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Gold Investment vs Property?

Property ownership has always been the holy grail of most UK residents. As a country, we are seen as a nation of property owners. In many ways, this makes sense. After all, why should you rent a property to provide an income for a landlord, if you can acquire your own? Over the last three decades, this sentiment has been targeted by mortgage providers and banks.

Easy property acquisition

The late 80s, 90s and early 2000s were a time when mortgages could be acquired for next to nothing. Banks were willing to fund up to 95% of the value of the property, with easy terms of payback. Many people re-mortgaged their properties after paying back the loan, to simply acquire capital based on the equity value that the property had accrued. However, the 2008 financial crisis and the decade that followed has made property acquisition more difficult. Now, the property that you bought and you’re living in cannot be considered an investment. An investment property is usually a second property that you have purchased to rent out and make profits on its equity value, as property prices rise. Of course, the increments in value would vary on the location and size of the property.

Gold Investment vs Property?
The UK is a country of homeowners

Comparing gold investments with properties

Both are asset classes worth considering when constructing a portfolio. Due to the physical nature of the assets, both are tangible investments that do not carry counterparty risks. However, the two asset classes behave quite differently. Property markets are subject to volatility depending on the economic situation in the country. The 2008 financial crisis was triggered off in the US when large numbers of people defaulted on their sub-prime mortgages. Banks and mortgage providers are not in the core business of buying and selling property. Therefore, when a large number of foreclosures happen, the bank is stuck with all these properties and the value plummets fast.

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Property investments also carry additional costs like council tax, if not rented and maintenance costs. However, gold investments do not have any counterparty risks or maintenance costs. Also, the sale of a property may take a substantial amount of time, while gold enjoys far greater liquidity and the returns are immediate. Both investments tend to appeal to the same people as they share their tangible nature and appeal to those worried about the true value of paper assets. Both perform extremely well over the long term but can be volatile. This volatility can provide buying opportunities in both gold and property investment. The UK property market has taken a significant hit recently.

Gold Investment vs Property?
Gold investments are free from capital market downturns

Property markets react adversely to an economic crisis

Property markets are prone to devaluation when the country’s economy is plunged into crisis. Gold, on the other hand, has an inverse relationship with poorly performing stock markets, money markets and the economy. When the world goes into crisis, investors move to gold. This is evident from the gold peaks that we witnessed during 2011 and 2020. Therefore, we can surmise that investments in an immovable asset class like real estate carry greater disadvantages than gold investments.

Discuss your investment strategy with Physical Gold

Physical Gold is one of the most reputed UK gold dealers, and the company’s investment team offers free advice to investors on the right asset classes to invest in. Call us today on (020) 7060 9992. Alternatively, you can also reach our investment team by getting in touch online via our website. We look forward to hearing from you.

 

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Where to Buy Gold Bars for Investment?

While some investors prefer gold coins, others prefer gold bars. Gold bars can be a great repository of value and they are a vehicle for investors who believe in owning a tangible asset like a chunk of gold, in the form of a gold bar. Let us now explore why gold bars can be a great addition to your portfolio and where to buy them.

Advantages of investing in a gold bar

Gold bars present an attractive value proposition for investors because they provide an opportunity to buy gold at a lower price per gram. This is possible because the manufacturing costs of producing a gold bar is lesser than minting a coin. Gold bars do not carry an intricate design element.

The bars are produced by pouring liquid gold into a mould, and the purity value and the refiner stamp is engraved on the bar. Gold bars also come in a variety of sizes and weights. There are large gold bars that can weigh a kilo. However, if you are buying gold bars to strengthen your portfolio, it is better to invest in smaller bars than larger ones. This creates divisibility, variety, and liquidity for your portfolio.

Insider's Guide to gold and silver

This approach can provide advantages when selling. Investing in a large gold bar like a kilo simply means that you have to let go of a large quantity of gold at a single price point in the market. However, selling smaller bars allows you to take advantage of the price movements and generate better profits.

Where to Buy Gold Bars for Investment?
Gold bars offer investment-grade gold at a lower price per gram

Avoid premium brands

Premium brands like PAMP or Metalor can be attractive to investors, however, remember that you are paying a premium simply for the brand name. When buying a gold bar, the only things you need to check are the refiner stamp, serial number, weight, and purity value. It’s often a good idea to invest in pre-owned bars, as they provide better value for money with the same gold content.

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Where should you go to buy a gold bar?

There are many options available to investors if they wish to purchase a gold bar. There are high-street gold dealers or jewellers who can sell you a gold bar. Alternatively, you can also find gold bars on auction sites like eBay. But, should you buy an important and valuable investment product from these sources?

Where to Buy Gold Bars for Investment?
Investment-grade gold bars are VAT free in the UK

Gold investment bars should be bought from a professional dealer only. If you want to buy gold bullion bars, then they should also come with a serial number, be certified and have a purity of 999.9 at least. Don’t be tempted to buy lower grade bars or from eBay. Finding a reputed UK gold dealer is the first step you should take when buying a gold bar for investment.

How can you identify a reputed UK gold dealer??

Most reputed gold dealers in the UK will be registered with the British Numismatic Trade Association (BNTA). So, by visiting their website, you can easily shortlist several reputed gold dealers near you. The next step is to call them and find out if they provide a certificate of authenticity and a buyback scheme. Most reputed dealers will also offer free advice for you to buy the best gold bars.

Talk to Physical Gold about buying your gold bars

Physical Gold is a highly reputed UK gold dealer and the company’s investment team offers free advice on buying gold bars to investors like you. Call us on (020) 7060 9992 or reach out to us online via our website. Our investment team will be happy to answer your queries and advise you on buying the right gold bars for your portfolio.

 

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How to Buy Gold Investment Coins?

Gold coins have been a source of great attraction for many individuals over centuries. Numismatists who collect gold coins are thrilled with the idea of acquiring a precious and rare gold coin. Investors choose to buy gold bullion coins due to the returns they can make on their investment. Of course, there are certain compelling advantages to buying gold coins.

They are easy to store and often come packaged in monster boxes. They provide divisibility to an investor’s gold portfolio. Also, they have a certain aesthetic value, which many investors prefer over gold bars. However, if you’re thinking of investing in gold coins, there are certain parameters to be aware of.

How to Buy Gold Investment Coins?
Gold coins are a fascinating investment

Checking gold coin authenticity

How will you know that the gold coins, you have just invested in are authentic? You will need the services of a gold expert who can certify the authenticity of the coins. But, there are certain checks you can do at home that can help you decide whether the coins are genuine or not. Gold, like other precious metals, has a high density. Therefore, the size of the coin would depend on its weight.

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If the gold content of the coin has been tampered with and a certain percentage of base metals introduced into the coin, it will be lighter than it should be. Therefore, you can measure the diameter, thickness, and weight of the coin. To do this test at home, you will require a set of Vernier callipers and a weighing scale used by jewellers. You can also use a magnet to detect the purity of gold in the coin. Since gold is non-magnetic, a pure gold coin will not be attracted by a magnet. There is also a device called the Fisch Tester that allows you to test popular gold coins like the Krugerrand or the Gold Britannia.

How to Buy Gold Investment Coins?
Gold weighing scales are often used by jewellers

Apps to test your gold coins

Yes, in 2021, there is an app to test gold coins as well. These apps emit a sound and generate a ‘ping test’ by measuring the echo your coin produces. One of these apps is called Coin Trust and there is a drop-down menu that allows you to select the particular coin you’re testing and proceed from there.

Buy your gold coins from a reputed coin dealer

If you know which coins to buy, then simply purchase them online from a trustworthy broker. If you need guidance as to which gold investment coins to buy, then any good dealer will be able to advise you. Generally, stick to bullion finish coins, rather than proof finish, and only buy really well-known coins. In the UK, Sovereigns and Britannias are best as they’re also tax-free.

10 commandments

The simplest way to buy authentic and genuine gold coins, without going through the hassle of testing them at home is to buy your gold from a reputed UK dealer. Most reputed dealers will provide you with a certificate of authenticity, which is stamped by a coin certification agency like the PCGS or NGC. Storing the gold coin is important and you should never remove the coin from its original packaging so that there are no doubts regarding genuineness when you want to sell the coin.

Call Physical Gold to find out more about buying gold coins

Physical Gold is one of the U.K.’s most reputed gold dealers and has a team at your service that can guide you on how to buy gold coins and advise you on the authenticity of the coins you own. Please reach out to us on (020) 7060 9992, or simply send us an email and our team will connect with you to help you purchase the right gold coins.

 

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Gold Investment vs Fixed Deposits

Managing a good personal portfolio can allow you to retire peacefully, knowing that you have a nest egg to fall back upon. Diversifying an investment portfolio is always a good practice. But, asset allocation is the most important thing. Identifying the right asset classes that will bring good returns to your portfolio can be tricky. Gold has always been an asset class that has attracted investors due to the stable returns generated by the precious metal. It is also a great store of wealth and provides investors with an opportunity to hedge their risks. In this article, we will explore the pros and cons of putting your money into fixed deposits and how this asset class compares to gold.

Why invest in fixed deposits?

Most UK high street banks have different fixed deposit schemes that generate steady returns over time. If you already hold an account with a high-street bank, applying for a fixed-term deposit is easy. So, the three main conditions that you need to fulfil when applying for a fixed deposit is that you must be over 18 years of age, have an account with the bank and be a UK resident.


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You can invest your money with the bank for a fixed term, which is usually six, nine or 12 months. Another feature of these schemes is that the interest rate is also fixed. So, if the Bank of England base rate changes during the term of your fixed deposit, there will be no change in the interest rates provided to you. A popular fixed deposit scheme is the ISA.

Gold Investment vs Fixed Deposits
High street banks like NatWest are popular for their ISA schemes

What are the other features of fixed deposits?

There are a few other features of fixed deposits that we need to be aware of. Most high-street banks have a minimum deposit that you must make. For example, NatWest asks for a minimum deposit of £5,000. Also, once you start the deposit scheme, you cannot add or withdraw money from that account. You have to invest your money for the entire term period.

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Cash ISA accounts

A cash ISA is a popular scheme because you can take advantage of the tax-free allowance every year. The current tax-free allowance for an ISA is £20,000 during the financial year 2021/2022. A cash ISA can also be opened with only £1. However, fixed-rate ISAs are a different product available from many high-street banks. The minimum deposit amount is lower than other fixed-term deposit schemes. For example, to open a fixed rate ISA with NatWest, you need to invest £1000.

Gold Investment vs Fixed Deposits
Gold investments generate better returns than fixed deposits

Gold versus fixed deposits

Overall gold is better than cash in the bank. Fixed deposits such as cash ISAs and bank deposits promise an explicit and predictable returnGold investment, on the other hand, can go down or up in value and at various rates. The current low-interest-rate environment means that fixed deposits offer 1% or lower returns. This can even be taxed if outside of an ISA, reducing the yield still further. These rates are well below inflation which means the value of your money is diminishing in real terms. Gold is riskier in the short term but has the ability for high returns and at a minimum, has proved to beat inflation, successfully acting as a store of wealth. Buying UK gold coins is also tax-free.

Insider's Guide to gold and silver

Importantly, the returns generated by gold over the short term is far greater than investing in a high-street bank deposit. Bank deposits also carry counterparty risks. If the bank goes out of business, it may be difficult for you to recover your money. If we examine gold price charts over 20 years, it becomes clear that gold has always generated steady returns over decades. However, interest rates in the UK have fallen abysmally over the last 20 years and were only 0.5% during the 2008 financial crisis.

Discuss your investment plans with Physical Gold

If you are building a portfolio that can bring you peace of mind during your retirement years, talk to our investment experts. At Physical Gold, we are happy to offer free advice to investors and explain how you can maximise your returns by investing in precious metals. Call us on (020) 7060 9992 or simply drop us an email via our website.

 

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How Safe is Gold Investing?

Over centuries, gold has remained an asset class that investors can trust. Investors have repeatedly turned to gold during periods of economic uncertainty. Gold is generally seen as a precious metal that generates steady returns over the short term. In recent years, the world has been plagued by economic crisis and investors have always turned to gold. A glaring example from the recent past is the highest peak price ever achieved by gold in August 2020, when it touched close to $2,000 per ounce. However, with all the interest in gold, it is pertinent to find out about the safety of gold investments.

How Safe is Gold Investing?
Investors enjoy the safety of gold

Gold as insurance for investors

In 2011, during the peak of the 2008 financial crisis, gold breached the $1,900 barrier for the first time. The collapse of Lehman Bros was quickly followed by the downfall of many UK banks and investors lost their confidence in the global economy and capital markets. Clearly, they decided to move their investments to gold as a safe haven. The partial recovery that the global capital markets made since those years was nipped in the bud by renewed economic uncertainty from many factors.Insider's Guide to gold and silver

Brexit created uncertainty across the European economies, while the US-China trade war and a host of other geopolitical factors ensured that the global economy never made a full recovery. This phase was followed by the global pandemic, which came upon us in 2020. By August 2020, gold had once again breached price barriers to reach a new high. Looking back at these events, we can conclude that investors frequently move to gold, due to the safety and security it provides.

Counterparty risks

Physical gold investments are also free from counterparty risks. These are risks associated with investments that are dependent on their fulfilment by a third party. If the market fails to perform, the stocks you buy or the mutual funds you invest in may shrink in value. However, gold investments are devoid of such risks, because it is a tangible asset that you own.

How Safe is Gold Investing?

Gold investments are not subject to counterparty risks

The rise and fall of gold prices

The gold price can go down as well as up, depending on supply and demand. Over the short term, there’s the risk that your investment could fall in value. Over the medium to long term, gold has proven to increase in value quicker than the inflation rate, proving to be a reliable store of wealth. Buying in paper form, like ETFs, gold futures or gold shares, poses further risks with leverage and counterparty exposure. Owning gold investment coins and bars negates both these risks.

Over the last 10 years, gold prices have never sunk below the $1,000 price point. While equity and debt investments, mutual funds, debentures or derivatives can all be devalued to a point where they are worth next to nothing, gold continues to have an intrinsic value that provides safety. If we look at price charts of gold during the mid-1990s, we can see that the price of gold was $400 an ounce in 1996. The value of gold quadrupled over 20 years and never looked back.

Get in touch with Physical Gold to discuss your gold investments

Physical Gold is one of the U.K.’s most reputed gold dealers. We provide free investment advice about any precious metal investments that you choose to make. We are always happy to discuss your investment plans and identify the best options that can generate optimal returns. Please call us on (020) 7060 9992 or contact us online and our investment team will be in touch with you right away.

 

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Gold Coins vs Bars?

Most investors prefer to invest in both gold coins and bars when building their portfolio. Gold coins are preferred by investors who have a numismatic interest. However, many investors prefer to buy bars. So, we need to understand the advantages and disadvantages of investing in coins or bars.

What are the important factors to consider when deciding to buy coins or bars?

Flexibility is an important attribute when building a strong portfolio. Due to this, coins scored higher than bars, due to their variety of issues, sizes, and denominations. For most, buying coins is better than bars for gold investment. Coins provide more flexibility to sell small parts of the holding and can fetch higher prices when you wish to sell. In the same way that larger bars are cheaper per gram than small ones, buying gold coins in bulk (such as Buying gold Sovereigns) will also achieve price discounts. UK investors also benefit from legal tender coins being tax-exempt, whereas gold bars are not. Owning part of a very large portfolio in 1kg gold bars can achieve modest price savings.

Gold Coins vs Bars?
Investors often invest in coins for the flexibility they provide

Gold bars have advantages too

Due to their lower production costs, some investors may find bars attractive. Moreover, it is not necessary to invest in large bars like a kilo. There are ample variety and different sizes amongst gold bars as well. Different refiners produce gold bars of various weights that can go all the way up to a kilo. There are 1-ounce bars in the market, as well as bars that weigh 10 g, 20 g, 50 g, 100 g, 250 g and 500 g. There are even smaller bars that weigh 5 g. So, as we can see there is sufficient diversity when investing in bars as well. One of the key considerations for investors when buying a gold bar is the cost of production. Gold bars often provide investors with the opportunity of acquiring gold at a cheaper price per gram.

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Your objectives can help you decide

Building a gold portfolio is a task that requires proper planning. So, setting your objectives is an important step before planning your purchases. It all depends on your investment timeframe and how quickly you want to make profits.

Gold Coins vs Bars?
A large gold bar can provide gold at a cheaper price per gram

If your objective is to amass quick returns from price rises in the short term, investing in coins can help you achieve this. However, many investors have longer time horizons for their investments and are interested in acquiring a larger volume of gold at the cheapest possible price. Such investors would be better off acquiring gold bars. However, as discussed earlier, it is possible to preserve the liquidity and divisibility of your portfolio, even when investing in gold bars. Investing in smaller bars like 5 or 10 g gives you the added advantage of being able to sell small amounts of your gold holdings at different price points in the market, whenever you need to raise capital.


Download the Insider’s Guide to buying gold coins and bars FREE here


Other important considerations

Tax efficiency is another important consideration and both coins and bars offer excellent choices. You can avoid paying VAT when you buy either. However, investments in gold bars may be subject to Capital Gains Tax (CGT). On the other hand, investments in UK legal tender gold coins like the Sovereign or the Britannia can help you stay tax efficient.

Another important point to think about is storage. Gold coins have a distinct advantage in this respect. When you order a large number of gold coins, they will arrive in monster boxes that can be easily stored.

Call us at Physical Gold to know more about buying coins or bars

At Physical Gold, we offer impartial and free advice to investors who wish to build their gold portfolio. Call us on (020) 7060 9992 or get in touch with us by email and we will be happy to help you make the right choices for your investments.

 

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Gold Investment vs Stocks?

Building a robust portfolio involves spreading your risk over different asset classes. However, as an investor, you need to consider the dynamics of each asset class that you invest in. Diversification can be an excellent initiative for shaping your portfolio, which will likely continue to evolve. This reorganisation is often due to prevailing market conditions at different points in time and the risks faced by equity and debt markets around the world. Many investors believe that gold should be an integral part of their portfolio, as it provides insurance against market risks. But, how can we compare gold investments against equities?

Gold Investment vs Stocks?
The New York Stock Exchange represents the centre of the global capital markets

The uncertainty faced by the global capital markets

Over the last two decades, the global capital markets have witnessed large degrees of turmoil. The fall of Lehman Bros kicked off the recession in 2008, which resulted in a debt crisis that affected financial institutions and countries all over the world. In 2019, debt levels in China were 300% of the country’s GDP. Australia was also mired in a debt crisis that saw individuals raking up debts up to 200% of their income levels.


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Uncertainty was looming over the US and European capital markets. Then, in 2020, the global pandemic hit the world. As global economies were affected by the impact of the crisis, companies started shutting down due to lockdown measures implemented in several countries across the world. By December 2020, government debt in Australia had almost doubled over four years. COVID-19 pushed the U.K.’s debt levels to £1.125 trillion with a debt to GDP ratio of 97.5%. Naturally, these are legitimate causes for concern when investing in stock markets, particularly at this point.

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Gold and the equity markets have an inverse relationship

A mixture of gold and stocks is ideal.  Both investments can rise or fall in value. However, while stocks can fall to zero (if a company goes bankrupt), physical gold will always have its intrinsic value. The equity and gold market have track records for recording great returns over the medium and long term. While stocks can pay a dividend as well as an increase in value, those partaking in gold investing are looking purely for capital gain. Gold tends to rise when stocks fall, so the two have an inverse relationship.

Gold Investment vs Stocks?
Gold investments are safe from the volatility of stock markets

Gold provides insurance for your portfolio

Therefore, it was no surprise that gold touched its highest ever level in August 2020. Over the last eight months, gold has climbed down from its $2,000 peak and is currently hovering around $1,745 per ounce. It is important to note that the price of gold has never fallen below the $1,000 mark in the last 10 years. It has continued to rise steadily and created value for investors over a 5 to 6 year period. Gold can also offset market forces like inflation and currency devaluation. In a debt crisis, investors often lose their confidence in hard currency is like the US dollar or GBP and move to gold. Since they are confident that gold will not devalue suddenly, it is a choice worth making.

Tax benefits of gold

Gold investors in the UK have certain advantages when investing in gold. Firstly, all investment-grade gold is exempt from VAT in the UK. Therefore, this knocks off 20% of your purchasing price. This is one of the reasons why gold is extremely attractive to investors. Secondly, investing in gold coins that are considered to be legal tender and have a face value can have even greater advantages. Gold coins that are legal tender are exempt from Capital Gains Tax (CGT). This means that you do not have to pay taxes on the profits you make from selling your gold up to a threshold of £12,000 in a single tax year.

Discuss your gold investments with Physical Gold

Physical Gold has an investment team that can help you compare the advantages and disadvantages of investing in global stock markets or gold. Please call us on (020) 7060 9992 and speak to a member of our team. You can also reach out to us online via our website and we will be happy to help you make the right investments to build a strong portfolio.

 

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Where to Buy Gold for Investment?

For the longest time, gold has been the investment class of choice for investors who wish to hedge their risks and build wealth. Gold is an asset class that does not suffer from the volatility of other asset classes like equities. Gold can deliver steady returns over the short term and provide insurance for an investor’s portfolio. The yellow metal also beats other market forces like inflation and currency devaluation. Therefore, many investors are keen to move their money to gold, especially during times of economic uncertainty.

The economic impact of the pandemic

The global pandemic caused by COVID-19 has affected capital markets around the world since 2020. Of course, the price of gold rose to its highest ever point in August 2020, as investors started to move their investments to gold. This crisis is not over yet, and many countries around the world are grappling with the public health crisis and economies around the world continue to suffer due to restrictions and lockdown.

Where to Buy Gold for Investment?
The Royal Mint produces beautiful coins, but they aren’t the best value for money

Buying investment-grade gold

As an investor, if you are thinking of purchasing gold to strengthen your portfolio, you need to be able to identify the right places to buy gold. There are many options, including high-street dealers, private auctions and online gold dealerships. However, many of these are fraught with risk, and it’s important to identify the safest avenues for your gold purchases.

Needless to say, high-street dealerships do not provide you with a wide range of gold products. Also, many would not give you a certificate of authenticity and there is no way for you to tell whether the gold you are buying is genuine or not. Similar risks would be encountered when buying gold from a private auction on sites like eBay.

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If you’re wondering where to buy gold for investment, then the best bet is to focus on specialist dealers. These brokers should be a member of the British Numismatic Trade Association (BNTA), have a track record and positive customer reviews. Many of these dealers will have an online shop with live pricing and offer quantity discounts on investments. The best ones will also provide free advice and guidance as to which are the most suitable coins and bars.

Where to Buy Gold for Investment?
It’s always important to check the authenticity of the gold you’re buying

The Royal Mint

One other option is the Royal Mint. The mint has been the torchbearer of British coinage for centuries. So, the gold coins that you buy from the mint can be trusted and they would also be immaculate in quality and condition. However, there are certain drawbacks to buying gold from the Royal Mint. They only sell new coins, avoiding circulated coins or bullion. The gold coins are sold at a premium and the mint does not offer a buyback scheme. Therefore, you can procure beautiful coins that come with great packaging from the mint. But, you would receive far less gold for your money, when compared to buying gold elsewhere.

Looking for a reliable gold dealer

The best place to buy investment-grade gold is from a UK gold dealer. The British Numismatic Trade Association (BNTA) publishes a list of gold dealers were registered with them on their website. This is the best place to start. Once you identify a few dealers, it is important to establish a relationship with them and explain your investment objectives. This can help the dealer identify the best deals for you and notify you when these come on the market. You need to ensure that the dealer provides a buyback scheme and a certificate of authenticity. Reliable dealers will also answer your queries and provide storage options, as well as an insured delivery service.

Insider's Guide to gold and silver

Talk to us before you purchase gold for investment

Physical Gold is one of the U.K.’s best-known, reliable and reputed gold dealerships. Our website can provide you with many options to build your gold portfolio and our experts are always happy to discuss your purchases and help you identify the best options. Call us today on (020) 7060 9992 or reach out to us online and we will be in touch right away.

 

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Is a Gold ETF a Good Investment?

Portfolio diversification is a key consideration for many investors. During a market downturn, like the one we witnessed throughout 2020 due to the global pandemic, many investors turned to gold. Other precious metals also witnessed healthy demand, but gold is generally seen as a safe asset class that is used to hedge market risks. The price of gold rose steadily throughout 2020 and eventually reached its highest point in August. However, many investors want to consider alternatives to buying physical gold. This can have the added advantage of further diversification for your investment portfolio.

Is a Gold ETF a Good Investment?
Physical gold avoids counterparty risk, but gold ETFs have certain advantages too.

What are gold ETFs?

A Gold ETF, otherwise known as an Exchange Traded Fund, is essentially a mutual fund that invests in gold. The fund may consider diverse routes of gold investments. These may not be limited to physical gold alone. Many ETFs invest in gold mining stocks, gold manufacturing companies and other gold-related investments. Of course, the fund would also invest in gold bars, coins and other types of physical gold. The fund can also invest in other forms of paper gold, like government bonds. These decisions are made by the fund manager and his team, who can acquire better margins in the market as an institutional investor. Retail investors would generally not have the opportunity to acquire gold at these prices

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Advantages of investing in gold ETFs

Buying a gold ETF can be a good investment to provide a safe haven element to your overall portfolio. The value of the ETF should rise when stock markets fall, providing a sound hedge against market downturns. As an electronic investment, it benefits from efficient buying and selling margins, but also poses additional counterparty risks that coins and bars do not.

 

Additionally, a gold ETF may be able to provide you with some additional benefits, listed below:

 

  • The fund provides a hedge against other market forces like inflation, currency devaluation and fluctuation in the currency markets.

 

  • Since gold ETFs are part of a regulated marketplace, you need not worry about local price fluctuations.

 

  • Anybody can invest in the fund during the operating hours of the stock exchanges. One need not worry about bargaining with gold dealers about premiums and price differences.

 

  • As an investor, you can use your gold ETFs as security collateral for obtaining loans from financial institutions.

 

  • Investments are simpler to make, and you need not worry about the risk of theft, paying locker charges, insurance costs or the costs associated with storing your gold securely.

 

  • Since the price of gold is not subject to large market fluctuations, investments in gold ETFs can stabilise your returns, even if equity investments are performing poorly.
Is a Gold ETF a Good Investment?
Gold ETFs can provide further diversification to an investor’s portfolio

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Disadvantages of gold ETFs

  • Counterparty risks – these are risks generally associated with any paper investments. If the fund or the company performs poorly, the value of your investments can erode quickly. So, it is a third party risk associated with your investments. When you buy gold in its physical form, you take control of the asset and these risks are non-existent
  • Your gold ETF investments can attract long-term Capital Gains Tax (CGT). After a year, you may be liable for paying certain taxes, however, in the UK, most investment-grade gold can be bought CGT free.
  • When investing in a gold ETF, you may need to pay certain brokerage charges. It’s important to shop around and find a good fund that levies minimal charges

Call us to find out more about gold investments

Physical Gold is one of the most reputed gold dealers in the country and our advisory team can assist you in making the best gold investments. Call us today on (020) 7060 9992 or reach out to us online via our website.

 

 

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Which is the Better Investment, Gold or Silver?

Gold as an investment class

Gold has historically been the precious metal of choice for most investors. During upheaval in the market, gold can provide safety and security for your investment portfolio. If we look back at every financial crisis, it is glaringly obvious that gold has risen to new heights during these times of uncertainty.

During the 2008 market crisis, gold reached its highest point in 2011. Similarly, at the height of the economic crisis created by the global pandemic last year, gold once again touched historical highs in August 2020. Even during a normal period in the market, gold performs steadily. Although the yellow metal may rise or fall in the course of market transactions, it does not suffer from extreme volatility. This makes it a fairly safe bet for most investors.

Which is the Better Investment Gold or Silver?
The silver Britannia is an excellent coin for investment

Silver investments can also be attractive for investors

But, does it make sense to invest in silver? The white metal is a lot cheaper than gold and provides investors with affordable and easy access to the precious metals markets. Due to the widening gold-silver ratio, an entry-level investor may find it more attractive to buy silver.

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For the amount of money that one may spend on buying gold, a substantial amount of silver can be acquired. Additionally, silver has suffered from production shortages in the last few years, while demand has risen substantially. As a metal, silver has certain sterling properties. It is one of the most conductive metals and also very ductile. Due to this, it is in demand across several industries like solar, electronics, electric vehicles, etc. Silver investors believe that the price of the white metal may escalate significantly in the years to come, and it may be prudent to lock in investments at low prices now. This may create a wonderful opportunity to reap profits when prices start to rise.

Should an investor buy both precious metals?

It’s actually most prudent to own a mix of both gold and silver. Gold is a more established safe-haven asset, so tends to gain more from market downturns and volatility. Silver can also perform well in these circumstances but also benefits when industrial demand for silver increases as it’s used so widely in electronics. While silver certainly has more opportunity for huge growth, gold is the steadier of the two.

Which is the Better Investment Gold or Silver?
Physical gold investments can generate better returns in the short term

Of course, there are certain advantages and disadvantages of buying silver. For example, an investor may need to pay VAT on most silver investments. This can escalate the buying price by 20%. Silver coins that are legal tender in the UK can qualify for Capital Gains Tax (CGT) exemption. However, other silver investments may not.


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Investment factors that need to be considered

Silver investments can be more volatile when compared to gold. So, if you are focused on building a strong portfolio and hedging risks, gold may be a natural choice. However, if long-term profits attract you, silver investments may fulfil this objective. Gold offers better returns in the short-term and silver can provide you with an opportunity to capitalise over the longer term.

Historical price charts show us that silver tracks gold in terms of growth. So, many investors believe that the rise of gold will be followed by silver and the gap in their ratio will eventually close to around 25:1. Also, the production prices of silver are higher when compared to gold. This is simply due to the price difference. Production price margins are calculated in percentage terms and due to the low price of silver, this can be a lot higher. When it comes to gold, due to its much higher prices, the production costs become negligible.

Call our investment team for advice on all your precious metal investments

Physical Gold is one of the largest gold dealers in the UK, with an impeccable reputation for providing great value and services to investors. If you are thinking of investing your money in precious metals, please call us on (020) 7060 9992 or drop us an email via our website.

 

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How Much Gold is There in a Gold Sovereign vs a Half Sovereign?

The gold Sovereign is the pride and joy of British coinage and has been around for a very long time. The modern gold Sovereign was launched in 1817, however, the Sovereign has a history that dates back even longer. The 1817 coin was part of the great British Re-coinage of 1816. The original 1817 gold Sovereign was designed by the Italian designer, Benedetto Pistrucci, who created the classic image of St George slaying the dragon. This is the image that appears on the gold Sovereign. At the time, the brother of the Duke of Wellington, William Wesley Pole commissioned the Italian designer to create the new coin for the re-coinage. Thereafter, the Sovereign was created to replace an older British coin called Guinea.

How Much Gold is There in a Gold Sovereign vs a Half Sovereign?
A fine example of an 1838 Gold Sovereign

The early history of the Gold Sovereign

The gold Sovereign is based on an even older British coin called the English Sovereign. This was issued in 1489 by King Henry VII. The English Sovereign weighed of 15.55 g in gold. It was the first coin with a value of 1 pound, and its size and fineness of gold changed over the years. In 1603, when King James I acceded to the throne of England, a Sovereign was released to commemorate the occasion. After that, the Sovereign was withdrawn from circulation and did not resurface until 1817.

Insider's Guide to gold and silver

How much gold did the 1817 Sovereign contain?

Under the proclamation of King George IV in 1817, the weight of the gold Sovereign was set at 5 pennyweights, three grains, Troy weight of standard gold. When we calculate this amount in grams, it becomes clear that the 1817 gold Sovereign contained approximately 7.942 g of gold. According to the proclamation, the 1817 gold Sovereign would also be known as the 20 shilling coin. It was this occasion that heralded the birth of the modern Sovereign, as we know it.

The changing Sovereign

Over the years, the design of the Sovereign was modified with the reign of each British monarch. For example, the Sovereign of King George IV features a laureate head of the King. Once again, when King William IV took over the throne in 1830, a new makeover of the sovereign was created.

By the reign of Queen Victoria, the full Sovereign contained 7.98 g of gold, with a purity of 91.7%. The coin, popularly known as the Young Head, had a diameter of 22.05 mm and a thickness of 1.56 mm.  However, the gold content of the Sovereign was eventually brought down to 7.32 grams of gold. This weight continued through the reigns of King Edward VII, George V, right up to the 2021 gold Sovereign of Queen Elizabeth II. Currently, the half Sovereign of Queen Elizabeth II (2021) contains 3.66 g of gold.

How Much Gold is There in a Gold Sovereign vs a Half Sovereign?
The obverse of the Sovereign of King George IV with a laureate head

Both coins are tax-free when bought and sold in the UK. A full Sovereign contains 7.32g of gold, with the smaller coin containing exactly half that amount. Half Sovereigns tend to cost more per gram to buy but provide more divisibility to a coin portfolio. A mix of both types of Sovereign is preferable for a balanced collection.

A bullion coin

Both the full Sovereign and the half Sovereign are now released by the Royal Mint as a bullion coin. Since 1932, the Sovereign has been withdrawn from circulation. However, it continues to enjoy its status as a legal tender coin. In the UK. However, its gold value makes it unfit for use in the economy as a payment method.

Talk to the gold experts to know more about the British Sovereign

Physical Gold is proud to be one of the largest and most reputed gold dealers in the UK. If you wish to invest in gold Sovereigns, please speak to our investment team, who can guide you on getting the best deals for this coin. Call us on (020) 7060 9992 or drop us an email via our website.

 

Image credits: Public.Resource.Org and Wikimedia Commons

 

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Gold Sovereigns or Krugerrands – Which are the Best to Buy?

When making a decision regarding gold coins for our investment portfolio, we have to probe into the history of the coins, find out more about their investment potential and assess their availability. We can make an educated decision based on certain factors that most investors would consider when choosing a gold coin for their portfolio. In this article, the two coins that we shall discuss are the famous British Gold Sovereign and the South African Gold Krugerrand.

History of the coins

The Gold Sovereign

The iconic gold Sovereign has been an integral part of British coinage for more than a couple of centuries. Modern gold Sovereigns have been issued since 1817. However, it ceased to be in circulation since 1932. Gold sovereigns are now minted by the Royal Mint as a bullion coin. This amazing British coin has been minted throughout the reigns of several British monarchs. During the reign of Queen Victoria, the Sovereign witnessed three different issues, better known as the Young Head, the Jubilee Head and the Old Head. The coin is instantly recognisable due to the famous design of St George and the Dragon, which was initially created by the Italian designer, Benedetto Pistrucci. It is a coin that is loved by many investors and numismatists and worth including in your investment portfolio.

Gold Sovereigns or Krugerrands
The Gold Krugerrand features the portrait of President Paul Kruger

The Gold Krugerrand

The gold Krugerrand is a more recent coin. It was first issued by the South African Mint in 1967 and produced with gold provided by the Rand Refinery. The Krugerrand gets its name from the former president of South Africa, Paul Kruger. Of course, the country’s currency is called the Rand. Hence, the coin is named Krugerrand. The obverse of the coin has an image of President Paul Kruger, while the reverse features a Springbok, which is the country’s national animal. By 1980, the Krugerrand was the leading choice for investors, who wanted to buy gold coins. Due to its popularity, the coin prospered and represented 90% of the international gold coin market at one time.

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Comparing the two coins

Gold Sovereigns can be a better purchase for UK investors than a Krugerrand as any profits are tax-free. While a Krugerrand can provide a cheaper overall purchase cost per gram due to its larger size, dealers may pay less for them and any profits are taxable. Sovereigns have been around for far longer so provide the possibility of owning more historical coins.

Gold Sovereigns or Krugerrands
A beautiful Young Head Sovereign from the reign of Queen Victoria

Liquidity and value

In terms of liquidity, both coins are well-placed. Both the Sovereign and the Krugerrand are globally renowned coins and sell quickly. Both coins feature 22-carat gold, which is a fineness of 91.7%. However, it must be noted that the older Sovereigns can fetch better value due to their age. The Krugerrand is a more recent coin and does not command premiums based on rarity and age.

Diversity

If we were to consider diversity, the gold Sovereign is a better choice. Having been around for centuries, the coin is available in a variety of issues and sizes. The gold Sovereign has many different sizes. Like the quarter Sovereign, the half Sovereign and even a double Sovereign. Investing in these coins can create flexibility for your portfolio, allowing you to sell different amounts of gold at different price points in the market.

Call Physical Gold to get the best advice on buying gold coins

Physical Gold is one of the most reputed gold dealers in the country and our investment team can advise you on making the best purchases in gold coins. Call us on (020) 7060 9992 or reach out to us via our website and a member of our team will contact you right away.

Image credits: Wikimedia Commons and Public.Resource.Org