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Buy Gold as an Easter Gift – 2nd – 5th April 2021

Are you looking for a unique and special gift to give a loved one this Easter? Easter is now the second biggest holiday of the year for gifting presents, after Christmas. It is no longer enough to simply buy someone chocolate. Gift giving at Easter is becoming increasingly popular. Here at Physical Gold, we specialise in a wide range of one-off gold investments including bullion coins and gold bars, the perfect gifts this Easter.

Easter 2021 Dates

The dates for Easter 2021 are:

  • Good Friday – April 2nd, 2021
  • Easter Sunday – April 4th, 2021
  • Easter Bank Holiday Monday – April 5th, 2021

Gold’s association with Easter

There are many traditions that are typically associated with the Easter holidays. Bunny’s, cards, chocolate eggs, and hot cross buns to name but a few. Gold’s association with Easter, however, goes a long way back and it has often been a common practice to paint an egg gold or decorate it in gold leaf at Easter.

This practice was partly influenced by King Edward 1 who once ordered 450 eggs to be gold leaved and coloured to give as gifts to the royal household. Gold is widely recognised as one of the official colours of Easter, along with purple (colour of lent), white (colour of Easter Sunday) and red (the blood of Jesus).

Before this though, graves in Egypt have found ostrich eggs decorated in gold and silver which were dated to five thousand years ago, so the link between gold and eggs actually far pre-dates Easter.


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Buy Gold as an Easter Gift
Golden Easter Eggs

 

In 2009 Selfridges made headlines when they advertised a gold themed Easter egg for the incredible sum of £1000. The Easter egg contained a particularly rare one-ounce gold Britannia coin no longer produced by the Royal Mint and was advertised as the ultimate luxury gift.

Why gold coins are the perfect gift this Easter

During the 13th century, the British royal family gave gifts of food, clothes and coins to the poor on the Thursday before Easter. By the time Charles II came to the throne in 1630, special coins known as Maundy money were produced specifically for the occasion. In the US, one of their long-standing Easter traditions is to fill Easter eggs with chocolate coins or sometimes even real coins can be used.

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Gold coins such as Sovereigns and Britannias make very special and unique Easter gifts. Gold is seen as an excellent store of wealth and has continually held its value over long periods. The gift of gold is one that will last a lifetime as opposed to just the 15 minutes it takes to eat an Easter egg. Gold coins that are classed as British legal tender also benefit from being Vat and Capital gains tax-free in the UK providing, they are over 22 karats.

Here are three specific gold investments you may want to make this Easter, which suit a variety of budgets:

Gift the gift of gold this Easter

Gold represents the perfect gift for either a loved one or special family member this Easter. Not only is it something they can cherish and look after, with a view to possibly handing it down to future generations, it also introduces them to the world of investing.

Physical Gold has one of the largest selections of gold available in the UK. Whether you’re looking to purchase gold sovereigns or gold bars, we have the ideal gift for you this Easter. For more information on any of our product or services, please give us a call on 020 7060 9992.

Image Sources: Postapo

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Blog

St Georges Day, April 23rd, 2021 – Give Patriotic English Gold

If you’re going to give a gift to a loved one this St George’s Day, then patriotic English gold coins are an excellent choice. Like St George himself, gold represents all of our traditional English values such as strength, 23rd passion and courage making it the perfect gift idea this 23rd April.

The legend of St George

Although St George isn’t English, (he was originally of Greek decent and believed to have been born in the region of Cappadocia, now part of Turkey) he is a Christian martyr who sacrificed his life for his faith and is the patron saint of many Christian countries.

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After joining the Roman army at 17 years old, St George quickly rose in the ranks of Emperor Diocletian’s legion. In 303 A.D. however, there was a crackdown on the growing number of Christians in the Roman army and many of them faced expulsion. Saint George refused to give up his faith, despite Diocletian attempting to convert him with promises of wealth. He was executed on the 23rd April 303 A.D., which is why we now celebrate St George’s Day on the day of his passing. (23rd April – Julian Calendar or 6th May Gregorian Calendar). King Edward III made him Patron Saint of England in 1350 as he felt he reflected the country’s ideals of courage and passion.

St George’s Day was also known historically as Feast of Saint George (as the day was associated with a feast!)

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St George’s Day Flags

St George and the dragon

According to popular legend, St George slew a dragon that was terrorizing a small town in what George called “Silene” in Libya. The town’s people were sacrificing their own children to appease the dragon until St George offered to kill it on the condition the whole town converted to Christianity which they later did.

The link between William Shakespeare and St George

William Shakespeare did all he could to keep the legend of St George alive. In Shakespeare’s play “Henry V” written in 1599, King Henry famously says in his pre-battle speech: “Cry God for Harry, England and St. George!”

Shakespeare also paid homage to St George by being born and dying on St Georges Day. William Shakespeare was born on 23rd April 1564 and died on 23rd April 1616.

Gold Sovereigns; the perfect St George’s Day gift

Gold sovereigns are often given as special gifts.

Due to the new sovereign’s design which was updated in 1817 and depicts St George himself slaying the famous dragon, a gold sovereign represents a particularly poignant gift this St George’s Day.PHYS01_Animated_Gif_2_MPUhttps://www.physicalgold.com/7-crucial-considerations-guide/

2018 Gold Sovereign
A 2018 gold half sovereign showing the George and Dragon symbol on the coin reverse

Over the years, the sovereign’s design has become a classic. Designed by the Italian gem engraver Benedetto Pistrucci, the coin is particularly favoured among gold coin collectors who appreciate the coins heraldry. The sovereign is also the perfect reflection of English strength and unity. It was once the largest gold coin ever minted in Britain and throughout history, the coin has become synonymous with the might of the English empire.

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An 1886 Victorian Sovereign Young head coin reverse showing the George and Dragon symbol

Gold Britannia’s

Although they have only been minted since 1987, there are few coins that reflect English patriotism better than the Gold Britannia. If you’re looking for the perfect example of an English gold coin at its finest, then you might be interested in Britannia gold coins.  These incredible coins are the largest denomination of all British gold coins and are VAT free if you purchase them through Physical Gold.

Give the gift of patriotic gold this St George’s Day

Here at Physical Gold, we stock a huge range of tax free gold coins as well as the latest issue Gold Britannia coins. For more information, please get in touch on 020 7060 9992.

 

Image Sources: Wikipedia

 

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Guides

Collectors And Numismatic Coins

When it comes to coin collecting, every investor will have their own personal set of motivations and reasons for investing. Not every coin collector is a numismatic, (someone who studies coins from a historical, social, or artistic point of view) but they will all have their own set of criteria that determine which coins they wish to invest in.

The motives of a coin collector can vary from being a hobby, for sentimental value or as an investment. The type of coins purchased will differ for each of these types of collectors.

Collector to numismatist

Many numismatists don’t necessarily understand the philosophy of numismatics when they start out. They simply start out by default as a collector. During this period, which often starts at school for many, they come into contact with other collectors and compatriots who are at best interested in the field as a hobby. At this stage, they start trading coins, giving away their duplicate coins in exchange for other coins which they perceive as adding value to their collection. Many understand that their coins may have a certain value at this point in time, as they start to sell off their duplicates and manage to get a fair price for it. Enthused by a monetary angle, in addition to their passion for coins, they start to take numismatics more seriously. For many such numismatists, they start to attend major numismatic events across the country from their late teens to their twenties, gathering knowledge and expertise on the subject of coins.

For those who manage to keep their passion alive through their work lives, they will start formulating their own investment strategies. Through their vast network of contacts, they are able to now source coins of value, as well as identify these gems with a seasoned eye. These numismatists soon start to view precious metal coins as a preferred class of gold investment. Numismatists appear to prefer bullion coins instead of bullion bars, simply due to their passion for coins and banknotes. For some, their passion, in fact, becomes their work, and they align themselves with big-ticket coin dealers and play the dual role of buyer for some and supplier to others.

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Evolving your own specialism

Many numismatists start to focus on certain areas of collecting, specialise in these areas and are soon well known for their expertise. For example, many specialise in old coins prior to 1838, often known in numismatic circles as ‘Early Date Gold’. These are typically British and American gold coins which are full of history and are highly sought after by investors and collectors alike. The pre-1838 ones and the pre-1800 ones are difficult to come by and command great value. Of course, apart from the monetary value, there is great joy and satisfaction to be had in the heart of a numismatist when he/she can make a rare ‘find’.

Then there are ‘key date’ coins, based on mintages around certain key historical dates, like the fall of the Berlin Wall, Man on the moon, etc. The key date is represented in the mintmark on the coin. Numismatists often collect key date coins years in advance as part of a set building strategy. Then they play a waiting game for the specific event to gain historic importance. They also capitalise on the scarcity of the coins from these dates as it slowly builds up. A simple example could be the 50p coins that were circulated in the UK to commemorate the London Olympics. At the time, everyone had them, but as the years went by, they have now grown scarcer and are worth a fair bit of money today.

Commemorative coins

Coins that are issued to celebrate a special key date are often known as commemorative coins. A good example from recent times would be the Brexit coin. This commemorative coin is minted in silver as a proof coin by the Royal Mint and marks the date of Britain’s withdrawal from the European Union in 2020. The coin was struck using silver with a purity of 92.5% and had a limited mintage of only 47,000. Since the coin has already been sold out, its value is likely to escalate in the future, as demand for the commemorative coin rises.

Commemorative coins of even greater value can be found within British coinage of the 18th and 19th centuries. For example, the Queen Victoria Jubilee head is a commemorative coin issued in 1887 to celebrate the Queens. Golden Jubilee. Its mintage lasted for only six years, and the coin was last struck in 1893. Similarly, the 1871 Queen Victoria young head Sovereign is also a commemorative coin that celebrates the inauguration of the Royal Albert Hall by the Queen in 1871. These older commemorative coins are now becoming scarce and collectors willing to pay hefty premiums for these commemorative coins in an unscathed, mint condition.

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Other thematic specialisms developed by numismatists include collecting proof coinage of the American Civil War. These are hard to come by today and is a coveted area of coin study. Many numismatists who are good at sourcing and have great contacts collect ‘pedigree coins’, i.e. coins owned by someone famous, like a Hollywood film star, royalty, business tycoons, etc. The American gold rush is another historic area of interest for many collectors, as these coins are rare to come by. The San Francisco mint opened in 1854, during this period and many of the gold rush era coinage was struck at this mint.

Coins are bought by certain collectors because the commemorative event or the specific year they were produced may bare a nostalgic value to them. It may represent the year of marriage or birth or signify a specific event such as the Olympics or a sovereign’s anniversary. Most of the World’s commemorative coins were produced from the 1960s onward and have a distinct design with reference to the occasion on which they were issued. Collectors are often not concerned with the resale value it is just a coin that may mean something to them and that they just want to own. They tend to be expensive as they require a high cost of production and usually include a presentation box.

Hobby collectors may be interested in specific dates or releases, where a substantial premium will be added for their uniqueness or appeal. They may be purchasing to complete a set or just because they appreciate the coin for its beauty. Often hobby collectors buy proofs or sets of proofs that may come in a display pack of limited issue, these often have an additional premium which they will find difficult to recoup when they come to sell.

For other collectors, coins are very much an investment. These types of collectors look at coins primarily as a way of making money and hope to profit from particularly rare or hard-to-source coins. Often these investors will methodically research particular dates or mintmarks of rare coins in order to find some defining characteristic that makes them of value. Perhaps there weren’t many coins minted one year? Or there may be a coin has a slight defect leftover from the minting process that makes it unique or of higher value.

Some investors also like to focus on a particular sub-category of coins such as Lincoln cents or Victorian sovereigns. This is partly because investors like to collect complete sets of coins and also because by narrowing their focus to concentrate on a particular area of coins, they can research them in far greater depth.

That’s not all

Some investors look at ancient or very rare coins that bare much larger premiums, up to 200% higher than its intrinsic gold value. The term ‘numismatic coin’ is given to those worth a substantial premium over their simple gold value due to rarity and history. These coins can be bought at auction or from specialist numismatic coin dealers.

Investing in rare and ancient coins is a much riskier investment as the coins are less liquid and their perceived value may be very different from their market value. We do not recommend investing in ancient or numismatic coins unless the purchaser has experience of this market and can afford to potentially wait some time for the right buyer. Gold coins minted pre-1800 and those sold at premiums that exceed 180% of the intrinsic gold value may also be subject to VAT, whereas newer coins (which meet certain criteria) are exempt. In the USA pre-1933 gold is extremely popular as it is non-reportable and non-confiscatable.

Talk to the numismatic experts at Physical Gold

At Physical Gold, our team consists of highly experienced and capable numismatic experts who have great knowledge and experience in the field. Whether you are an amateur hobbyist or an intermediate level numismatist, you would surely gain by having a discussion with our team about your goals as an investor and a collector. Call us on 020 7060 9992 or drop us a line through our website. A member of our team will be in touch with you to have a friendly chat.

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Buying Gold Tips for Diwali 2020

Now the nights are drawing in and the chill of autumn is in the air, thoughts turn to this year’s Diwali celebrations, which this year falls on Saturday 14th November. With the promise of plenty of delicious food, family time and fun, the buying of gold will as always be a prominent theme in the festivities.

buying gold for Diwali
Gold rings and jewellery

The importance of gold at Diwali

Diwali is known as the Festival of Light. It came about over the centuries thanks to the legend in Hindu culture that the son of King Hima was supposed to be killed by a bite from a venomous snake on the 4th day of his marriage. Legend has it that the only way he survived a slow and painful death was because his wife heaped up all the family gold she could find outside the door. According to the story, the snake became so dazzled by the gold that he couldn’t get to the prince to administer the bite and therefore slithered away.

This is why gold holds such importance at Diwali, symbolising wealth, hope and luck. Golden jewellery and other gifts of gold are exchanged between loved ones in remembrance of the son of King Hima and the gold barrier his wife made to save his life.


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The five days of Diwali

The Diwali festival is over five days, with Diwali itself being on day 3. So, the days and dates in 2020 are:

  • Day One (Thursday, November 12th) – Dhanteras (Day of fortune)
  • Day Two (Friday, November 13th) – Naraka Chaturdasi (Day of knowledge)
  • Day Three (Saturday, November 14th) – Diwali (Day of light)
  • Day Four (Sunday, November 15th) – Annakut (New Year)
  • Day Five (Monday, November 16th) – Bhai Duj (Day of love between siblings)

Investing in gold at Diwali

During recent years, gold has been the investment of choice for many families all year round, not just at Diwali time. High-value investment items such as gold coins and bullion have increased in popularity and it’s not hard to see why. Although there is a massive cultural attachment to gold within the Hindu religion, there are shrewd financial gains too.

This is undoubtedly because gold retains its value very well in an ever-changing national currency market. By default, gold is seen as less of a wealthy luxury for the https://www.cialispascherfr24.com/prix-de-cialis-en-pharmacie/ elite but instead as an essential financial security for everyone.

Investment and protection…

When global economies and currencies are more and more unpredictable in a world that seems to lurch from one financial crash to the next, the international price of gold has steadily increased. As the value of Indian currency has reduced in recent years, along with a massive rise in inflation, the purchase of gold bars and coins has increasingly become the prudent and financially reliable way to save for the future. Diwali celebrations offer the ideal time to research the options out there for gold investment and to put some well thought through plans in place.
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Buying gold at the best time

Around the time of Diwali, world gold demand rises and therefore its value reaches a peak. This is a very typical trend which happens year after year – infact in 2016, the price jumped massively by 3.9 percent.

With this in mind, if you’ve decided to purchase gold for Diwali this year, either as a present for a loved one or as a sound financial investment, it’s highly worth keeping an eye on the market and not leaving it too late to make your move – i.e get in there early before the prices go up.

Invest with Physical Gold today

If you’re interested in buying gold coins or bullion the good news is you’ve come to the right place. Please feel free to browse our commemorative gold coins selection, in particular, these would make ideal gifts for loved ones at Diwali.

At Physical Gold we are experts in all there is to know about gold and silver and can help with any aspects of your investment. Speak to us on 020 7060 9992 or drop us an email so we can help.

Image Credits: Pixabay

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Financial Markets in Turmoil – Why the Gold Price has Dramatically Risen

Having stood the test of time over the years, the yellow metal has turned into an asset class that investors frequently depend on during times of economic turmoil. Gold has historically been seen as a safe haven and an investment vehicle that generates steady returns.

While the appetite for gold has risen and fallen over the years, it is obvious that gold demand skyrockets during times of crisis. The world has seen much of this in the last couple of decades. The demand for gold feeds on the fear of investors and looking back to 2011, we can see that the spot price of gold reached its highest point in August of that year. The all-time high, which crossed $1900, was at the height of the global economic crisis at the time.

Physical gold investments have gone through the roof during COVID-19
Physical gold investments have gone through the roof during COVID-19

Economic fears and social collapse

Most researchers study the anatomy of an economic crisis by measuring the financial impact, supply and demand issues and political ramifications. However, one of the largest problems that follow a global crisis is social impact. Epidemic diseases create the fear of death, which in turn breaks down society. Standard economic measures taken by governments can only soften the blow to an extent. In reality, there would still be people who cannot pay their bills, housing foreclosures and a growing banking crisis.

Currently, we are in the middle of what could be the largest global pandemic the world has ever seen. At the time of writing this article, the US has approximately 6.1 million confirmed cases of COVID-19, with 186,000 deaths. Likewise, the UK has over 335,000 cases and more than 41,000 deaths. The numbers are staggering and continue to grow every day. Unemployment in the United States reached an all-time high of 14.70% in April 2020. Needless to say, these economic pressures have penetrated deep into the heart of American society, destroying any semblance of economic stability that was previously there.


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The multiple impacts of COVID-19

Impact on the economy and other asset classes

One of the key barometers of Britain’s economy is its housing market. These figures show a drop in demand of around 40% at the end of March 2020, according to Zoopla, a well-known property-related website. The drop in demand isn’t linked to the availability of housing. Importantly, it is the outcome of a shrinking economy, where the lack of job security has resulted in an exodus of buyers. Many businesses have become bankrupt during the lockdown and this has also had a huge impact on commercial properties. Moreover, the post-pandemic era is likely to see a greater number of people moving to homeworking. Prime commercial property, for example in Central London, will lose its lustre due to reduced demand.

Prime real estate in London currently has few takers
Prime real estate in London currently has few takers

Other areas of the economy have also taken a significant hit. A report by the Financial Times indicated that automobile sales were down by 97% in May 2020 – the biggest drop in three decades. The United Nations has published a report that estimates the damage to the global economy to be US$1 trillion. In fact, the UN has requested countries all over the world to spend now, in order to avoid a long period of economic uncertainty. The economic think tank of the UN has advised that a lot more needs to be done, rather than reducing interest rates and cutting taxes. In March 2020, the US government released a stimulus package designed to help businesses across the country. The package included payroll tax cuts and certain emergency measures to reduce job losses across businesses.

The UK government was pro-active in the creation of an employee welfare scheme called the ‘furlough scheme’. This scheme was designed to help UK employers retain employees during crisis periods when employees could lose their jobs, the company ‘furloughs’ the worker, i.e. puts them on the scheme. The government pays 80% of the wages, up to £2,500 a month, while he/she is laid off. Two out of three British employers have used the scheme in the past. However, this scheme is likely to be pulled to reduce government spending. Many UK workers are likely to face tough times once the scheme is shut down.

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Impact on the European economy

Closer to home, the German economy entered into a recessionary phase due to the impact of COVID-19. Germany had gone into recession in 2009, during the last global financial crisis. This time around, the country’s economy shrank by 2.2%, pushing the nation into recession.

Along with Germany, the Eurozone has also been plagued with problems of its own. Countries like Italy are reeling with high debt and zero or negative growth. During the previous financial crisis, nations like Italy, Greece and Portugal were bailed out by countries like Germany and the UK. This time around, things are looking grim. Brexit has already brought the continent under pressure throughout 2019. Now, the future of the Eurozone lies in the balance and radical economic action and fiscal measures are required by Brussels to ensure the inclusion of countries like Italy.

The demand for investment silver has risen since COVID-19
The demand for investment silver has risen since COVID-19

Impact on other asset classes

Other assets have also been impacted. De Beers, one of the world’s largest manufacturers of diamonds reported a 28% decline in sales. Leading companies have also been forced to close down their sales channels, including exhibitions. Some companies have begun exploring the option of selling online however sales volumes are yet to rise.

The price of silver had fallen to a low of $12.01 on 19th March 2020, but as the COVID-19 crisis hit the price has surged to a current $27.53. This represents a stunning 129% price rise in just five months. This topic is discussed in detail later but is largely due to silver similarly to gold being classified as a safe haven investment.

Panic and uncertainty

There is an intangible impact of the pandemic, which many people don’t realise. Yet, this impact is disastrous for financial markets. It is often said that the money runs away from where it is scared. Fuelled by speculations on social media and the media, the virus of fear has spread throughout the global economy. In countries where a strict lockdown was designed to stop the virus from spreading, an economic disaster ensued, killing off businesses and depleting jobs. On the other hand, the countries that followed a lighter approach ended up having unbridled transmission of the virus, resulting in the loss of human lives. This is the paradox that the world is dealing with. It is an unprecedented situation, to which there appears to be no immediate solution.

The global stock markets have responded similarly, with the FTSE downward slide started from March 2020. Similar crashes were recorded in the S&P index and the Dow Jones. As the markets turned bearish, investors pulled out their investments. The domino effect of the coronavirus is likely to beleaguer the economy long after the threat of the virus has passed. This is a crisis with a magnitude of epic proportions that no one could predict.

Panic buying resulted in depletion of supplies from supermarket shelves
Panic buying resulted in depletion of supplies from supermarket shelves

Panic buying of commodities

Another significant impact of COVID-19 has been the turmoil witnessed in consumer markets across the world. As the crisis unfolded, people rushed out to stock food, toiletries, essential items, sanitizers and other disposables. Nielsen, the market research company reported that sales of pasta increased by 168% during the pandemic, while canned pasta and canned meat were up by 148% and 147%, respectively. This kind of consumer behaviour creates a void in the economy, creating supply and demand issues.

When there is an unprecedented spike in the demand for food and other commodities, systems often struggle to respond, and shortages are created. In many developing countries, the COVID-19 crisis has resulted in speculative prices of commodities being charged by unscrupulous traders. In a situation where unemployment is on the rise and families are cash-strapped, this creates a vicious cycle that can severely impact underprivileged members of society.

2019 was the year of Brexit
2019 was the year of Brexit

2019 was Brexit, 2020 is COVID-19

At the same time last year, no one had anticipated that the pandemic would be upon us soon. 2019 was the year of Brexit. Post the general election in the UK during the previous year, Prime Minister Boris Johnson moved forward to sign the Brexit deal with the European Union. As the threat of a no-deal Brexit loomed over the country for a long time, the price of Sterling had weakened. Naturally, the gold prices went up, as investors lost confidence in the British pound. The uncertainty that the UK might leave the EU without a deal in hand, further impacted the value of the Sterling. The price of gold had shot up shortly after the Brexit vote in June 2016.


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The former Governor of the Bank of England, Mervyn King said,

“The world economy is sleepwalking into a new financial crisis”.

Lord King was in charge of the Bank of England in Threadneedle Street during the 2008 financial crisis. He warned that a stagnating world economy was poised at the brink of yet another major financial crisis. A low growth trap, compounded by the uncertainty around Brexit, the US-China trade wars, political tensions within Europe regarding the direction of the Euro and socio-political issues in the emerging economies were all key factors for pushing the world towards another debacle.

Ironically, in hindsight, we realise that the world economy was already fraught with numerous problems. No one knew that COVID-19 would soon arrive. By August 7, 2019, the price of gold breached the $1,500 mark. It hovered at these levels through the next few months, reaching a price of $1,527 on 2nd January 2020. It reached a new high of $2,067 on 6th August 2020.

The Great Depression of the 1920s – Australian schoolchildren queue up for free soup
The Great Depression of the 1920s – Australian schoolchildren queue up for free soup

Financial markets in turmoil

Businesses in the UK were already struggling, amidst plummeting sales driven by a drop in consumer demand. For example, high-street retailer Laura Ashley was struggling by February 2020, to save the business. The company reported an 11% drop in sales through the latter half of 2019. The company’s share price went down by 38% when the media reported the news. By this time, borrowing restrictions were already in place by the major banks and struggling high-street businesses were finding it hard to stay above water.

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The 2020 oil crisis

A well-known parameter used to check the health of the world economy is the oil price. During the 2008 recession, global oil prices had dropped to $33.87 a barrel in December 2008. The 2020 oil crisis, also known as the coronavirus oil crash, had very little to do with the virus. The breakdown of talks between Russia and Saudi Arabia triggered a price war in March 2020, when the OPEC failed to stabilise the market. Saudi Arabia went on to dump crude oil into the market at heavy discounts. As a result, WTI crude plunged by 24.59% to trade at $31.13 per barrel. This was a historic low since the Middle Eastern war in 1991. Goldman Sachs, the global investment bank cut back its 2nd and 3rd quarter Brent forecast for the year to $30 a barrel, indicating that prices could eventually fall as low as $20. Read our detailed article about the relationship between gold and oil prices.

Banking and the global stock markets

Sergio Ermotti, who heads the Union Bank of Switzerland (UBS), has been quoted as saying that he has never witnessed the magnitude of what he is seeing now. Banks have been saddled with a problem of epic proportions, which include weak profits, little or no dividends or bonuses. Sadly, this comes at a time when investors are already tight-fisted. After the sub-prime housing market crisis of 2008, most banks across the world took steps to protect themselves against another similar meltdown. However, the COVID-19 crisis has caught everyone off-guard. A combined sum of US$139 billion has been set aside for loan loss provisions. However, the financial experts at Accenture have predicted that the actual cost of bad debts could rise to US$880 billion by 2022.

Back home, things aren’t great either. In June 2020, Forbes magazine published a scathing article titled “The UK economy is broken”. In that article, the Bank of England chief is reported to have said that the current financial crisis is the worst in 300 years. That takes us back to an era that predates the industrial revolution. The implications of that statement are huge. It would imply that as the current crisis unfolds, it will reach a dimension never seen by anyone in their living memory.

Government debt level has crossed 101% and is headed upwards. On the other hand, the tax coffers are emptying, as overall tax collections have reduced by 28% or more. This includes VAT, down by 46% and income tax, down by 29%. In the scheme of things, the government would find it very hard to bail out the UK banks in the event of a collapse, like it had done in the case of Northern Rock and RBS, back in 2008.

Investors queue up to recover their savings from Northern Rock in 2008
Investors queue up to recover their savings from Northern Rock in 2008

The stock market crash 2020

The COVID-19 stock market crash started on 20th February 2020. By March, the global stock markets had fallen by approximately 25%. Of course, this was a case of investors turning bearish as the pandemic started spreading and the news hit the stands. It’s interesting to note that barely a few days before, on 12 February the global stock markets were at an all-time high. This included the S&P, NASDAQ and the Dow Jones. It goes to show how fragile and volatile equity markets can be. In reality, when the market free-falls, there is no safety net.

By May, there was a recovery rally and the US indices hit new highs on 17th August 2020. Interestingly, this bull-run on Wall Street was led by technology companies who operate in areas like cloud computing and machine learning. The lockdown had proved to everyone around the world that education, business and many other services were moving online in the post-pandemic phase.

Virtual events were being hosted all over the world, while consumers have moved to ‘no contact’ online shopping. Videoconferencing players like Zoom are suddenly seeing a huge surge in their businesses, as all business meetings and conferences are being conducted through remote facilities. Investors were, therefore, keen to invest early in these companies, along with the likes of the big players like Amazon, Microsoft and Apple.

It’s important to note that the current correction and buoyancy in the stock market is not reflective of the global economy at large. Stock markets have historically risen on investor sentiment. At the moment, it appears that investors have turned to the market in the hope of making quick gains, despite the fear of coronavirus. The nature of such volatility usually creates a bubble that the general public should be wary of.

Restaurants like Nandos have suffered huge losses during COVID-19
Restaurants like Nandos have suffered huge losses during COVID-19

The decline of other business sectors

In reality, a closer look at the high-street tells us that every sector in business is suffering. Airlines have suffered huge losses, along with the tourism and hospitality industry. The popular European airline Flybe, which had been rescued from the brink of a financial collapse last year, has gone into administration. The weakening Sterling has impacted all UK airlines, with an increase in the cost of aviation fuel and aircraft leasing. However, this added to the woes of Flybe, which had a 40% exposure to the regional UK air travel market. Once the domestic market shut down due to COVID-19, it was practically the last nail in the coffin for the airline.

In the hospitality segment, restaurants and tourism were hit hardest by reduced consumer spending and travel prohibitions. 27% of UK residents delayed their vacation plans due to the outbreak of the virus, while a further 11% were forced to cancel their existing holidays. This has had a huge impact on the entire tourism sector in the UK. The country regularly enjoys a surge of tourism during the summer months from overseas residents, which has come to a grinding halt this year.

Tourism in England alone brings £106 billion annually, supporting 2.6 million jobs in the UK. Market pundits now predict that the tourism sector in the UK is likely to shrink by 59%, leading up to 2021. It’s important to bear in mind that these figures merely represent the leisure segment. Commercial and business travel, which is a huge contributor to the UK economy has vanished completely.

Likewise, the sports and sports event sectors have also taken a hit. The revenue in these sectors come from multiple streams. Firstly, fans and audiences contribute to revenues by attending events. Then, there are revenues associated with travel and tourism-related to sports. The collection of viewership revenues from television channels is yet another big contributor. Lastly, the sector generates employment for individuals tasked with security, maintenance, ticket collection, and several other services. Sports education is also a major contributor.

In an unprecedented turn of events, the Olympics and Paralympics scheduled to be held in Tokyo, Japan were postponed till 2021. The world had geared up for this great sports extravaganza, but now all the revenues and jobs surrounding the events have been shelved temporarily. While the games are scheduled to be held in 2021, it remains to be seen how the coronavirus battle will be played out. If the pandemic is still around in 2021, the games may be further rescheduled or cancelled altogether.

The Tokyo Olympics has been postponed to 2021
The Tokyo Olympics has been postponed to 2021

Business dependencies on China

The coronavirus could not have picked a worse time to enter the world. The US-China trade war had just started easing out when the coronavirus pandemic took hold. Possibly one of the biggest fallouts has been the exposure of dependencies on China that global businesses have today. The US, Japan and France have started advising their companies to limit their reliance on Chinese manufacturing within their supply chains. In fact, when the pandemic started in China, the first thing that happened was a breakdown of the international supply chains linked to Chinese manufacture. In a globalised economy, the effects of the coronavirus disruption were felt instantly as the supply of goods simply vanished.

The pharmaceutical industry is trying to limit their reliance on Chinese drug manufacturers by initiating efforts to build a raw material supply chain within the United States and Europe. Sanofi SA, a leading French pharmaceutical company is putting an API supplier in place to reduce its dependency on China. The company management says that this development will be an important one for the pharmaceutical giant, as it will become the second-largest global producer, notching up annual sales figures of €1 billion by 2022.

In 2019, Chinese manufacturing companies had secured US$223.7 billion worth of business. Automobile parts, computer peripherals, and even plastic goods arrive in the West from China. Apart from being a base for low-cost manufacturing, China is also a lucrative market. The country has more than 1.3 billion consumers, many of whom are upwardly mobile and display healthy spending patterns. This provides much-needed relief for international companies, whose markets in the West have significantly declined due to lack of consumer liquidity.

The US Dollar is emerging as a strong global currency due to the pandemic
The US Dollar is emerging as a strong global currency due to the pandemic

Currency markets in turmoil

The long arm of COVID-19 has reached well beyond the global banking sector, stock markets and business sectors in countries. It’s no surprise that the global currency markets have felt a significant impact. The weakening global economy, backed by the rise of unemployment in the US and Europe has led to investors moving to the US dollar as a solid, safe currency.

Although many believe that this could be a silver lining for the US, in reality, these movements do not reflect a long-term commitment to the US economy. Government debt is at an all-time high, along with rising unemployment. The fundamentals of the US economy could be undermined by these long-term factors, and the current price of the dollar could be driven by short-term investor sentiment. A lot depends on the US elections scheduled for November 2020. Additionally, the rise of the US dollar will create inflation for other currencies around the world, impacting imports of goods and services.

The British pound, however, has declined to its lowest level in 30 years. Market experts believe that the weakness of the pound could be dependent on speculations regarding the UK government’s plans to fund emergency economic measures to weather the storm of the coronavirus pandemic in the country. The package of fiscal measures announced by the British government simply means more borrowing for the UK. Economic experts are worried that the UK may be steering headlong into a debt crisis with no immediate solution in sight.

Gold has performed extremely well during the pandemic
Gold has performed extremely well during the pandemic

Why has gold bucked the trend and remained up?

It is now abundantly clear from the points discussed above, that the COVID-19 pandemic has hit deep into the heart of the global economy. Gold, however, has beaten the pandemic blues and continues to climb to record levels. This is largely because gold is considered to be a safe haven for investors. During the height of the 2008 economic crisis, gold reached an all-time high, crossing the $1900 barrier. That record has now been broken and the spot price of gold crossed $2000 in August this year. Falling interest rates, lack of confidence in the world economy and the uncertainty in the currency markets have all contributed to the rise of gold. With the gold demand in focus, an unprecedented level of 734t of gold has flowed into gold-backed ETFs.

The journey to this unprecedented price point had already started in 2019. Although the world was unaware that the coronavirus pandemic would soon be coming, wary investors had already started moving to gold to strengthen their investment portfolios. There were talks of yet another global recession on its way. If we look at gold price charts from September 2017, we can see that the spot price of gold never crossed the $1,500 price point up to August, last year. On 7th August 2019, the price of gold reached $1,506 for the first time in three years, almost a year ago. In April, earlier this year, the gold price hit the $1,700 mark, subsequently reaching its highest point of $,2067 on 6th August 2020.

Supplies of gold remained strong and resilient throughout this period. In the first quarter of 2020, many refineries were shut, along with mining company operations. The travel restrictions also disrupted the supply chain. These disruptions caused market premiums to rise on the back of high demand.

The table below covers the percentage growth rates of gold from 2005 to 2011 during the bull-run. In the adjoining column, the Bank of England interest rates during these years are shown. In 2009, the UK embarked on its first quantitative easing programme, dropping interest rates to a historic 0.50% and releasing £75 billion into the economy through quantitative raising. There were no other quantitative easing programmes launched during 2005- 2011. The next one was during the Eurozone debt crisis, releasing £375 billion of relief into the UK economy. The Brexit QE program released £445 billion in 2016 and the 2020 coronavirus pandemic QE program released £745 billion.

Years Percentage Rise for Gold Bank of England Base Rate Quantitative Easing (QE)
2005 31.06% 4.50
2006  8.95% Aug 06 – 4.75 Nov 06 – 5.00
2007 28.88% Jan 07 – 5.25 May 07 – 5.50

Jul 07 – 5.75

Dec 07 – 5.50

 

2008 42.75% Feb 08 – 5.25

Apr 08 –  5.00

Oct 08 – 4.50

Nov 08 – 3.00 Dec 08 – 2.00

2009 14.77% Jan 09 – 1.50

Feb 09 – 1.00 Mar 09 – 0.50

UK’s first QE program reduces the base rate to 0.50 and QE of £75 billion announced to aid the economy.
2010 32.82% 0.50 throughout
2011 12.28% 0.50 throughout

Why is gold lucrative for investors?

When building a portfolio, gold is a great choice for investors since it creates insurance and balance for the portfolio. It insures against times like these when the global economy and capital markets go into a tailspin. Gold is essentially a mechanism for hedging the risks associated with other vehicles of investment. An important attribute of gold is that it is not subject to counterparty risks. These are risks that are inherent in any form of paper-based investments, such as stocks, mutual funds, bonds, etc.

Silver prices rise in 2020

Silver was at a 10-year low price of $12.01 per oz on 19th March, which was around the time that COVID-19 really started to take a grip in Europe and the US. Following this, silver prices added 25% between April to June 2020, with May alone rising from $14.94 to $18.28. The main factors causing this were:

  1. Safe haven investments – silver’s association with gold as a safe haven investment meant that silver retained and improved its value as it was seen as a cheaper alternative to gold which was rising massively.
  2. Retail bars and coins surge – there was a surge in silver bars and coins demand, with coin sales in particular 60% higher year on year. This at a time where transportation of products was challenging lead to supply problems, longer lead-times for delivery and product premiums.
  • Silver jewellery demand – the demand for jewellery has also surged, with massive demand reported in India and China, where Seeking Alpha reports a 104% increase
  1. Silver equities – similarly there were share price increases of silver ETFs and mining companies rose sharply in the period. This was due to a surge of investments in these equities, which was against the market trend (not every sector loses with COVID-19).
  2. Reduction in supply – silver mines production are expected to fall by 5% in 2020, to 797 million ounces with other inputs (e.g. recycling), there will be total supply of 978 million ounces. This is the lowest silver supply globally since 2009.

There are too many factors to list all of them, but the above will give an idea. The silver price increase was in spite of a drop in industrial demand due to COVID-19 disruptions to industrial output (e.g. photovoltaic cells in solar panels).

The gold to silver ratio currently is 71.2, which suggests that silver remains an excellent investment as for much of history this has traded at only 15 oz of silver for 1 oz of gold.

Call Physical Gold to buy gold bar bundles of 3,5 and 10
Call Physical Gold to buy gold bar bundles of 3,5 and 10

Call Daniel Fisher, CEO of Physical Gold to discuss gold investments during COVID-19

To respond to the increased demand for gold, we have added some excellent bundled deals that can protect your wealth and strengthen your portfolio. We now have a bundle of 10 bars, with each bar weighing 10g. Similarly, there are 3 bar and 5 bar bundles weighing 50g and 100g, respectively.

The gold price is clearly at an all-time high, no matter which currency you want to buy gold in. In GBP terms, the price of gold has shot up by more than 35.6% in 2020 alone. Many investors are adopting a ‘wait and watch’ policy. We often receive feedback from these investors that they feel they’ve missed the price point and now need to wait for the prices to go down, for them to invest. This couldn’t be farther from reality. Gold prices rise steadily, and a gold bull-run does not necessarily end at the end of the year.

Many people think that the COVID-19 pandemic will simply end, as suddenly as it appeared, and the economy will revert to normalcy by 2021. At Physical Gold, we believe that this is likely to be a sustained run and buying gold can protect your wealth even now if you haven’t bought already. The last gold bull-run took place from 2005 to 2011. During that time, we had countless discussions with buyers about what they should do. If you’re thinking of buying gold during the current pandemic, please speak to Daniel Fisher, by calling (020) 7060 9992 or contact us online and we’ll get back to you.

 

Image Credits: Pixabay, Wikimedia Commons, feiern1, Wikimedia Commons, Public Domain Pictures, Wikimedia Commons, Wikimedia Commons, Wikimedia Commons, Wikimedia Commons, Christoph Meinersmann/54, Jeremy Schultz and Wikimedia Commons

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How can gold protect you from Capital Gains Tax increases?

Rumours of significant Capital Gains Tax increases have spooked the investment market. But gold could be the answer to shield you from imminent tax rises.

UK’s rising debt

Getting the UK’s burgeoning debt under control has been a primary focus for recent Conservative Governments. Austerity measures have aimed to reduce UK PLC’s growing debt problem, despite its impact on large swathes of the population. UK Public sector debt (excluding public sector banks) has now exceeded £2 trillion for the first time. July’s level of £2,004 billion was a staggering £227.6 billion more than at the same point the previous year.

Furlough scheme extended to March and beyond

Chancellor Rishi Sunak has been praised for his speedy and decisive response to Covid-19’s impact on individuals and companies to work. A wide-reaching Furlough scheme has targeted those unable to work due to Covid-imposed restrictions. The scheme has evolved both in breadth, to cover more sectors like the self-employed, and in duration. Initial timeframes have been extended as we’ve entered the inevitable second wave of the virus and another national lockdown.

Need to tackle growing Government debt

But for a Government so focussed on balancing the books, this vast sum of debt has put a massive spanner in the works. Debt as a percentage of GDP has now reached parity after levelling off at around 80% from 2015 to 2019. With the virus still raging and furloughing in full swing, the chancellor has already turned his attention to ways of reducing this mind-boggling national debt from next year onwards.

How can gold protect you from Capital gains tax increases?
(Daily Mail) UK Debt now at 100% of GDP

Experts suggest Capital Gains Tax could be key to reducing debt

The Institute for Public Policy Research has recommended raiding middle-class investors and entrepreneurs to help plug the leaky public finances.

Reducing or abolishing the Capital Gains Tax (CGT) tax-free allowance would increase the number of people paying the tax by up to 300%, plus the amount paid by those already affected by CGT.

The Treasury calculates that CGT could raise a whopping extra £90 billion over 5 years if aligned with income tax brackets. The tax is levied on gains made on sale of shares, second homes and the sale of businesses. But an annual tax free threshold of £12,300 means that many people escape the tax altogether due to modest profits, while shrewd investors can split sales across tax years to minimise impact.

Part of the planned changes would see this threshold reduced or even scrapped. Estimates are that reducing the allowance to £5k would double the number of people paying the tax and reducing to £1k would triple the amount.

Owning physical gold coins can reduce your tax bill to zero

As an investor or business owner, it’s important to take pro-active action to prepare for possible tax increases next year.

Whether you’re buying as an individual or from company profits, gold’s popularity as an investment has hit new heights in 2020. Primarily enticed by healthy returns in the gold price, investors are now also recognising the tax free benefits of certain gold coins.

How can gold protect you from Capital gains tax increases?
Owning certain gold coins can keep away the tax man

Which gold coins are tax free and why?

While all investment grade gold is VAT exempt, only certain gold qualifies as CGT free.

As a UK investor, selling gold bars or non-UK gold coins at a profit, could incur CGT if you make more than your allowance. But sticking to UK legal tender gold coins will mean any profits are completely free from CGT.

That’s because HMRC cannot tax individuals for gains made from selling its own legal currency. Coins issued by Royal Mint with a face value qualify as legal tender.

The two main choices are Gold Britannias and Gold Sovereigns. But The Royal Mint also produces more limited issue legal tender series such as Lunar coins and Queens Beasts.

These are the Royal Mint’s highest face value coin and weigh 1oz in weight. Gold purity is 999.9 / 1,000 parts gold and the most popular UK tax free coin for larger investors due to their low premiums. The 2021 version features high-tech laser produced security features, making it one of the most impressive bullion coins on the market.

Pre-owned Britannias are occasionally available and offer investors the chance of reducing premiums further. Britannias are also CGT free if bought in it’s fractional versions (half, quarter and tenth), or the silver version.

2021 Gold Britannia
The Britannia is our best selling investment coin

 

One of the world’s best known gold coins, the humble Sovereign also qualifies as tax free.

At around a quarter of the size of the Britannia, the Sovereign offers a more affordable route to gold for modest investors or more divisibility for those seeking flexible portfolios. The modern Sovereign has existed for more than 200 years, so it offers huge variety for investors and collectors alike. Best value Sovereigns offer the cheapest option, while historical editions from the Victorian era are more scarce, but expensive.

Half Sovereigns are slightly more costly per gram but appeal to those after smaller coins.

 

One of the most popular limited issue Royal Mint series is the Queens Beasts range of coins.

These are primarily 1oz 24 carat coins, although quarter ounce coins are also available. Limited to a series of 10, the coins’ stunning design is a major pull, but their limited issue quantity has also led to many of them increasing in value at a far quicker pace than other UK coins.

The White Greyhound of Richmond is the most recent and final issuance in the set. It currently trades at modest premiums, so could be a good bet if its value follows earlier coins upwards.

With the same £100 face value as Britannias, these coins also provide a tax free shelter.

white greyhound of richmond queens beast
Queen’s beasts are a stunning coin collection, with enhanced upside potential

Gold likely to offer high returns as a safe haven asset

With a lethal cocktail of high Government debt, increased taxes, high unemployment, recession, falling stock and property markets, weak currency and rock bottom confidence, 2021 and beyond looks like an economic nightmare.

But gold tends to benefit in these times, attracting investment from those seeking a safe haven. Indeed, gold has risen around 25% so far in 2020 as of mid-November. The previous gold bull run saw double digit rises every year from 2005 to 2011.

So gold isn’t just a way of shielding from capital gains tax, but also growing your savings.

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What is the Correlation Between Gold and Oil Prices? Has COVID-19 Changed this Forever?

It is becoming increasingly apparent that the COVID-19 crisis has caused unprecedented disruption in the markets. Accepted constants in the market have been broken, as the price of gold has skyrocketed, while other commodities have moved in different directions. For more than 2 ½ decades, the gold oil ratio has been around 15:8. In layman’s terms, this means that 15.8 barrels of crude oil are worth the same as a troy ounce of gold.

Back in 2005, this ratio dropped to 6:2 due to massive rises in the price of oil. But, apart from these periodic aberrations, the gold-oil ratio has more or less remained constant. Oil price volatility has also driven this ratio up to 47:6 in 2016. So, what happened in 2016? The price of gold rose by 6% to jump to $ 1127 per ounce. Oil prices performed poorly in that year, along with the stock markets, but the ratio was disrupted as gold prices continue to rise.

The price of crude oil is intrinsically linked to gold prices
The price of crude oil is intrinsically linked to gold prices

Why is the oil to gold price ratio so important?

The common umbilical cord shared by both gold and oil is the US dollar. Since both gold and crude oil are priced in the market in US dollars, there is a correlation between the two commodities. Gold is considered by many to be more than a commodity – a precious metal that locks in value provides insurance against inflation and other market forces and hedges unwanted market risks. Oil, on the other hand, is representative of the energy we use in a fossil fuels based world. This simply means that all countries in the world have to acquire monetary resources to buy oil to run their economies.

Apart from being dollar-denominated assets, the price of crude oil is an important influencer in the stipulation of gold prices, gold mining company stocks and ETFs. Due to their valuation in the same global currency, a rise in the US dollar usually means the fall of other dollar-denominated assets. In this scenario, investors are wary of purchasing these assets as they become more expensive. So, ideally, when the US dollar falls, gold falls, as it becomes more affordable due to their strong linkage.

Gold has delinked itself from oil prices in 2020
Gold has delinked itself from oil prices in 2020

Inflation is also linked to the price of oil and gold

Interestingly, there is another dimension to the problem. The rise of crude oil prices usually pushes up inflation. However, as we know, gold protects investors against inflation. The demand for gold, and subsequently its value also increases whenever there is a spike in inflation. So, now we can see the direct relationship between gold and oil prices. Gold does not behave like other dollar-denominated assets. The demand for these may plummet with the rise of oil prices, but gold, due to its inflationary protection attributes continues to remain attractive to investors when inflation is pushed up, due to oil prices.

Economic slowdown due to the increase in oil prices

Since all countries have to buy oil to fuel their economic growth, a rise in the price of oil slows down the economy. The domino effect that this has on industry dampens economic growth. Consequently, there is a fall in equity markets and investors move to gold. Once again, there is a direct correlation between the price of oil and that of gold. Recessionary phases like these can be lucrative for precious metal investors as they can book profits with the price of gold moving upwards. Surging oil prices can adversely impact the share price of mining companies, as well. Since oil is widely used in mining, rising oil prices squeeze the margins of these companies, resulting in a dip in their share prices.

PHYS01_Animated_Gif_2_MPU

So, what changed through 2019 and 2020?

At the beginning of 2019, the gold price ratio was 23:1, which was already high, but it rose further. Numerous factors affected the price of gold, resulting in significant increases. The world was already poised on the brink of a financial implosion that led to an avalanche.

Investors starting to move their investments to gold. Other factors responsible for the rise of gold were:

  • the economic uncertainty in Europe due to Brexit
  • increased government debt in most countries in the developed world
  • the US-China trade wars and
  • socio-political tensions across the Middle East and other parts of the world.

All of these factors also led to the volatility of the global stock markets, resulting in more demand for gold. The COMEX gold futures price breached the $1400 per ounce mark in June 2019.

Crude Oil Tanker
Crude oil remains the lifeblood of the global economy

How did the pandemic change the game?

For all practical purposes, 2020 is not a normal year. The oil crisis started with Russia and Saudi Arabia at loggerheads with each other regarding the future of oil. Russia had refused to ramp up production to keep oil prices up. The price war was eventually triggered in March 2020, when OPEC failed to stabilise the market. Saudi Arabia started dumping crude oil into the market at heavily reduced prices.

This resulted in the WTI crude going down by 24.59% and reached a price of $31.13 per barrel. These prices have never been witnessed since the Middle Eastern war, which took place in 1991. The global investment bank, Goldman Sachs cut back on its outlook on Brent oil for the second and third quarter of the year, reducing it to $30 a barrel, with indications that eventually prices are likely to be as low as $20.

Has COVID-19 changed the gold oil ratio forever?

So, here was a new trend with oil prices falling and the price of gold reaching its highest point ever to $2067 on 6th August 2020. As we have seen above, the price of gold falls along with the price of oil. However, COVID-19 was different. While oil was dumped at cheaper rates, global economic fears prompted investors to buy gold in the hope of protecting their wealth.

The 2020 fall in oil prices was not entirely linked to coronavirus, but a reduction in industrial demand for oil due to manufacturing output reduction was. As were corresponding drops in fuel usage by the public as they travelled less and also the reduction in worldwide travel also created a reduction in demand for oil.

The rise of gold was certainly linked to the implosion of the global economy caused by COVID-19. It would be premature to say that the gold oil ratio has changed forever. 2020 has not been a normal year. It may take a couple of years during the post-pandemic era for things to stabilise, but once they do, the correlation between oil prices and gold may revert to pre-2020 levels.

For more advice on buying gold at the right time, call Physical Gold

Our gold researchers continuously study economic trends related to the international gold markets. Many people believe that the current price of gold isn’t viable for them to make a purchase. To get the right advice on buying and selling gold, call us on (020) 7060 9992 or contact us online. We would love to speak to you and impart the right advice on buying gold.

 

 

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What Types of Gold are There?

Types of gold

Gold has and will remain one of the most popular investment vehicles of all-time. It provides balance, insurance and safety for most investors. Investors have always moved their money to gold during an economic crisis. It is interesting to note that the current economic debacle that was precipitated due to the COVID 19 global pandemic has pushed up the spot price of gold to more than $1800 an ounce. The historic all-time high still stands at over $1900 per ounce in August 2011. As an investor interested in gold skyrockets, it’s time to take a look at the different types of gold investments.

Gold can come in many physical forms ranging from gold dust and nuggets in their raw state, through to coins and bars for investment, and finally jewellery and ornaments at the highly refined and designed end. The purity and colour of gold can also vary greatly depending on its alloy mix. The most common gold colour types are yellow (when gold is at its 24 carat purest), white gold, when mixed heavily with silver, nickel and zinc to toughen its resilience and red gold when a higher element of copper is present. It’s also possible to create green, black and purple gold with various alloy mixes.

What Types of Gold are There?
Gold bars are highly attractive to investors

Paper investments in gold

There are also gold ETFs and gold company shares that provides investors with access to the gold market. However, it’s important to know that these investment vehicles carry counterparty risks. Gold mining shares are subject to the inherent risks of the global capital markets. There are also gold funds which invest specifically in gold mining companies. These coins spread the risk of owning gold company shares by investing in a variety of companies in the market. But, they too are subject to capital market risks, and also charge on-going management fees

PHYS01_Animated_Gif_2_MPU

2 kinds of Investment Gold: Gold coins and bars

Perhaps the safest and most satisfactory form of investment in gold remains the purchase of gold bars and coins. There is a wide variety of gold coins and bars available in the market. These investments are free from counterparty risks and offer investors complete control over the assets, as they are physically held. Of course, the storage of gold and its safety during transport needs to be ensured. When you buy your gold assets from a reputed gold dealer, always insisted that they are delivered to your door via an insured courier. Many well-known dealers can also make arrangements to segregate and store your gold in a commercial vault.

The design and production costs of gold jewellery cannot be recovered
The design and production costs of gold jewellery cannot be recovered

Investing in gold ornaments

When you buy bars or coins, you acquire investment-grade gold, which has 99.9% purity. Since gold is a malleable metal, ornaments cannot be manufactured without reducing the purity by adding base metals. So, most gold ornaments will be made out of 18-carat gold or a lower level of purity. Also, the manufacturing and designing charges cannot be recovered when selling. So, it isn’t a great investment. While red, black, purple and green gold is aesthetically attractive, one must remember that the percentage of gold is less.

Best kinds of gold for tax efficiency

All investment-grade gold in the UK is VAT free. This is a major advantage when putting your money in gold, as it reduces the purchase price by 20%. UK gold coins offer an even better avenue for investors, as the profits collected from its sales can be enjoyed without paying Capital Gains Tax. However, it’s important to know that the CGT exemption threshold is £12,000 of profits in a single tax year.

The investment team at physical gold can offer you great advice

At Physical Gold, our team of experts can help you plan your gold investments and advise you on the right bars and coins to buy. Call us today on (020) 7060 9992 or get in touch with us online via our website. We pride ourselves on good customer service and would love to speak to you.

 

 

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Why invest in silver coins?

Investing in silver coins

Silver coins are a great investment choice if you’re seeking potential capital growth and also want a hedge against falling stock markets and banks. The value of coins tends to rise over time, especially when there’s political and economic instability. Silver coins are also exempt from Capital Gains tax. The modest price of the coins enable accessibility to the market for many, and divisibility to sell part of your holding. The silver price can also rise when demand for industrial silver rises, with its predominant use in electronics.

The industrial demand for silver is rising

The white metal is used extensively in the electronics industry, IT, solar panel manufacturing and a host of other industrial processes. On the other hand, the production of silver from mines has greatly reduced over the years. Rising demand and dwindling supplies have fuelled speculations that there may be a huge price in the spot price of silver in the years to come. Many investors have started buying up silver early with an expectation of making profits, once the prices go up.

Why invest in silver coins?

Coins like the silver Dollar do not enjoy tax free status in the UK

Silver to gold price ratio looks enticing

Today, silver is almost a hundred times cheaper than gold. Therefore, it provides investors with easy access to the precious metals market. If you are planning to invest in silver, there could be no better time than the present to take a calculated risk and purchase the white metal. Silver bars and coins can provide you with good investment options if you plan to get in early and wait for the long-term to generate good returns. While silver bars allow you to acquire more silver at a cheaper price per gram, silver coins have several distinct advantages.

Variety and purity

Firstly, they are available in a wide variety of sizes. 1-ounce coins are quite common, but now there are larger silver coins of 10 ounces and even up to 1KG. These large coins also offer you the same advantages as buying a silver bar. Secondly, purity is an important consideration. Silver coins with a purity of 95.8% are easily available. However, better options can be found like the Canadian Silver Maple Leaf, which is a coin with 99.9% purity.

Insider's Guide to gold and silver

A vibrant secondary market

Liquidity is also an important consideration when building a precious metals portfolio. Always buy silver coins that are popular and enjoy a strong secondary market. Obscure and rare coins can be difficult to sell later on. Well-known coins with a vibrant resale market include 1-ounce silver coins like the Krugerrand and the silver Britannia.

The silver Britannia is one of the finest silver coins to invest in
The silver Britannia is one of the finest silver coins to invest in

Tax efficiency

Any investment portfolio needs to be tax-friendly. While coins like the Canadian Maple Leaf are a great buy, the profits you make from their sale are taxable. UK silver coins like the silver Britannia, on the other hand, are CGT free, due to their status as legal tender in the country. The silver Britannia, in particular, is a bullion coin and is available in plenty. Therefore, premiums are low, they are CGT exempt and available with good discounts on bulk orders from reputed silver dealers.

Get in touch with Physical Gold to plan your silver portfolio

Physical Gold is one of the most reputed silver dealers in the UK. Our investment experts can help you identify the right silver coins to buy. Give us a call on (020) 7060 9992 or drop us an email and a member of our team will get in touch with you right away.

 

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Are silver coins or bars better?

Investors have found the white metal alluring for some time now. Due to the potential to make significant gains once prices rise, the popularity of silver is gaining ground. The gold-silver ratio has widened considerably and silver is now more than 100 times cheaper than gold. Investment options and silver include bars of varying sizes and a variety of choice in coins.

There are important differences in buying bars and coins. These include considerations of important investment factors like divisibility, value, variety and liquidity. In this article, we will explore these differences and understand whether it is prudent to invest in silver coins or bars.

Are silver coins or bars better?
Large silver bars carry lower production costs

Coins offer distinct advantages

Coins are usually a better bet for investment for a couple of reasons. They offer far better divisibility than owning large silver bars, providing flexibility to sell small amounts. If living in the country of issue, they can also be Capital Gains Tax-free. Bars can be slightly cheaper due to lower production cost, but quantity discounts are achievable when buying lots of coins.

It is interesting to know that silver coins are available in 10 ounces and 1 kg versions. One of the compelling reasons for the popularity of silver bars is that they carry lower production costs. This offers investors the opportunity to acquire more silver for their money. However, large coins are almost similar to investing in bars. Additionally, these coins are tax-efficient if they have a face value.

Insider's Guide to gold and silver

The importance of divisibility

Investing in a variety of smaller coins will enable the investor to spread the value of the investments. This is an important factor as it allows you to take advantage of different price points when the market is good. Investing in a large bar gives you that one opportunity to sell, while smaller coins can be sold bit by bit to maximise profits.

Silver bars can offer greater value

The experience of purchasing a large silver bar is altogether different from acquiring coins. There are large bars available that weigh 1 kg or 5 kg, and they offer an excellent opportunity to acquire more silver at a cheaper price per gram. This is simply because silver bars carry lower production costs and design costs. If the purpose of your investment is simply to acquire a larger amount of silver at cheaper prices, then bars could be the right choice for you. However, you need to bear in mind that large silver bars do not tick the boxes for divisibility, variety and tax efficiency.

Are silver coins or bars better?
Silver coins offer tax advantages

Tax-efficient investments in silver

Unlike gold, 20% VAT is payable on all silver bars and coins. Needless to say, this escalates your purchase price and eats into your profit margins.

Physical Gold, a well-known precious metals dealer in the country prior to Brexit offered VAT free silver. Sadly this is no longer possible, due to the terms of the UK’s exit from the EU. However, even with paying 20% VAT, the price differential is negligible. This is because:

a) We have reduced our product range of silver products. This means we are buying at highly competitive prices and pass this discount on to our customers!

b) We can also now provide free delivery on silver, as we ship now directly from the UK. Delivery was previously charged for

In addition, we can also supply silver and gold together in the same order now, whereas previously to attract VAT free silver we needed to accept “silver only” orders.

Silver coins that carry a face value, on the other hand, is recognised as legal tender in the country. Therefore, they can be acquired CGT free. While you will end up paying VAT when buying these coins, the profits you make when selling them are tax-free up to a level of £ 12,000 in a single tax year. It is important to be aware of these tax implications when investing in silver to make the right choices when building your portfolio.

Call our silver experts to get the right advice before buying

At Physical Gold, our precious metals experts can offer you impartial advice on making the right purchases. Call us on (020) 7060 9992 or get in touch with us online to discuss buying your silver.

 

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Is it best to buy old or new Sovereigns?

Sovereigns are one of the most popular British coins that investors opt for. When compared to other gold coins, Sovereigns tick many boxes, which make them attractive to investors. Firstly, they are available in a variety of sizes. The full, half and quarter Sovereigns are found in many investment portfolios. There are fractional ones as well – the one-tenth and the one-twentieth of an ounce. If any investor focuses on divisibility, these are great options. There is even the quintuple Sovereign or the 5-pound gold coin which presents great value for money.

Of course, the coin has been around for 200 years, and many issues are freely available. They are extremely well-known all over the world, which makes the Sovereign one of the most liquid coins in the market. In addition to all these reasons, investors love the Sovereign due to its tax friendliness. Sovereigns are VAT and CGT free for all UK residents. The question is – should one buy the older coins or the new ones? The brand-new ones are released as a bullion coin, available in an attractive blister pack. Which ones are a better buy?


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The best type of Sovereign to buy will depend on your objectives and budget. Brand new (current year) Sovereigns are actually the cheapest to buy as they do not yet hold a historical or scarcity value. Older Sovereigns cost more to buy for these reasons but are worth more and may rise in value quicker. Ideally, a mix of the two types will achieve the most balance.

Is it best to buy old or new Sovereigns
1959 Queen Elizabeth II gold Sovereign

Setting your objectives

It is probably apt to start with objectives first. There are a variety of different reasons and motivations for buying gold Sovereigns that vary from numismatists to investors. Collectors will usually search for older Sovereigns that carry a scarcity premium. George III Sovereigns are extremely rare and valuable and these coins have fetched prices well over £100,000. An investor will think differently. Collectors are always happy to pay premiums and purchase proof coins, which are more attractive and expensive. Investors, on the other hand, would always opt for bullion coins, which offer a far better potential for investment.

Buying newer bullion coins

New gold Sovereigns have certain distinct advantages. Price plays an important role in the acquisition of newer Sovereigns. Since the new coins do not attract large premiums based on scarcity, rarity and age, investors can bag a bargain and acquired these at lower price points. The demand for Sovereigns is great and the secondary market price remains buoyant on the back of healthy demand.

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Therefore, good resale prices can be expected in the future and investors can maximise their profits by investing in these coins. However, December is not a great month to buy, as premiums tend to escalate during this time, in anticipation of the next year’s issue. If you plan to buy large quantities, you can get better discounts from reputed dealers. It is also important that you evaluate the different deals offered by several dealers. You can get the best deals by simply shopping around and checking the prices offered by different dealerships.

How Much are Gold Sovereign Coins Worth
King George V Half-Sovereign

Larger Sovereigns are a better buy

There can be great advantages when you buy a larger Sovereign coin. Larger coins benefit from lower production costs. The costs incurred in designing and cutting smaller versions of the same coin add to the overall margin. By purchasing the double Sovereign or the quintuple Sovereign, you can acquire more gold content at a lower price point.

Call Physical Gold to understand the best opportunities in gold Sovereigns

As the Sovereign is one of the most popular British coins for investment, our team conducts extensive research on the availability, demand and market price of the coin. You could benefit from the impartial advice that we can offer you. Call us on (020) 7060 9992 or simply reach out to our team online via our website.

 

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How to buy gold and sell it for a profit?

Ultimately, most investors will invest in gold to make profits. Gold is a stable asset class that rises steadily and provides you with the opportunity to buy at a certain price point and wait for a few years for the price to reach the level you desire. Gold always delivers better returns over the long-term. When you decide to buy gold, you will be faced with the option of investing in bars or coins. Both of these investment avenues have different sets of dynamics. If you choose to invest in gold coins, two important factors can impact your profits. These are – increases in the spot price of gold and the percentage rise in the level of premiums that you can achieve when selling your coins.

Investing in gold coins

Buying gold in a price dip gives you a stronger chance than buying gold when it is on the rise. A profit is more attainable when holding gold over the medium to long term rather than trying to turn a quick profit. Buying UK bullion coins such as Britannias and Sovereigns will allow a lower purchase price than buying proof coins in presentation boxes, which provides more scope for profits. These coins are in high demand so obtaining a profitable sale price is more realistic.

It is usually a bad idea to invest in obscure coins that no one knows about. Even if they are rare, these investments will affect the liquidity of your portfolio, as you will not be able to sell them quickly. So, Britannias and Sovereigns are your best bet. These coins enjoy an extremely healthy secondary market and you can easily make profits on them.

How to buy gold and sell it for a profit?
Bullion bars are attractive to investors due to lower production costs

Buying gold bars

Many investors prefer gold bars due to their lower production costs. They present an opportunity to acquire a larger amount of gold at a lower price point. However, do be aware that gold bars usually do not have a face value and aren’t considered legal tender in the UK. Therefore, you may lose the tax advantages of CGT exemption that you can get with UK gold coins.

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Planning is the most important factor

Like any other business initiative, you need to plan your gold purchases and your sales. Acquiring your gold at lower price points can help you start with a distinct advantage. Maintain a close relationship with your gold dealer and be aware of market prices. Shop around and keep checking with many gold dealers until you get the best deal. Once you’ve acquired enough gold to build a strong portfolio, it’s also important to plan your time horizons. You need to determine how long you will stay invested and stick to that timeline.

How to buy gold and sell it for a profit?
Gold bullion coins are a tax friendly investment

During the selling stage, it’s important to let your dealer know about your intention to sell, ideally a month in advance. This will help your dealer look for specific buyers in the market to achieve the price that you want. You should never be in a hurry to sell. Gold prices can sometimes rise or fall by 2-3% in a single day. You have to be ready to make your sale at the right price and time.

Maintenance of your gold assets

Like all other assets, your gold needs to be maintained and kept properly for you to achieve the best price when selling. 24-carat gold can be soft and prone to damage. Therefore, it’s important to store your gold in a proper storage facility, at home or with your broker.

Call Physical Gold to understand how to make the most money when selling your gold.

At Physical Gold, we are keen to provide the right advice to investors. If you are keen on making gold investments and want to understand more about the buying and selling process, give us a call on (020) 7060 9992. You can also reach out to our investment team online by sending us an email.

 

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Where to buy gold in the UK?

In the summer of 2020 traditional avenues of investments have been depleted with the unfolding of yet another economic crisis, on the back of the COVID 19 pandemic. The demand for gold is soaring and already, the spot price of gold has touched $1800 per ounce.

In the immediate post-pandemic world, things are likely to remain the same. Time after time, investors have always turned to gold during times of global economic crisis. If we revisit the historical gold charts for 2011, we can see that the peak of the last worldwide economic crisis brought about the highest price of gold in August 2011, when the spot price went above $1900 per ounce. We are slowly getting there. Like many other investors, if you are considering gold investments, it is important to understand where to purchase your gold.


Download the Insider’s Guide to buying tax free gold here 


If you’re looking to buy gold coins and bars, the best places to buy are from specialist gold merchants. A list of approved gold dealers can be found on the British Numismatic Trade Association website. They will be trustworthy to charge fair prices and ensure all products are authentic and of high quality. If you’d prefer to buy in person, then certain area specialises in selling gold. In London, Hatton Garden features many stores in the same street, so prices can be easily compared. In the Midlands, the Jewellery Quarter also possesses several options. Just be aware that choice may be limited when compared to specialist online gold brokers.

Where to buy gold in the UK?
It is safest to buy gold bullion bars from a reputed dealer

Buying gold without counterparty risks

Physical gold investments are safer since you possess the tangible assets you purchase. There are other forms of gold investments like gold company stocks or gold ETFs. These carry counterparty risks, which implies that the non-performance or the bankruptcy of the company that issued you the paper investment certificate can result in your investments being eroded. Physical gold investments mean buying gold bars and coins.

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Buying gold from eBay

Large online retailers like eBay are great at giving you amazing deals on books, music, electronics, and many other product categories. However, buying precious metals from eBay can prove to be extremely risky. Most of the auctions on these online sites are re-sales and being able to ascertain the authenticity of the gold you’re buying can be difficult. Verification of the quality of gold requires sophisticated testing equipment. In the absence of these, you could be exposing yourself to fraud. In addition to these concerns, PayPal fees are high on sites like eBay and once these costs have been built into the buying price, it’s not a great deal any more.

Where to buy gold in the UK?
A reputed gold dealer can arrange to have your gold stored in a secure facility

The best places to buy gold in the UK

The answer is simple. To acquire high-quality gold bullion, which has been verified and comes with an authenticity certificate at the best prices, you need to find a reputed UK gold dealer. The British Numismatic Trade Association (BNTA) maintains a registered of trusted gold dealers in the UK. An additional advantage of identifying a UK dealership from this source is adherence to an industry code of conduct. If there is any dispute regarding the quality of the dealer’s goods and services, a complaint process is available to you.

How can you identify a reputed gold dealer?

Once you have collated your list of contacts from the BNTA, check the reputation of dealerships over the internet. A reputed business should have a proven track record going back some years and you can view customer ratings about their trustworthiness, quality of products and services. After you have prepared a shortlist, it’s a good idea to pick up the phone and call the dealerships. Good dealers will always be ready to answer any questions you may have and will offer certificates of authenticity and a buyback scheme for the gold they’re selling. Many of them can also arrange secure storage for your gold and offer you insured delivery for your products. Once you’ve checked out all these points, you would have if you reputed online dealers. These are the best places for you to buy your gold in the UK.

We can help you identify a reputed gold dealer

If you need to buy gold, and you’re looking for a specialist gold dealer, give us a call. The team of investment experts at Physical Gold can help you identify a reliable gold dealer. Call us on (020) 7060 9992, or contact the team online through our website.

 

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What is Gold Investment?

It is common knowledge that investors always turned to gold during times of economic turmoil. As a result, gold investments are perceived as a safety net to hedge risks. Our world has seen unprecedented economic adversity in the last two decades. The sub-prime housing market crisis that unfolded in the US during 2008 spiralled into a full-blown economic disaster for the world. At the peak of the crisis, in 2011 gold reached an all-time high crossing the $1900 barrier per ounce. This was clearly a result of scared investors moving their money to gold, spiking the demand for the yellow metal.


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Similarly, there have been several geopolitical factors that have created adversity in the world. Over the last decade, there has been Brexit, the fallout of the US-China trade war, as well as ballooning government debts across nations of the developed world. Now, we have the COVID 19 global pandemic, which is threatening to have long-term repercussions for the stability of the global economy. Indeed, gold prices have once again risen, crossing the $ 1800 mark. Since everyone seems to be moving towards gold, let’s figure out the essential factors that can affect gold investments.

What is Gold Investment?
Gold bullion bars are a great investment

Gold investment has many forms

Gold investment can take several forms. The most obvious is to purchase physical gold coins and bars. Gold investment can also be achieved through buying Gold ETFs, gold mining shares, and gold mutual funds. Generally, the aim is for capital appreciation in line with the gold price and to profit from selling the gold at a higher price than when bought. As well as outright profit, motivations for investing in gold can be to provide balance and protection to other assets, and as a store of wealth to beat inflation.

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A question of balance

Gold investments, when planned properly can provide much-needed balance to your portfolio and protect you against economic adversity. The term ‘balance’ simply refers to a diversification of your investments across asset classes, resulting in a healthy spread of risks. This means that a sudden collapse of the global stock markets may impact a part of your financial portfolio that has exposure to equities. But your entire portfolio won’t take a hit, especially since precious metals like gold, do not have the same market dynamics as global equities.

Historically, gold has also beaten other monetary factors like rising inflation, which can erode the value of your investments. Volatility in the global currency markets can also impact your portfolio. Gold investments are an excellent choice, simply because you can achieve protection against these negative outcomes.

The philosophy of gold investments

To be a successful investor, you need to select the right type of gold investments, based on your personal objectives. For example, if you are looking to make quick gains by timing the market, electronic gold investments in the form of ETFs could be the right avenue for you. If you are planning to build a strong precious https://www.cialispascherfr24.com/prix-de-cialis-en-pharmacie/ metals portfolio, then you must consider attributes like liquidity, value, divisibility and variety, which can have a significant impact on your portfolio.

Authentic gold bars always have a manufacturer stamp on the face
Authentic gold bars always have a manufacturer stamp on the face

Liquidity

This simply means being able to sell off your physical gold holdings quickly, to take advantage of market prices and bring in profits. A smart gold investor will buy popular coins and bars which are easy to sell.

Value and divisibility

These two attributes have a somewhat converse relationship. You can get better value by investing in large bars and coins, due to their lower production costs. However, when you do that you sacrifice divisibility – a term that implies dividing your physical gold holdings into smaller dimensions so that you don’t have to sell large amounts of gold at one time. Variety can play an important role when selecting gold coins, as it increases the attractiveness of your collection.

Other factors

Counterparty risk is an important consideration and you can mitigate this risk by simply investing in gold in a physical form. Tax efficiency is another important consideration when planning your portfolio. All investment-grade gold is VAT free in the UK, but you can become liable for capital gains tax if you invest in coins that are not legal tender in the UK. So, it’s important to choose carefully.

Talk to the gold experts at Physical Gold and make the right choices

Our gold investment experts at Physical Gold can offer you impartial, effective and practical advice when it comes to making the right choices for your gold investments. Call us now on (020) 7060 9992 or connect with our team online.

 

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Should investments in gold be for the long term?

Gold is an incredibly versatile precious metal. It is possibly one of the most liquid asset classes. Gold can be sold in the secondary market and converted into cash quite quickly. If you have invested wisely and distributed your investments across small sizes of gold, this can provide flexibility to your portfolio. This simply means that you can sell the required part of your holdings and raise money to fund your cash flow requirements. But a key dilemma that many investors have on their minds is – how long should the investment horizon be?

Gold investment should be for at least the medium term and act as a permanent part of an overall investment strategy. This is for two reasons. Firstly, gold performs extremely well during times of crisis and economic turbulence. By always owning some gold, you’ll be prepared for sudden market downturns. Reacting to events is too late as the gold price would likely have already risen. Secondly, the gold price can be volatile, so short-term investing can lead to losses if the timing is unlucky.

Insider's Guide to gold and silver

Gold – a solid and stable safety net

Most asset classes are dependent on a strong global economy to boost their performance. However, gold investing is different. Investors tend to move to gold when the global economy goes into a downward spiral. Back in 2011, the world witnessed the highest peak price of gold ever at the height of a global economic crisis that eroded currency markets and the capital markets worldwide. Have you been following the spot price of gold recently? As we brace ourselves for yet another period of economic turmoil, the gold price has been steadily rising and has reached the $1800 mark on the US exchange. Investors who built up their gold portfolio five or six years ago are ready to rake in their profits.

Should investments in gold be for the long term
This Hungarian gold coin dates back to 1491 and may be rare, but difficult to sell immediately

The multiple benefits of investing in the long-term

Gold investments aren’t just about protecting yourself from global economic woes. The yellow metal provides a healthy dose of balance, liquidity, and insurance for your investment portfolio. Gold creates balance by hedging the risks you may otherwise have faced when investing in other asset classes. Certain asset classes like real estate cannot be sold instantly. Gold is one of the most liquid forms of investment that can be sold into the secondary market at any point in time, providing much-needed liquidity for your portfolio. There are other benefits of investing in gold as well. Adverse economic forces over which you may have no control like inflation, counterparty risks and currency deflation can impact the overall value of your investments. Gold provides insurance against these risks by beating the rate of inflation and reducing volatility through predictable returns.

Should investments in gold be for the long term?
The gold Krugerrand is a liquid coin, but not tax efficient in the UK

Tax efficiency

Tax bills play an important role in determining the total value of returns on your investments. Investments in most asset classes are taxable and the taxman axes the profits you make over time. Investments that may appear to have a strong performance can suddenly look pale when your tax bill is factored in. Gold, on the other hand, is a hugely tax-efficient investment avenue. In the UK, all investment-grade gold is VAT free. Additionally, gold coins that have a face value and are considered legal tender in the UK are exempt from Capital Gains Tax (CGT). As an investor, you can save CGT on a threshold of £12,000 profits in a single tax year. This is a significant amount of tax relief and if you hold onto your gold investments over time and plan any sales by factoring CGT exemptions year-on-year.

Call Physical Gold to discuss your gold investment horizons

At Physical Gold, we are continuously studying the gold market and we can advise you on the right times to buy and sell. Please call us on (020) 7060 9992 to discuss your investment objectives and horizons. You can also reach us online by visiting our website.

 

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