Common questions about gold and silver in the UK
Why Gold and Silver?
Gold is usually used as a hedge against inflation and can be a good store of value in a time of an economic deflation which is becoming highly likely in 2023 and beyond. Gold and silver have value as the precious metals are hard to produce and are also in limited supply.
You can’t print gold and silver unlike governments and central banks who can essentially print fiat currency out of thin air which, if too much is printed, then risks hyper inflation.
What should I choose? Gold or Silver?
Gold will always be the ultimate core investment if you are choosing between gold or silver. Gold is more scarce than silver and many people see gold as a more stable investment. Gold is more likely to be hoarded and stored away in vaults for very long periods of time making it harder to come by in its physical form.
Silver is also used as a store of value but also has many industrial uses. In the UK silver has a particularly low purchasing price compared to gold and the gold to silver ratio is very high at the moment (2023), making silver a good option to diversify your investment portfolio and could have more gains in the future.
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How can I buy gold and silver?
You can buy gold and silver bullion from a recommended dealer here.
You can buy physical gold and silver in the UK from your local coin/precious metal dealer, or there are a number of well established, trusted online bullion dealers that will deliver the physical metal to your home fully insured.
There are also a number of online bullion services that will offer you the option of holding your gold and silver in secure vaults that can be bought or sold in whatever quantity you want, whenever you want.
Dealers will charge a small premium on the spot price for their service.
What do I do about TAX and VAT?
Bullion is subject to UK capital gains tax. However, some specific coins such as British Sovereign or British Britannia are exempt from capital gains tax as they are technically British legal tender.
In the UK gold is exempt from VAT, but silver is subject to VAT at the standard rate.
Read more about Tax and VAT here.
Coins or bars?
Gold/Silver coins are ideal for both small and large investors.
Gold/Silver coins allow flexibility as you can buy small amounts over time to build wealth gradually.
For larger investors coins such as Britannia coins and British Sovereign coins are especially popular due to being Capital Gains Tax (CGT) exempt.
Gold/Silver bars do have the advantage of economies of scale, whereby the premium paid over spot price could be reduced the bigger the gold/silver bar. Bars can be harder to sell as it would be easier to sell say, half your 1oz coin collection, than it would to sell half your 1kg gold or silver bar.
What are the most common bullion coins?
Some of the most common coins might be:
1oz Gold/Silver Britannia.
A Britannia has the luxury of being Capital Gains Tax exempt in the UK and is a very cost effective way to invest in tax free gold coins.
Gold Sovereign.
One of the most recognisable gold coins in the world. Small in size makes them easy to store. Sovereigns are a good way to start investing in gold at an entry level due to them being more affordable at today’s prices. These 22-carat coins are also exempt from Capital Gains Tax in the UK.
American Eagle.
America’s most popular and preferred bullion coin. A global icon.
Canadian Maple.
The official bullion coin of Canada. The 1oz Gold Maple has a striking Maple Leaf design, attracting collectors as well as investors.
Chinese Panda.
The Chinese Panda bullion coin has the unique feature of a portrait of a giant panda that is re-designed every year.
South African Krugerrand.
The world’s first ounce denominated gold coin.
Click here to see our Top 5 Silver Bullion Coins for UK Investors.
Click here to see out Top 5 Gold Bullion Coins for UK Investors.
Where should I store my gold and silver?
Storing gold and silver at home.
Storing gold and silver in your house is an option. However, it is probably best to install a high quality safe, tell your insurance company and, most of all, keep it to yourself. Don’t go telling anyone on Facebook or your mates in the local bar.
When it comes to storing gold at home, only you and possibly very close family member, should know that you store gold at home.
Some gold and silver investors even install a dummy safe as a decoy if there was to be an unfortunate break in at your property.
Make sure there are a few layers of protection. Most potential thieves would want a quick grab-and-go situation, therefore, it could be an option to have a safe under floor boards with carpet over the top, or behind a cabinet within a wall.
Private secure vaults.
There are a large number of online bullion dealers that will offer you the option of holding your gold and silver in secure vaults that can be bought or sold in whatever quantity you want, whenever you want.
Having your gold and silver bullion in a private secure vault (using an established and trusted provider), offers ultimate peace of mind to any precious metals investor, as well as having some degree of flexibility when it comes to access your gold stack.
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Safety deposit box.
There are also things like putting your gold and silver in a safety deposit box. However, expect annual charges and make sure you do your research and use trusted branches.
With a safety deposit box, it is secure to a degree, however technically, a safety deposit box could be seized, or the law could change whereby your access is denied.
A safety deposit box is an option to store gold and silver in a small secure space for a relatively small fee which could actually work out cheaper than the extra home insurance premium.
How much is a gold or silver coin worth in the UK?
As explained earlier, the spot price of bullion gold and silver will determine the overall price of a gold or silver coin. Gold will always be of much higher value than silver as gold is more scarce, and investors usually see gold as the ultimate safe haven asset before considering silver.
There are also different sizes, years, styles and weights of gold and silver coins, from a 1/10th ounce Britannia, to a gold sovereign and more. Some coins also have numismatic value as they are rarer or are seen as collectors coins.
Either way bullion coins can be a great investment for the future. Always check the spot price and always buy gold and silver coins from a well-established local or online dealer. Most online dealers have the prices of all the different coins on their website and most prices are updated daily along with the spot price.
Is gold a good investment in the UK?
First and foremost, gold is not an income producing investment like other assets such as equities, bonds or property that you would normally find in a standard investment portfolio.
With gold investors, it is all about the price of gold going up or down and how this fits in to your overall investment portfolio. Investors would normally use gold to help diversify and to add a so called insurance policy when investment in areas such as the stock market are failing.
In recent years in the UK, it is reasonable to say that gold has had a good run, seeing gold prices continue to rise hitting new highs. See gold prices chart link on this website for info.
Typically, the price of gold usually does well in times of uncertainty, whether that be financial instability, political instability or global disasters.
Are many of these things happening in 2023?
Is gold a good investment during a recession?
To many investors gold is usually seen as a safe-haven asset. Historically, especially during a recession, investors have rushed into gold as a way to spread risk and to diversify their investment portfolio when other investments such as equities are falling.
In recent times, especially since financial crisis of 2008, you have the added fact that the Bank of England has been facilitating huge amounts of quantitative easing (aka printing money) which, in turn, is devaluing the pound sterling currency.
The reason why gold often holds its value is the fact that gold is limited. Gold is not only naturally scarce and has high production costs, there is a whole labour process involved. You can’t print gold, but the Bank of England can essentially print the pound sterling out of thin air or type it digitally into existence.
Throughout history, the price of gold has usually done well in times of economic turmoil, geopolitical uncertainty and during recessions.
The reason for this is typically, the stock market will fall during a recession as companies make less profit. Investors then see gold as a safe-haven asset, as gold does not derive its value from a business or credit. Gold is valuable in itself.
Obviously there have been ups and downs in the price of gold. However, you would see gold investment increase in value naturally over time as pound sterling fiat currency continues to devalue.
What should I be aware of?
Like in any industry, be aware of gold/silver scams, fake coins, cold callers, e-mail or marketing scams. It is always best to use well established, trusted bullion dealers locally, or an online dealer who will deliver the physical metal to your home fully insured.
e-bay?
The only thing to say here is do you trust the seller and can you be sure that the bullion is genuine?
Why should I invest in precious metals?
Gold and Silver is a great way to diversify your investment portfolio as it offers a unique chance to store your wealth outside of the banking system.
Physical gold and silver has been a strong and reliable store of value for centuries.
The price of gold and silver will never go to zero like a-lot of paper assets. Gold/silver coins for example, are an ideal alternative to printed fiat currency.
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