the opportunity to pay a small monthly fee and start getting investment gold delivered to your home.
FOLLOW OUR FOUR STEP GUIDE
Regardless of what type of bullion you’re after, we can help you to buy it, with all supporting certificates of authenticity provided. Our expert consultants will advise you on all available options and answer all your questions on how to buy gold bullion. When investing you’ll follow a four step process:
1. Consultation with experts from The Pure Gold Company on the best investment options for your needs.
2. Signing of a purchase order allowing The Pure Gold Company to purchase gold on your behalf.
3. Making a payment via bank transfer or personal cheque. For smaller orders we may accept credit or debit cards.
4. Choosing between delivery and storage of your gold.
The Pure Gold Company offers both secure storage in LBMA-approved Loomis International vaults and a fully tracked and insured delivery service if the client prefers to move their gold to their own location. All gold stored by The Pure Gold Company is fully allocated to the investor and is placed in segregated storage, making it easy to retrieve and sell.
HOW TO BUY GOLD & SILVER
Our Simple 4-step process makes physical gold and silver buying easy.
Q & A
One of our dedicated specialists will work with you to answer any questions you have. We will provide you with factual information (benefits / drawbacks) about all available products. The length of this conversation is down to you and is an opportunity to ask us as many questions as possible. Please note we are not permitted to provide any financial advice. If you require advice, we suggest you speak to a financial advisor.
When you feel confident that you’ve had all your questions answered, you will be asked to complete a purchase order, which is your instruction to purchase metals.
In order to lock in the price and complete your order, you must then make a payment, via bank transfer or personal cheque. We no longer accept any payments over the phone / card payments.
STORAGE AND DELIVERY
We can either deliver your gold directly to you, via our insured delivery service, or you can choose to have your gold safely stored, in a London Bullion Market Association (LBMA) vault, where your physical metals are allocated in your name and with full insurance provided.
IN THE PRESS
CHARLES CAMPLING – POLICE OFFICER – SURREY POLICE SERVICE
I decided to make my first tentative steps into investment in gold with the help of The Pure Gold Company due to the good reputation they have dealing with the less experienced investor such as myself. I feel their reputation is well deserved. I was kept informed, anything I didn’t understand was explained well. I have no reservations in recommending The Pure Gold Company to those looking to buy gold or silver.
SIR GEOFFREY LEIGH – PROPERTY ENTREPRENEUR
I found The Pure Gold Company knowledgeable and trustworthy and in my opinion wouldn’t hesitate to recommend them
ANNABEL BARTFELD – AMBASSADOR FOR GREAT ORMOND STREET HOSPITAL
These guys were patient and seemed to understand my situation well. They weren’t pushy or salesy and gave me all the facts so that I could make my own decision. I was surprised at how straightforward they made the process and would certainly recommend The Pure Gold Company to anyone looking to buy gold or silver
OLIVER SHIPTON – PARTNER AT LEE & THOMPSON LLP
Having thoroughly researched the gold investment market I found The Pure Gold Company. They were knowledgeable, transparent and kept it all very simple. My gold arrived the next day and I’m now discussing options for silver storage. I wouldn’t hesitate in recommending them…
RACHELINE NATALIE MICHAELS – DIRECTOR, HEXAGON OF HIGHGATE LTD
A friend recommended The Pure Gold Company, as they have a reputation of assisting beginners, they were fantastic. They explained in detail how it all works and what options would best suit our circumstances. They guided us on timing and saved us 6% by waiting a couple of weeks