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How to buy gold coins

Genuine gold coins can be a fantastic investment, a treasured heirloom to hand down through the family or an opportunity to protect your wealth for the future. Many people have already heard about these advantages, and more besides, but how do you take the next step to own gold? It’s unlikely that you have a ‘gold coin shop’ at the bottom of your road and, as we’ll discuss below, even if you did it might not be a good idea to buy from there! So, how exactly do you buy gold coins?

The advantages of gold coins

Gold is, first and foremost, a great way to protect your wealth. It’s not linked to stock market prices and so, in times of recession and market crashes, gold will often hold its value & provide a safe haven. This is because Gold is universally recognised as having an intrinsic value, so there’ll always be demand for it, which isn’t always the case with Company stocks and shares.

Coins, in particular, are considered to be a very liquid asset because they’re

PHYS01_Animated_Gif_2_MPUsmaller, they’re easily divisible. This means that if you required a relatively small amount of cash, you could easily sell a small portion of your holding.

In this way, the appeal of gold coins is enhanced by the fact that some dealers will even offer a buy-back guarantee for these coins due to their liquidity, typically at a higher price for their weight than bars.

As well as the opportunities for selling your coins in the future, there are also immediate purchase advantages. Coins are often available at a lower premium and are extremely tax efficient. This is because UK gold coins are technically legal tender within the UK, so there’s no VAT to pay and no Capital Gains Tax at the point of sale.

The different types of coin

There are many different types of gold coins on the market, but one of the most common UK coins, which benefits from the tax advantages mentioned, is the British Britannia. Like other well recognised gold bullion coins, it’s one ounce in weight and is a sound investment choice, whether you’re just starting or an experienced investor.

You can see a more comprehensive list of your bullion coin options here, including the South African Krugerrand, which is another common option for investors who want to diversify and move away from solely investing in UK coins.

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It’s sensible to buy coins that can be sold easily

A vibrant secondary market is an absolute must when it comes to purchasing coins. This is simply because you will want to sell them at some point in time in order to realise your investment, along with a tidy profit. But, far too many investors buy obscure gold coins because they think it’s rare and has a numismatic value. When they try to sell it, they can’t find a buyer. So, it’s imperative to invest in coins that can add liquidity to your portfolio.

Royal Mint gold coins

These could be well-known gold coins like the Britannia or the Sovereign. Both these coins enjoy a reputation that stretches far and wide across the world and can be sold quickly at any place, any time. It’s also important to note that these coins are easily available and can be purchased in large quantities with bulk discounts. The Britannia, for example, does not command a rarity value as its editions are all fairly recent and do not go back centuries. They are mass-produced and are easily available with low premiums.

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Gold coins can add divisibility to your portfolio

Buy gold coins for collection purposes

Investing in old, collectable gold coins (also known as numismatic coins) is a popular hobby for many, and collectors can make decent profits at any point, should they decide to liquidise their collection.

However, numismatics (rare, gold-bullion coins which are not quite at the point of being formal collectables) is a professional discipline of study, and for the casual or even professional gold investor, it’s normally recommended that you stay with modern gold coins.

If you do have a specific interest in numismatic or semi-numismatic coins, however, it is possible to purchase these via the same routes as those described below.

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Is it possible to combine a passion for collecting with profits?

Several investors develop a passion for collecting over time. If you are developing a collection, it doesn’t necessarily mean that you should forego profits altogether. There are several collectable sets of coins available in the market that are attractive to investors as well, as collectors. A case in point would be the Queens Beast series of coins, which are released by the Royal Mint.

The set features the legendary Queens Beasts and two new releases are introduced into the market every year. The challenge of collecting the entire set lures several collectors. At the same time, these coins are an excellent investment, as values can go up by as much as 40% in one year. Therefore, they tick both boxes for the buyer – collectability and good profits.

How to buy gold coins in the UK

Once you’ve reviewed the information about gold coins and decided on your approximate purchase requirements, you have several options for the actual purchase itself. The main routes to buy gold coins in the UK are:

  • a registered and approved gold dealer
  • a jeweller
  • an online private seller (using a marketplace such as eBay)
  • an online portal seller

Each of these options can have their own strengths and weaknesses.

Registered and approved gold dealer

An approved gold dealer will typically be able to provide you with the best price, the best quality and the best choice of gold coins, due to their position at the heart of the gold marketplace and their associated buying power.

They offer added security with regard to quality, flexibility in the quantity you wish to buy and expertise when it comes to guiding you on which type of coin to purchase. Gold can be purchased for many reasons and a reputable gold dealer will be able to guide you on which type of gold coin will best meet your objectives. They should also have added services such as insured storage of your gold coins – should you prefer not to store them yourself. A reputable dealer should be BNTA accredited. The BNTA oversee the coin trade within the UK and dealers must meet certain criteria before they are awarded accreditation.


Download our FREE 10 step cheat sheet to getting the best price when you sell your gold coins


It’s important to discuss your investment objectives with your dealer at your first meeting or call. Once you can secure a place on the dealer’s mailing list, you will get to know about the best deals in advance. If a specific coin that you’re interested in becomes available, you’ll be the first to know. A clever way to purchase gold coins at lower prices is to wait until the market becomes quieter. Needless to say, there could be excessive demand in a busy market and prices would stay up.

Jewellers

Some jewellers will often hold small quantities of gold coins, sometimes with the intention of selling, as they would a ring or necklace.

The coins held at professional & reputable jewellers are likely to be genuine but may not be of the trading quality sold by a gold dealer. They’re also likely to hold a limited quantity and may possibly charge a larger margin, due to the likely intention that the gold is a gift, rather than an investment. Not a bad option if you want to buy gold coins in small quantities.

Private sellers

Gold collectors, and owners, can sometimes turn to marketplaces such as eBay to sell their gold to the mass market.

Whilst it can be tempting to sniff out a bargain on sites such as this, purchases from private sellers come with risks such as being fake, or low-to-middling quality and there is a lack of purchase guidance that you would receive from a reputable dealer.

Online portals

Some bulk sellers now offer automated online portals for gold purchases. This can be an attractive proposition for smaller purchases of perhaps one or two coins.

For larger purchases, however, these portals are usually unable to offer personalised guidance on your chosen gold, which can make all the difference to your returns and the value of your gold holding at a later point.

Insider's Guide to gold and silver;

How to structure your gold coin purchase

Once purchased, you may decide that you wish to keep your coins at your home. If this is this case, we would recommend installing a security solution such as a safe. Alternatively, if purchased from a reputable gold dealer they will probably be able to offer you a secure storage solution.

There are also other options for your gold purchase, which may align with your wider investment objectives. A regular savings plan might be attractive – reducing your initial outlay and helping you save in smaller, manageable contributions to your overall gold coin holding. A gold dealer can discuss the options with you and help decide on the most suitable route forward.

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Getting value for money from your purchase

The ‘secret’ to buy gold coins successfully is simply to understand why you are buying gold and to make a purchase based on your long-term aims.

The reasons for someone in their 50s purchasing a single gold coin to pass to their grandchildren, for example, will be very different from the reasons behind a 30-year-old purchasing to hedge their existing investments.

In each of the above scenarios, experts are there to help ensure your purchase is exactly right for you – furthering your overall aims and benefiting you and your circumstances.

buy gold coins
Investing in gold coins can be highly tax efficient

Making tax-efficient investments

Tax efficiency is a key consideration for any investor. UK investors are fortunate to have VAT and CGT savings on UK gold coins. There are VAT exemptions on all investment-grade gold, which includes coins and bars (such as 1oz, 100g and 1 kilo). However, gold coins that are legal tender in the UK are also capital gains tax-free. This means any profits that you make from the sale of your investments in the UK gold Britannia or Sovereign will not be subject to capital gains tax. But, if you were to invest in a non-UK gold coin like the Krugerrand, the profits from its sale can be taxed.

Call Physical Gold for the best advice on buying gold coins

Physical Gold is one of the most reputed online dealers of precious metals such as gold and silver (bars and coins) in the UK. We have investment advisors who can guide you on the best gold coins you can buy. Our team makes recommendations and imparts advice after discussing your investment objectives. Give us a call today on (020) 7060 9992 or contact us through our website. We can help you build a robust portfolio by investing in the right gold coins.

 

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What are the best ways to invest in gold?

Various options to invest in gold

Historically gold ownership has been associated with super wealthy sheikhs and the elite. However, the financial landscape has shifted to such a degree that it is now crucial for the average man in the street to consider the best ways to invest in gold.

Gold mining shares

While gold investment may be a new concept to many, share ownership is far more commonplace. So a good place to start may be gold mining shares.  Just like other stocks, the price of these companies can go down as well as up and the shareholders will receive dividends if the company does well. A word of caution though is that your risk exposure is to one company only rather than to the gold price. This means that all your eggs are in one basket, so if that particular company has poor management or they struggle to discover new gold reserves, it can struggle or even go bust.

High risk gold mining shares

The possible rewards to the investor are high, but unfortunately so are the possible risks of total loss. The recent gold price adjustment meant that many miners were operating at a loss until the price recovered, leaving many precariously close to closure.


Download our FREE 7 step cheat sheet to successful gold investing here


Gold ETFs and gold funds

Gold funds such as the Blackrock Gold & General provide the advantage of spreading exposure amongst a basket of gold mining companies, reducing overall risk. However, as an investor, the value of the fund still doesn’t directly track the gold price. You have to pay management fees for the running of the fund and you only ever really own a piece of paper, meaning your investment is at risk from poor management and the underlying companies going bust.

Gold ETFs

A more direct relationship with the gold price would be with

Insider's Guide to gold and silveran Exchange Traded Fund (ETF). This tracks gold far more closely and can be suited to those looking to trade in and out of gold and play the market, as charges and margins are low. However, these gold investments have an Achilles heel. Just like with shares and funds, the investor only owns the asset electronically or on paper. There has been much speculation recently that ETFs and ETCs only hold a fraction of actual physical gold compared to the amount of outstanding investment in their funds.

This means that if many investors chose to sell at the same time, there wouldn’t be the amount of gold behind the scenes to cope with the sell off and the whole structure would collapse – leaving many penniless. These concerns have manifested recently into a dual market – Electronic gold funds and physical gold – with a majority of investors wishing to move over to owning real gold bars and coins.

Physical Gold

The only way to invest in gold with total peace of mind is to buy gold coins and bars. These can be delivered directly to your door from reputable gold dealers so that you get direct access to your gold. This means that investors are immune to any companies going bust, poor fund managers, or even Governments collapsing!

Production cost of gold coins and bars

Margins are higher when buying physical gold as there is a cost associated with refining, producing and distributing gold bullion. Therefore it is far better suited to those seeking medium to long term security rather than active traders.

However, there are now a number of innovative physical gold products which further enhance the case for investing into solid gold. All investment grade gold is VAT exempt in the UK. Certain British coins have the added advantage of also being Capital Gains Tax free. Gold bullion now even qualifies for your pension with SIPP Gold, providing the chance to buy gold bars at up to 50% discount through tax relief. Finally, a very accessible way to invest in gold is through Gold Savings. This offers the chance to set up a monthly savings scheme whereby investors gradually build a holding in gold coins rather than save with a traditional bank.

invest in gold
Investing in physical gold is one of the best ways to acquire a tangible asset

Buying gold coins

Gold coins can be a great addition to the portfolio of any investor as they provide divisibility. But, one should know more about coins, before investing. There are three categories of gold coins. New releases are coins released by mints across the world. These are purchased by collectors and investors alike. They carry low premiums and are easily available. However, one should bear in mind that some premiums may be charged by well-known mints like the Royal Mint for packaging and presentation when these coins are purchased.

Collectable coins

The second category is collectable coins. These coins can be rare and old. Many are limited edition releases and enjoy huge interest from numismatists around the world. Due to their rarity and demand, collectable coins attract large premiums and they are unaffordable for smaller investors.

Bullion coins

Lastly, there are bullion coins. These are affordable, easily available and can be purchased in bulk with large discounts. It’s also important to focus on buying coins of different sizes, weights and dimensions as this adds flexibility and divisibility to the investment portfolio.

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Gold bars are popular as well

Of course, gold bars are also a popular investment vehicle and attractive to several investors. However, one needs to bear in mind that buying a large bar implies that you can only sell it once. This is where divisibility becomes a key consideration, which we have discussed earlier. Owning smaller pieces of gold allows you to sell them off in smaller quantities when the market price is right. One can take advantage of the different price points in the market by continuously selling small quantities. But, gold bars do not support divisibility, as they are good for a single sale at one given price.

Accessible sizes

The good news is that bars are increasingly becoming available in smaller sizes. So, putting some of your investment in these can create balance for your portfolio. Another reason to invest in gold bars is lower production costs. Coins have a more intricate design element to them and higher production costs due to detailing, polishing, designing and other costs of manufacture. Gold bars are usually rectangular and simply have a purity number, serial number and refinery mark.

Always check the purity when buying a gold bar

As discussed, a gold bar will have these critical pieces of information engraved on its face. When making a purchase, it is of paramount importance that one checks these numbers. Most gold bars are produced with a purity of 99.9% and the bar will convey this information as 999.9. Never buy a bar that does not have a serial number or refinery stamp, as there is no guarantee that the gold contained within the bar is pure. Gold bars should ideally be purchased from a specialist gold dealer and one should compile a list of reputed gold dealers in the country before making a purchase.

Our specialist team of gold experts would be happy to hear from you

Physical Gold has a team of gold experts who can assist you in every step of the way when you buy gold. They can help determine the purity and advise you on what to buy and when. The advice they impart is backed by years of experience and solid research. Call our team today on (020) 7060 9992 or get in touch with us online.

 

 

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How to find out the Tax-Free gold price

Tax-free gold price on the way up

With tensions in Syria reaching boiling point, a few years ago, it hasn’t gone unnoticed that the price of gold had steadily risen at the time as the world prepared for conflict.  Since then, a plethora of myriad challenges has hit the world economy. It has now been a long 12 years since the days of 2008 when the world faced its most severe financial crisis.

The US sub-prime housing market collapse triggered off a chain of events that eventually brought global financial institutions down to their knees. The period witnessed the demise of Lehman Bros and a large number of global financial institutions followed suit. But, economists all over the world had hoped that in time, the crisis would dissipate, and the world economy would be buoyant once more.

Ongoing crisis fuels gold price

This was not to be. Instead of a healthy recovery, the global financial markets simply settled into a bearish and sluggish phase that lasted for most of the decade. A change of guard at the helm of the great nations could not provide a viable solution to the problem. On the other hand, geopolitical events around the world continue to queer the pitch for a recovery.

The uncertainty surrounding Brexit and government debt across Europe created a problem. Of course, there was a renewed escalation of conflict in the Middle East, along with the increasing threat of global terrorism that led to greater levels of economic uncertainty. This was further compounded by other factors like the US-China trade war.

tax free gold price
Gold coins are attractive to investors for hedging risks

At the height of the recession, gold reached its highest ever peak in August 2011, when the spot price of 1 ounce of gold touched $ 1900. This rise was attributed to wary investors moving away from market-linked instruments and hedging their risks by investing in gold. Now, in 2020, we can once again see the spot price rising all the way up and it has already reached above the $1600 mark. Investors are once again depending on the safety of gold.

The reliable safe-haven investment is now technically in a bull run again after gaining more than 20% from its June lows. Tracking the tax-free gold price is essential if you’re to time your entry into the market well and maximise returns.

When is gold tax-free?

Tax regimes can vary dramatically around the world, so we’ll just focus on the tax treatment of gold in the UK. All investment grade gold is VAT exempt, meaning you’ll pay no tax when you buy. To qualify as investment grade, the gold needs to be 22 carats or higher in purity and in the form of a bar or coin. So this instantly discounts the merits of lower grade jewellery, or gold in the form of dust as tax-free gold.

Owning physical gold bars and coins doesn’t produce any dividends like a gold mining share might, so a holder also avoids paying any tax while holding them.

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The final piece in the jigsaw is whether any tax will be applicable upon sale – known as Capital Gains Tax (CGT). Generally speaking, any profits you’ve made are liable for CGT once you’ve breached your annual allowance. So, if you sell gold bars or foreign coins such as Krugerrands, you may have to pay CGT.

However, the amazing loophole lies with British coins. Namely UK Britannia and Sovereign gold coins are actually legal tender in the UK. As such, the Treasury can’t tax you on their movement, essentially rendering them CGT free! So if you want to avoid paying tax when buying, holding and selling gold – Sovereign coins are a great place to start.

What influences the tax-free gold price?

There are several variables which contribute to the price of Britannia and Sovereign coins. Firstly, the age and condition of the coins. Generally, brand new coins will trade at a 1-2% premium to circulated coins. In my opinion, older coins offer better value as you’re unlikely to receive the same premium you paid when you come to sell brand new coins.

Secondly, the number of coins you’re looking to purchase will impact the price you pay. Generally speaking, you should benefit from economies of scale with the premium you pay shrinking as you buy more.

Insider's Guide to gold and silver

Physical gold price affected by supply and demand

The fact that the UK gold coins are real and tangible, rather than simply paper gold like ETFs or mining shares, means that supply and demand will also influence the gold price.  If the market experiences high demand and/or restricted supply, then you may find yourself paying higher premiums for the same coins.

Finally, the place from which you source your gold coins will have an impact on price. Buy direct from the Royal Mint and you’ll pay over the odds due to packaging and presentation. However, purchasing from a reputable gold dealer should keep premiums to a minimum.

tax free gold price
All investment grade gold is VAT free in the UK

Where can I track current gold prices?

If you don’t want to have to call a gold dealer every 5 minutes to gauge prices, it’s useful to be able to trace the approximate price on the internet. There is a relatively easy way to do this. Reputed gold dealers will display the current price of gold on their websites.

As you may be aware, the price of gold is a dynamically moving number and is usually reflected on a ticker, which is displayed at the top of the website. The display gets automatically updated every minute. By checking the ticker, you can stay up-to-date with the current price of gold. Also, in today’s day and age, there is an app for just about anything. Several gold apps in the market can also track the price of gold in real-time and keep you updated.

If you’ve already bought gold coins, you may simply want to track their value. While the factors discussed above will determine the exact price, it is possible to estimate its value from the gold spot price.   This price moves throughout the day and is fixed twice daily – known as the London fix. These fixes can be found on the LBMA website or the live price with a gold dealer such as Physical Gold Ltd. You can then simply add a premium of between 7-12% to obtain a decent guide to the price of tax-free gold.

Call us for any advice on buying gold

At Physical Gold, we have a specialist team who can advise you on all matters related to the sale and purchase of precious metals. This includes guidance on the price of gold and how to invest in tax-free gold. We are one of the most reputed online precious metal traders in the country. Call our gold experts today on (020) 7060 9992 or simply reach out to us via our website. Our friendly customer service team is always at hand to ensure that you make the right investments when it comes to gold and silver.

 

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Where is the best place to buy gold bullion?

Best place to buy gold bullion

Everyone wants to own their own gold bars and coins. You only have to open the papers to read that traditional investments are flagging, and alternative assets should now play a part in everyone’s portfolio. Of course, it is common knowledge that savvy investors always turn to precious metals during times of economic uncertainty. Well, the global markets have had an unprecedented run – probably the longest spell of economic uncertainty ever since 2008. Well, if you look back at the gold price charts for 2011, you will see that at the peak of the crisis, everyone turned to gold. Infact, gold prices climbed to above $1900 for one troy ounce in August 2011.

Bullion prices set to rise

Right now, the news is probably getting worse. If the pundits are to be believed, over 12 years of economic uncertainty has now culminated in what looks like yet another possible global economic crash. The predictions of gloom and doom have now been in the news for a while. Europe has been neck-deep in economic crisis for a long time, driven by a number of factors, including fears of a hard Brexit. Now that Brexit has actually happened, the uncertainty has not gone away. Speculations are rife about how the new rules of engagement are likely to affect the already beleaguered European economy.

best place to buy gold bullion
Gold bullion bars are attractive to investors due to lower production costs

Elsewhere in the world, regional political instability and the US-China trade war has created a boiling pot of economic turmoil that could destabilise the global economy once again. Already, gold prices have shot up to $ 1600 per Troy ounce. If we look back in history, this is usually an indicator of investors pulling out of the global capital markets and parking their money in gold.

Bullion once again a safe haven asset

Apart from the global economic downturn, this earlier period of the 2008 economic crisis witnessed a tumultuous time in the US economy, as the debt ceiling crisis unfolded. Due to this, investors lost confidence in the US dollar and turned to gold. Well, in the present day, apart from global geo-political tensions, uncertainty continues to rear its ugly head in the form of Brexit, as well as the unfolding US foreign policy. Once again, it’s time to turn to gold bullion, in order to hedge against the risks of a possible downturn in the global capital markets, as well as forex markets.


Thinking of buying gold bullion? Download our FREE Insiders Guide to gold investing here


The important part?

Just as important to know is that physical gold beats paper gold for security hands down. This is simply because paper gold companies often sell off their gold holdings when gold prices take a beating. Additionally, paper gold – aka ETFs carry counterparty risks. This simply means that the company that issued the paper certifying your investment in gold holdings can underperform and sink. If that were to happen, your paper gold investments are worth nothing. Many paper gold companies also issue gold bonds in excess of the actual physical gold holdings to back them up.

Ultimately, this undervalues your investment as there is now lesser gold to back up your paper certificate. So, if it’s physical gold that you should be buying, in form of gold bullion, it’s important to find out where one can get the best deals. But where is the best place to buy gold bullion?

best place to buy gold bullion
To get a genuine deal, it’s important to buy bullion from a reputed dealer

Where should I buy gold bars and coins?

Many people we speak to ask us where the best place to buy gold bullion is and they often mention eBay. Clearly eBay is a wonderful marketplace to pick up some great prices on almost anything you may wish to buy. However I would strongly urge you never to buy gold bullion through eBay. Gold appeals because it reduces your overall risk of being hit by market downfalls and shocks. So why would you want to take on the huge risk of buying from eBay.

Unless you have very sophisticated testing equipment, there is no way of knowing the gold is genuine, its purity or quality. You are leaving yourself exposed to fraud. If you are happy that it is the right time to buy then the other consideration is price. Gold is not a great fit for eBay due to the associated PayPal fees. Any seller will have to factor these fees into their gold price and pass them onto yourself.
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The Royal Mint

At the other end of the safety spectrum is The Royal Mint. The name itself provides the reassurance that your gold can be trusted and is of top quality and condition. The restriction with this avenue is that The Mint only sells new gold coins (such as the Sovereign or the Britannia), it doesn’t offer circulated coins or gold bullion at all. So if you’re looking for tax free gold coins then The Royal Mint can certainly offer you pretty coins. However, if gold investment is your main driving force, then this is an extremely expensive option. You will essentially be receiving far less gold for your money than if you source the gold elsewhere. You cannot sell the gold back to the Mint so to realise a profit on your gold investment you will need to sell at the prevailing rate to a gold dealer. Paying this initial premium on the gold will severely hamper your returns. However, I’d say that The Mint are a decent source for obtaining presents for a family as some of their coins come in wonderfully packaged boxes, albeit at inflated prices. They also offer a huge number of collectors’ editions if that’s your interest.

Overall best place to buy gold bullion?

A source you can trust to obtain top quality gold bullion,

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at competitive prices and you can also sell back to them when you need? The answer is a UK gold dealer. The best place to start is the British Numismatic Trade Association (BNTA) who registers all the trustworthy gold dealers in the UK. If dealers are a member of this association, they need to adhere to a strict code of ethics, and you will have a dispute process should their service and goods fall below this code. Generally, you will have a decent choice of gold bullion and coins with a dealer, depending on their area of speciality. Some may focus on numismatic or collectors’ coins, while others focus on investment gold coins and bars. Prices are very competitive (particularly for bulk deals) or buying a kilo gold bar and crucially they may be able to provide access to circulated tax free gold coins which provide the best value of all. You will receive full documentation with any good dealer and even benefit from market guidance on the gold price and types of gold.

best place to buy gold bullion
Bullion coins are easily available at low premiums

Identifying a reputed gold dealer

Many investors are daunted at the prospect of looking for a trustworthy gold dealer. However, this can be a simple task if a common-sense based approach is followed. As explained earlier, the BNTA can be an excellent starting point. As a regulatory body in the industry, they have a verified list of several gold dealers in the country. The first step is to select a few dealers from that list and vet them yourself, before trading.

Remember, online dealers, are likely to provide you with a larger catalogue of products than the traditional high street gold dealer, who may offer you limited choices. It’s also easier to check the market reputation of an online dealer via the Internet. If the business has had a long track record of being in the market, they are likely to have several customers who have posted reviews online. Going through these reviews would give you an idea of the trust factor of each dealer.

Communication is key

Calling the dealer is an excellent idea and any reputed dealer worth its salt will be open to answering any questions that you may have regarding investments. They would also be able to offer you a buyback scheme and documents guaranteeing the quality of the gold they’re selling. Of course, if the dealer refuses to buyback what they’re offering, clearly something could be wrong. Most reputed dealers would also offer you the option of storing your gold with them in an LBMA approved vault. They would also offer you a secure, insured delivery option in the event you choose to collect the gold at your home. Once you’ve gone through these steps, you’re likely to shortlist a couple of reputed online dealers whom you can start doing business with.

Get in touch with us for advice on identifying a specialist gold dealer

So next time you’re looking to buy gold, look no further than a specialist gold dealer. The Physical Gold investment experts can help you identify specialist gold and silver investments. To speak with our investment experts, please call on 020 7060 9992 or get in touch with us online. Our team of experts are always on hand to assist you in making the right investment decision. Start off modestly, perhaps with 1oz or 100g gold bars. It’s the best call you’ll ever make. Also, why not read our beginners guide to buying gold, here?

Image credits: Matthias Wewering and Brett Hondow

 

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Gold Prices Surge to 7 Year Highs Due to Coronavirus Pandemic Fears

Coronavirus and gold prices

February 24th, 2020 saw gold prices surge to a 7 year high. Concerns about a COVID-19 coronavirus global pandemic upset the markets, we investigate reasons for recent events in this latest article.

What is the COVID-19 coronavirus?

The expression “coronavirus” is actually a term used to describe a large family of viruses, which cause a range of conditions ranging from the common cold to more serious illnesses such as MERS and SARS. The virus outbreak in 2020 called the “coronavirus” is actually COVID-19, a new strain of the coronavirus family, which had previously not been known to have infected humans.

Signs to look for with COVID-19 are breathing problems, cough, fever, respiratory problems and shortness of breath. In most cases, the virus is fairly innocuous and only creates mild conditions in the sufferer. More severe complications can lead to acute conditions such as kidney failure, pneumonia, respiratory syndrome and worst-case scenario even death.


Find out how gold investment can provide a safe haven against market downturns. Click here


Mortality rates are not yet fully known, although the World Health Organisation estimates that between 1-2% of people infected with the virus will die. There is as of the time of writing (25th February 2020) no known vaccine, although research to create a vaccine is being undertaken rapidly around the world.

Coronavirus and gold prices
The COVID-19 coronavirus is causing concerns about a global pandemic

Why are there fears of a pandemic?

As I write the World Health Organisation says: “The World must prepare for a COVID-19 pandemic”. This doesn’t necessarily mean a pandemic will occur, but the world needs at least to be prepared.

According to the Merriam Webster Dictionary a definition for a pandemic is:

“An outbreak of a disease that occurs over a wide geographic area and affects an exceptionally high proportion of the population. A pandemic outbreak of a disease.”

Currently, there have been 77,000 cases in China and 1,200 other cases around the world, which are spread over 30 countries. According to the NHS, COVID-19 is a High Consequence Infectious Disease. Although, seen as a lower-mortality rate than SARS and previous viruses it is the infectiousness of COVID-19 that makes a pandemic likely. The virus spreads itself mainly through the air but also can spread through bodily contact.

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Reasons why the COVID-19 coronavirus outbreak is likely to increase gold prices

Now what you may be wondering will the impact of COVID-19 have upon gold and other precious metal prices? We summarise some of the main impacts below:

  • Avoid risk and losses/investment channel switch – many investors will simply “ditch” some forms of investments (e.g. stocks and currency) and move to precious metals until the risk is reduced/eliminated
  • Mitigate market uncertainty – investors are likely to have a balanced portfolio of investments. To mitigate market risks, investors are likely to switch at least a proportion of their portfolio into safe haven investments such as gold and silver

The recent surge in gold prices

On February 24th, the Dow Jones Index fell 3.5%, the UK FTSE fell 3.3% and the Milan stock market fell 6% (mainly because Italy had a large outbreak). These wiped out an entire year’s worth of index gain on the Dow Jones in just one day. Companies with high exposure to China (Disney, Nike and Apple) and travel companies were most affected with EasyJet falling 16.7% in one day and British Airways falling in price.

Coronavirus and gold prices
Events such as the coronavirus COVID-19 outbreak cause investors to seek safe haven investments

As shares are sold, generally investors will look for an alternative asset-class to invest their funds into (typically safe havens). Conversely to shares, gold prices hit a 7-year high on February 24th 2020. The reasons for this price rise are multi-faceted (as changes in gold price always are) but undoubtedly an underlying tension about the possible global economic impact of COVID-19 is the main factor.

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Most Analysts believe that gold prices will continue to rise, particularly in the short to medium-term. Investors are currently moving out of stocks/shares and currencies and investing in safe haven assets such as gold and silver.

It proves once again that investors value the tangibility of gold and at times of economic uncertainty, investors value investments they can “feel and touch”, especially ones which can be used as a highly liquid alternative form of currency to traditional cash.

Buy gold and silver as a safe haven investment from Physical Gold Limited

The team at Physical Gold have vast experience in precious metals trading. Check our About Us page to view our accreditations and trade memberships.

 

Call us today on 020 7060 9992 or email us to contact the team. We can speak about your current circumstances and suggest the best gold/silver investment strategies to meet your needs.

 

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Are New Gold Sovereign coins better value than old ones?

Gold Sovereign coins tick all the boxes

There’s no doubt that Sovereigns tick all the boxes for the gold investor, especially in the UK. They’re good value compared to many other coins, small and therefore very divisible, very well known and liquid and Capital Gains Tax free to UK residents.

However, Gold Sovereign coins fall into two main categories. Brand new mint condition Sovereigns still in their Royal Mint laminate blister pack and circulated older sovereigns. So, which should you buy?

Firstly, it’s important to point out that collectors may have different motivations for investors, and they may overlook value to complete their collections. From an investment angle though, it’s always important to be ruled by your head and not your heart. Collectors may also be happy to pay significant premiums for proof Sovereigns (perhaps 20% or more), but the investor should steer clear of proof coins and stick to bullion versions unless you can buy at the same sort of price.


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Indeed, the first place most gold investors will start is price. Usually, I’d recommend that aPHYS01_Animated_Gif_2_MPU
Sovereign buyer opts for older coins for the simple fact that you can pick them up for about 3% less than brand new ones. When it comes to selling them back, you’d probably receive 1% less than for a new one so you’re up 2% net. So that’s the end of the story……

Lack of supply

…except that right now there is a distinct shortage of second hand Sovereign gold coins on the market. If you are able to source some, premiums on them are higher than that of new Sovereigns, reflecting the lack of supply.

Alternatively, if you wait in the hope that the lack of old gold Sovereign coins supply will loosen, there is the real possibility that the underlying gold market price will move up from its current position. While some buyers obsess about the premium they’re paying for gold, it is the shrewd investor who realises that it’s the absolute price you pay and not the premium which will determine your level of return. It’s pointless waiting 3 months for the premium on circulated Sovereigns to fall 5% if the underlying price rises by 10% in that time!


Watch our video, “5 Reasons to buy gold sovereigns” a Physical Gold Ltd. YouTube video.

Either way, we’ve seen the underlying gold price fall significantly in December and it has only just started to rise again over the past week. With European debt issues intensifying, everyone agrees that gold should make strong gains this year. The recent price dip at the end of 2011 represents a great buying opportunity.

So for my mind, it’s best to act now before the price runs away, and as it stands Brand New Sovereigns ARE better value than old ones. They’re cheaper to buy, easier to sell (as they’re in perfect condition), and you’ll receive a higher price when you do choose to liquidate.

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The advantages of buying newer issues

Buying gold Sovereigns that are newer has a few distinct advantages. As discussed earlier, older sovereigns tend to attract larger premiums due to rarity and age. So, by buying recent editions which do not attract such premiums, you can get yourself a good deal and extract greater value by purchasing them at lower price points. Since the demand for sovereigns far outstrips their supply, you can expect a good sale price for these in the years to come and maximise your profits. However, a smart tip to remember is that one should stay away from purchasing these coins in December since premiums start to rise around this time, as buyers anticipate the following year’s issue.

So, as long as you buy current issues at any other time, you can take advantage of the huge popularity of these bullion coins. They are minted by the Royal Mint in substantial quantities and should be available with most dealers in large numbers. Indeed, availability is one of the greatest advantages of buying current issues of the UK gold Sovereign. Needless to say, you can also secure good discounts if you buy the coin in large volumes. Do not restrict your purchases to a single dealer. You will need to shop around in order to get the best deals.

new gold sovereign coins vs old gold sovereign coins
A UK gold Sovereign issued in 1838
This coin is one of those used to convey James Smithson’s bequest to the United States for the creation of the Smithsonian Institution. James Smithson was born in 1765 as the illegitimate son of Sir Hugh Smithson, later known as Sir Hugh Percy, Baronet, 1st Duke of Northumberland, K.G., and Elizabeth Hungerford Keate.
Elizabeth Keate had been married to James Macie, and so Smithson first bore the name of James Lewis Macie. His mother later married Mark Dickinson, by whom she had another son. When she died in 1800, he and his half-brother inherited a sizable estate. He changed his name at this time from “Macie” to “Smithson.”
James Smithson died June 27, 1829, in Genoa, Italy. His will left his fortune to his nephew, son of his half-brother, but stipulated that if that nephew died without children (legitimate or illegitimate), the money should go “to the United States of America, to found at Washington, under the name of the Smithsonian Institution, an establishment for the increase and diffusion of knowledge among men.”
The nephew, Henry Hungerford Dickinson, died without heirs in 1835, and Smithson’s bequest was accepted in 1836 by the United States Congress. Smithson never visited the United States, and the reason for his generous bequest is unknown. The gift was the foundation grant for the Smithsonian Institution.
The Smithson bequest consisted of 104,960 gold sovereigns. Presumably, they all bore the head of the new Queen Victoria, who had acceded to the throne in 1837.
The United States insisted on new sovereigns rather than circulated ones for a very practical reason: the United States would get more gold that way. All but two coins were melted down, reminted as American coins, and spent. The last two originals are in the Smithsonian collection.

Always try to buy larger Sovereigns

Another great tip that I am happy to share with you is that you can gain certain advantages by opting to buy larger Sovereign coins. The logic behind this is quite simple. Smaller coins carry higher production costs. The costs involved in designing and cutting smaller coins is greater than production costs of larger gold coins. Due to this reason, larger coins are available at a lower price per gram.

Insider's Guide to gold and silver

Many investors prefer this option as it enables them to acquire more gold for their money. So, this can be a great strategy, especially if you intend to purchase Sovereigns in large quantities. An ideal choice, in this case, would be the quintuple Sovereign. This coin is popularly known as the 5-pound gold coin. You need to be aware that certain dealers do charge a premium for commemorative issues. So, steer clear of these premium deals and you can grab yourself a great bargain. The size of the quintuple Sovereign enables the coin to benefit from lower production costs and is a perfect choice for any gold portfolio.

Call us to discuss how to buy gold Sovereigns

In summary, the UK gold Sovereign is a ubiquitous choice for any serious gold investor. The coin is one of the most reputed in the world and is considered to be a flagship coin for investment, very much like the gold Britannia. Physical Gold has a team of gold investment experts who can help you make the right decisions when it comes to buying a coin of the stature of a gold Sovereign.

The advice we impart to you is backed by solid research on the availability, demand and price of the gold Sovereign. Reaching out to us is relatively simple. Just call us on 020 7060 9992, or simply drop us an email. A member of our team will contact you and help you choose the right gold Sovereigns for your portfolio.

 

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Counterparty Risk: Risky Business…

The global spread of counterparty risk

Before the demise of Lehmans, AIG and the collapse of thousands of other financial powerhouses – the words “Counterparty risk” was generally used as more of a conjectural concept. Today the phrase is used to describe both the cause and effect of our global financial status-quo. Counter-party risk reduces confidence in financial instruments. Savings accounts, government bonds and low risk equities are now seen as a matter of last resort owing to its higher risk and lower reward reputation. The literary meaning of a savings account defies the purpose in which it should be used. It’s difficult to save if the level of return is less than the rising costs of living. It’s impossible to save, if the institution responsible for holding your savings has ceased to exist. The phenomenon of counter party risk goes beyond possible and now exists in a wide and spreading sphere of probable.

People can lose money in financial instruments regardless of the vigour of their investment.

Third party ownership of assets creates counterparty risks

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Owning an undervalued mining stock with great earning potential and little (perceived) downside risk still attracts the prospect of a board of directors manipulating its value. Equally, its bank’s reluctance to lend money and/or inflated borrowing rates has contributed to the demise of many companies over the last few years.  Whilst Gold ETF’s track the price of physical gold – if a large proportion of holders were to sell their holdings, there wouldn’t be enough physical gold to cover peoples’ investments.  The most prevalent example of counterparty risk is buying a low yielding government bond in Greece 7 years ago, only to discover that investors were forced to write up to 50% off their investments.

In order to save money, you need to be earning more than inflation (3.6%) in addition to any currency devaluation. In order to have themoney you need to ensure you have minimised counterparty risk by taking ownership and possession of the investment you have bought. Precious metals are an obvious example of this with the population turning to gold in times of austerity. Often the causes and effects of counter-party risk are the same:

Causes & Effects of Counterparty Risk

  • 3rd parties taking uncalculated risk’s
  • Exposure to debt in weak markets (e.g. Greece)
  • Cost of borrowing increased
  • Overall confidence diminished – reduces amount of cash and/or investment in entity
  • Legal wrangling and unfavourable settlements diminish profit (e.g Payment Protection Insurance)
  • Foreign Exchange exposures prevalent in uncertain markets
  • Exposure to rouge traders

How physical gold investments beat counterparty risk

Physical gold is considered to be a safe bet. Several factors in the financial markets established physical gold investments as a safe asset class. One of the prominent factors is the lack of counterparty risk. As explained earlier, counterparty risks exist when the fulfilment of an investment is dependent on a third party. Stocks and shares of listed companies depend on the performance of that company. In order to generate returns, the stock must perform well in the equity markets. However, holding gold in its physical form nullifies this risk, as the asset is owned and controlled by you. Many people enquire about the advantages of buying gold in its electronic form. This is otherwise known as a gold ETF.

Insider's Guide to gold and silver

Many investors do not realise that gold ETFs are equally subject to counterparty risks. In many cases, the company that issues the ETF sells large quantities of the paper investment, without ensuring that it is appropriately backed by sufficient gold holdings. As a result, if several investors wish to call back their investments, it becomes impossible for the company to fulfil the payback. In this way, almost every investment vehicle that is linked to the global capital markets carry counterparty risks. The only way to nullify these risks is to own immovable or tangible assets like gold, silver, real estate, etc.

Counterparty risk
All kinds of physical gold, including jewellery, mitigates counterparty risk

Will counterparty risk continue to rise?

The last financial disaster of 2008 witnessed the demise of large financial institutions like Northern Rock and Lehman Bros. Once again, 12 years down the line, the world is poised to face another possible financial debacle. Government debts are on the rise in several developed economies around the world. The collapse of the Greek economy in 2008 was partially due to the country’s government debt being disproportionate to the GDP.

Currently, China’s government debt is estimated to be 300% of the country’s GDP. If we look at the world around us, we realise that increasingly, companies and financial institutions are declaring bankruptcy. In the UK, there is a real risk of a housing market collapse. Downward adjustments of credit ratings are on the rise. Additionally, there is economic uncertainty created by political events like Brexit.


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All of these factors will continue to put pressure on the global economy and create a toxic situation that could result in yet another global economic crisis. This will lead to a significant decrease in the number of counterparties that are willing and able to take on the risks of global institutional investors. Many watchful investors have already started moving their investments to gold. The current spot price of gold has risen to around $1600 and continues to rise, inching closer and closer towards the all-time market high of 2011. Clearly, investors are moving to the safe haven of gold.

Call us to discuss how you can protect your investments

At Physical Gold, the investment advice we impart to investors like yourself is backed by research on the global economy, capital markets, bond markets, commodities and precious metals. Our advisors are best placed to guide you on how to minimise your risks. In the current economic climate. Call our team on (020) 7060 9992 or get in touch with us via our website. We can help you build a safe and robust precious metals portfolio that can protect your investments.

 

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What Silver Coins to Invest In?

What are the best silver coins to invest in?

There has been great interest in silver in the recent past. The silver market has become buoyant with positive sentiment over expectations of huge price rises in the future. When buying silver, it makes more sense to invest in coins, rather than silver bars, although a mix of both can be desirable for your portfolio. These choices are likely to be governed by individual investment objectives. Having said that, what are the best choices out there in the silver coins’ market?

The silver Britannia

The best coins to invest in for UK investors are the Royal Mint produced coins. The UK silver Britannia should form the backbone of the investment as the standard coin is cheap but very liquid. Premiums are low, as it is a mass-produced bullion coin. The upside potential of buying these coins is tremendous, as it enjoys great availability. Buying large quantities of these coins from dealers can get you hefty discounts.

The Royal Mint issues regular additions of this coin, so, buying the current edition will ensure that you pay little or no premium at all. The Britannia is legal tender in the UK, making it highly tax-efficient in terms of CGT. This is likely to be an advantage for investors who want to cash in their profits after the price of silver rises.

What Silver Coins to Invest In?
The silver Britannia is a highly collectable coin

Combining Britannia investments with some more limited issue coins such as the Queens Beasts and Lunar series will provide portfolio balance and create the chance to benefit from these coins rising in value quicker due to limited issue.

The Lunar series

One of the great flagship coins launched by the Royal Mint is the Lunar series. It is a set of coins that features a different animal from the Chinese calendar for every issue. The 2019 issue depicts the year of the pig, according to the Chinese calendar. These coins are a must-buy, due to their collectability – there are 12 coins in the set. Each coin has a limited mintage and demand is great due to its popularity in Asia. So, investing in these coins can make your tidy profit, as the demand pushes prices up.

Insider's Guide to gold and silver

The Queen’s Beast series

The silver Queen’s Beast coins, that are minted by the Royal Mint is yet another beauty. This coin can add great variety to your collection as two sizes are available – a 2-ounce version and a large 10-ounce coin. Once again, they have great collectability value and are tax-efficient. All UK silver coins have the advantage of being Capital Gains Tax-free.

The silver Krugerrand

It is one of the best-known coins in the world and benefits from a very strong secondary market. Investing in the silver Krugerrand ensures great liquidity for your portfolio. The silver version has recently been launched in 2018 and it makes a great addition to any silver portfolio in terms of value and liquidity.

We can help you select the right silver coins

At Physical Gold, our silver investment experts can discuss your investment objectives and suggest the best silver and gold coins to buy. The current gold-silver ratio is around 88:1, so you can purchase quite a large amount of silver for your money compared to when you buy gold. The guidance you receive from our team can ensure that you make the right investment decisions. Call us today on (020) 7060 9992 or contact us via our website to find out more.

 

 

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Gold Investment and Risk

Gold Investment’s impact on risk

Most gold investors believe in buying and owning gold in its physical form. Needless to say, this has been a tried and tested strategy for thousands of years. Cities and civilisations have fallen, but the yellow metal has lasted the test of time. But, in today’s modern-day and age, there are innumerable asset classes to invest in. So, the obvious question in the minds of investors is – is it worth investing in gold?

While deemed as low risk, gold investment isn’t completely risk-free. We investigate gold investment and risk in this latest article.

Market risk

The first risk is that the gold price moves lower in the time you hold the gold, known as market risk. This becomes less likely over the medium term, as any market volatility is ironed out.

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Lack of counterparty risks

If buying paper gold, there are further risks such as possible leveraging of the asset and counterparty risk. Paper asset classes like equities and fixed income instruments like bonds are dependent on the performance of the global capital markets, as well as companies that issue these investment papers. This is known as counterparty risk. If the company that issued your stocks or bonds fails to perform, or there is a crash in the global capital markets, your investment can quickly erode and be rendered useless. Physical gold, on the other hand, is safe from these risks, making it an excellent investment.

Gold Investment Risk
Physical gold investments are seen as stable and safe

A safe haven

It is a well-known fact that investors quickly turned to gold during times of financial turmoil. The spot price of gold reached its highest level at the peak of the global financial crisis in 2011. Now, more than ever, the world is once again moving towards another similar financial crisis. Therefore, the current spot price of gold has crossed the $1600 mark, inching steadily closer to the peak of 2011.

Beating the risk of inflation

Inflation is a key factor that needs to be considered when evaluating the returns on any kind of investment. When you receive returns of 6%, the actual return you make could only be 3%, if the rate of inflation at the time is 3%. The rate of inflation is a moving number, just like the capital or commodity markets. Interestingly, gold has historically beaten the rate of inflation, providing stability to investors and preserving their wealth.


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Tax efficiency

As a UK investor, you are subject to value-added tax (VAT) and capital gains tax (CGT). Interestingly, gold investments (like gold coins and gold bars) are incredibly tax-efficient, depending on the type of investments you choose. All investment-grade gold is VAT exempt in the UK. At the same time, investing in gold coins (such as gold Sovereigns and gold Britannias) helps you avoid capital gains tax, as these coins are considered to be legal tender in the country.

Hedging against risks of currency devaluation

Over the last few years, we have seen the decline of traditionally strong currencies like the Euro and the GBP, owing to political instability caused by events like Brexit. There is still plenty of uncertainty in post-Brexit UK. Investing in gold helps you escape from the risks of falling currencies.

Get in touch with us to plan your gold investments

There are so many reasons to invest in gold in 2020, apart from the ones we have discussed above. Liquidity is another great attribute that gold enjoys, in addition to the balance, it can provide within a diversified portfolio. Our investment experts can help you plan your silver and gold investments and protect your wealth. Call the Physical Gold team on (020) 7060 9992 or get in touch with us online.

 

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Gold Britannia vs Gold Sovereign coins

Gold Sovereigns versus Britannias

Building a strong gold portfolio can be a challenging task, requiring an investor to study the different gold coins available in the market. Two of the most popular British coins that have stood the test of time are undoubtedly the Gold Britannia and the Gold Sovereign. Either coin holds an important place in your portfolio, so it’s worth finding out the pros and cons of investing in these coins, based on certain key attributes.

Variety

Variety is the key consideration when choosing gold coins for your portfolio. Coins that have a wide range of issues, sizes and denominations are likely to enhance the value of your portfolio. The Sovereign is an obvious choice if variety is to be considered. The iconic British coin has been around for more than 200 years and several issues through the reigns of different monarchs are available in a wide variety of choices. There are plenty of sizes to choose from, including the half, double and quintuple Sovereign.


Download the 7 Crucial Considerations To Buying Tax Free Gold Coins Here


If we take a close look at the reign of Queen Victoria, we can find sovereigns that feature the great Queen’s young and old portrait, and also the Jubilee head. Therefore, choosing sovereigns create great value, as well as balance for your portfolio. The Britannia has only ever featured Queen Elizabeth on its obverse, whereas the Sovereign has contained numerous monarchs.

Gold Britannia vs Gold Sovereign coins
The gold sovereign provides great variety for a portfolio

Value

Most investors find it lucrative to purchase coins that offer more quantity of gold for the price.

Gold Britannias provide a lower price per gram than Sovereigns due to being four times the size. Both fetch similar prices per gram when being sold and both are Capital Gains Tax-free due to their legal tender status. It’s also important to note that many issues of the Sovereign carry hefty premiums due to their historical value. However, the gold Britannia is available at far lower premiums, since it is a more recent coin. The Britannia is four times larger than the Sovereign, making it a more expensive coin. Lower stake investors could find its purchase to be way beyond their means, while the Sovereign provides easier access to the gold market for these investors.

Divisibility

The Sovereign’s smaller size offers more divisibility, PHYS01_Animated_Gif_2_MPUand their longer existence (200 years versus only 30 years for the Britannia), provides far more variety and choice. If we compare the Sovereign with the Britannia, it becomes increasingly evident that the coin is a winner when it comes to divisibility. The sovereign is easily available in different sizes and denominations, which gives investors the flexibility to cash in at various price points in the market by selling different sizes and denominations, as and when required.

Liquidity

Both the coins enjoy an extremely strong secondary market, making it easy to sell at any point in time. Liquidity is an important consideration when investing in gold coins. Investing in illiquid coins defeats the very purpose of your investment, as you may be unable to realise its value at a time when you need it most.

Choosing the right coin

Daniel Fisher, CEO of Physical Gold provides a guideline to choosing these coins in a fascinating video released by the company. According to him, the choices are guided by the portfolio size. For a smaller portfolio of around £2,000 – £5,000, Sovereigns are a better choice. However, if the portfolio size is in excess of £10,000, the Britannia should be included.

Call the experts at Physical Gold to make the right choice

Our investment experts can help answer all your questions about investing in gold coins, whether you want to buy the gold Britannia or the Sovereign. Call us today on 020) 7060 9992 or simply drop us an email. A member of our team will be in touch with you right away.

 

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