How to Invest in Gold? The Ultimate Guide to Gold Investment
For centuries savvy investors have been aware of the importance of gold as part of a well balanced portfolio. In addition to offering wealth diversification, gold is a world renowned safe haven for investors offering the ultimate insurance and protection against turbulent economic times.
History illustrates that gold is a timeless asset, not only proving to be a successful
preserver of wealth, but high gold prices and record demand has ensured it has
outperformed most other forms of investment.
According to the World Gold Council,
Central Bank gold buying was at its highest level
for 50 years in 2018, with the global economic slowdown weighing on the minds of
financial experts. Gold did so well that it broke price records in most currencies, with a staggering 72 nations reporting peak gold price, and the likes of the Pound, Euro, Yuan
and Swiss Franc near all-time highs.
Investor demand for gold grew by 4% last year. Despite the Chinese economy slowing
down due to pressure on exports to the United States, China's demand for gold stayed
roughly even from the previous year, while demand in other areas such as the UK and
South-East Asia grew by up to 12%.
As 2019 rumbles on, gold prices have steadily risen –
up $99 in the past six months.
Demand is high and investor interest in gold mining firms is strong, with several large
mergers in progress. The expectation, as detailed in our annual Gold Price Forecast, is
that gold will continue to make steady gains this year as investor demand rises. Last
year's demand was based on slowing economies and restricted trade, with gold's safe
haven status making it a desirable asset to diversify portfolios and provide a hedge
With Brexit yet to be resolved and applying pressure on the Pound, very weak economic
performance in the Eurozone, and the ongoing US/China trade war, could now be the
ideal time to invest in gold bullion?
How to Buy Gold?
The guide provides essential reading for all investors. If you've never bought gold before
then we can help explain how to invest in gold for beginners. Even seasoned investors
can benefit though, and this guide is packed with must read information and advice on
how to invest in gold coins and bars, including why buy gold, and where to buy gold.
Why Invest in Gold?
In order to know if gold is a good investment, it is important to understand why people buy
gold. In times of economic uncertainty and instability, buying gold makes more sense than
other assets. With confidence in the banking system and worldwide economy at an all-time
low, gold bullion could be the ultimate insurance and should act as an essential part of
everybody’s investment portfolio.
With the famous yellow metal in greater demand than ever, there are many reasons why
people should buy gold. Owning gold could be the ultimate way to preserve your wealth, and
possibly make a healthy return in these uncertain times. It’s an age old question which people
have been asking for centuries – where is my money really safe? And more and more people
are now choosing the oldest answer: GOLD.
Why Buy Physical Gold? Physical Gold Vs ETFs
As the old saying goes;
if you don't hold it, you don't
There really are numerous
benefits of physically holding your gold in your hands, as opposed to buying electronic
gold (ETF) or paper gold. In these unpredictable economic times of banking instability,
low interest rates, underperforming currency markets, volatile stocks and repeated
rounds of printing money, gold offers a welcome safeguard to the turbulence.
However not any form of gold, but physical gold. Physical gold is a timeless asset which
will always have a value and always lasts the test of time. Holding physical gold bars
and/or gold coins provides the ultimate control and insurance for your wealth against
financial crisis in an underperforming wider economy.
Where to Buy Gold?
Research is everything. Your decision to buy gold online wouldn’t have been taken lightly and
should be backed by your own research. Much the same, when it comes to selecting your
chosen bullion dealer, again research is vital. The Internet is the best place to conduct your
research. The Internet holds information about the impartial experiences, opinions and
recommendations of millions of people all around the world. It sounds obvious, but why not
start your research by simply typing in the bullion dealers brand name into Google.co.uk. The
Internet really is the world's largest open forum in which companies have no control. It will
become quickly apparent if a bullion dealer has a negative online reputation, in which case
they should be avoided at all costs.
When to Invest in Gold?
Looking back at historical data, in hindsight it is easy to identify 2005/06 as a great time to buy
gold bullion before the constant rises when the price of gold stood at just £250 T/OZ. Again in
2007/08 the UK banking crisis offered another great opportunity to jump onto the gold bandwagon
with the gold price standing at around £350 T/OZ. Some of the most common questions heard
now on a daily basis are; is it too late to buy gold? And; how much longer can the gold price
continue to rise?
Unfortunately, there's no exact science to knowing when to buy gold, but there are lots of effective
and timeless techniques and indicators that most successful investors use to help them and look
Gold Bars Vs Gold Coins?
Whether you’re new to bullion investment or not, deciding whether to invest in bullion bars
or bullion coins should take some consideration. Before making this decision, it would be
advisable that you conduct your research as there is no definitive right or wrong answer, it
will vary depending on the needs and circumstances of the individual investor. However,
as when making any other investment there are several factors to consider including: the
value of your investment and the product premiums, how long you plan on holding your gold,
how you will store it, capital gains tax (CGT) and how you plan on realising the value of your
Should I Buy Gold & Silver?
Many investors spend time deciding whether to buy gold or buy silver, however the savviest
investors own both. Whereas gold could offer the ultimate insurance and protection against
uncertain economic times, silver is a more speculative investment. Despite gold and silver
both being commonly invested precious metals, silver is an entirely different investment which
can realise substantial profits despite the initial VAT outlay. It’s because of these differences
that owning both gold and silver together can be of benefit.
Do I Pay Capital Gains Tax on Gold?
Capital Gains Tax or CGT is a tax on the gain or profit you make when you sell anything, give
away or otherwise dispose of something. It applies to assets that you own, such as bullion,
shares or property. There's a tax-free allowance of £11,300 (2017/18) and some additional
relief that may reduce your Capital Gains Tax bill.
Most bullion investors will never have to pay this tax due to the size of their investment and
many other investors choose to only buy tax free British gold coins which are CGT exempt
such as gold sovereign coins and half sovereign coins, however, it is important that investors
know where they stand.
Is Bullion Subject to VAT?
The good news is investment grade gold is VAT free. This includes all the gold bullion bars and
coins on our website. However, unlike gold, VAT is payable on silver at 20% making silver a more
long term, speculative investment. However, due to the volatile nature of the silver price, returns
are often quickly realised. If you are VAT registered and think you may be able to claim your VAT
back, then we advise you speak to your Accountant.
Where Should I Store my Gold?
The physical possession and control of your bullion is one of the main benefits of investing in gold
bullion bars and coins over electronic or paper gold, however you must consider where to store
your gold. There really is no one correct answer, the truth is you can do with it as you please and
can store it where you like; it really is down to personal preference. Storing gold bullion really isn’t
anything new; people have been successfully storing gold and silver bullion for centuries and is
particularly common in Germany and India.
On a basic level there are four different options; allocated storage, a bank safety deposit box, a home
safe or be a bit more creative. Although allocated storage with BullionByPost is the most secure all
four options offer a variety of pros and cons, these should be investigated before making a decision
as to how to store your gold bars and gold coins.
Why Buy Gold Online at BullionByPost?
dispatching thousands of parcels for free fully insured next day delivery
every month. BullionByPost is a fully authorised distributor of London
Bullion Market Approved (LMBA) Umicore, Heraeus and Metalor bars as
well as an authorised distributor for the British Royal Mint.
How to Buy Gold Online at BullionByPost?
Buying gold online at BullionByPost is quick, simple and secure. You can create and register your account online in as little as two minutes. Once your account is setup, you can buy gold and buy silver bullion online 24 hours a day at the click of a button. Your online account will also allow you to track the performance of your gold investment against the current price of gold as well as providing you with the latest product news and a safe place to store your invoices. With a comprehensive range of gold and silver bullion products available at low margins, buying gold UK has never been so safe and easy.
Related Links: If you have any questions about investing in gold, please feel free to contact our knowledgeable and friendly team on 01 699 4396 who will be happy to talk your through any queries you may have. Alternatively, you can email us at [email protected] and we will get back to you as soon as possible.