Starting out in physical gold investment

No need to be concerned; these are frequently asked questions, and our purpose is to assist you in comprehending and determining what suits your individual needs. Our distinct advisory service is open to anyone contemplating an investment of £5,000 or more.
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Buying physical gold can seem daunting at first:

  • Does it matter if you buy coins or bars, or which sizes you choose?
  • Are all coins and bars treated equally when it comes to tax?
  • What about the different levels of purity, supply and demand?
  • Should you store it yourself or use a secure storage facility, and what does it cost?
  • How do you know that what you are getting is the real thing?
  • What happens when you want to sell?

Don’t worry, these are all common questions, and helping you to understand and decide what’s right for you personally is exactly what we are here for. Our unique consultative service is available to anyone considering an investment of five thousand pounds or more.

 

 

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You can start to get a feel for all of these topics on this page, and discover more detail on each area in the physical gold section of our website.

Or, if you prefer speaking to someone, why not give one of our expert consultants a call on +442081380859 and they will happily answer any questions you may have.

Why do people buy physical gold?

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Reasons to invest in gold

Beating inflation

Gold has consistently preserved its value, aligning with the increase in the prices of goods over time. A century ago, an ounce of gold was valued at approximately $20, and today its worth exceeds $1700, surpassing inflation over the course of a century. Investors refer to this phenomenon as an inflation hedge, wherein investing in an asset that appreciates with inflation serves as a strategy. While not a flawless correlation, gold boasts a robust track record of retaining its value, making it a compelling choice for a historical inflation hedge in financial planning, particularly considering the current inflation rate.

Historic growth

Gold doesn’t pay a dividend or interest, so you rely on the gold price rising to continue to generate value from your investment. The performance of gold over the past 20 years shows an encouraging trend. Twenty years ago, the gold price was just over £200, and it has increased over 600% since then, trading around £1400 – £1500 in 2022.

Safe-haven

Gold can serve as a safeguard for your finances in scenarios where other investments, such as shares or property, experience declines in value. Instances like the global financial crisis and the pandemic-induced economic downturn led to substantial drops in share prices, erasing potential profits from investments. As gold is perceived as a secure investment, individuals turn to this precious metal during periods of concern about their other assets. Consequently, gold often appreciates in value when other assets are in decline, acting as a safe haven during financial uncertainties. By incorporating gold into your financial plan, it contributes diversity, mitigating the fluctuations of other assets and reducing the risk of significant losses.

Buying gold: the basics

Should you buy coins or bars?

This is one of the most misconstrued aspects of acquiring investment-grade gold, or “bullion.” There’s a common misconception that gold bars are exclusively for investing and coins are for collecting, but that’s not accurate. Gold bars are also more cost-effective than gold coins for a given pure gold content, which might lead inexperienced investors to believe that they get more value for their money by choosing bars. However, the decision between options, or a combination of them, depends on your individual circumstances and investment objectives.

To provide some perspective, smaller coins may be pricier but are easier to sell, often commanding a higher price when liquidated. UK-minted coins can be entirely tax-free (including capital gains tax) for UK residents, but they cannot be held in a pension. Gold bars with a minimum purity of 99.5% can be held in a pension but are not exempt from capital gains tax, irrespective of pension status.

Our knowledgeable consultants specialize in the nuances of purchasing physical gold and can assist you in determining the optimal combination of coins and bars tailored to your specific goals. Feel free to contact us at

UK: +447958673385 & Dubai: +971586913385

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Storing gold in a secure facility

The most straightforward and secure method for storing physical gold is in a protected vault in the UK. The Pure Gold Company can facilitate this for you, ensuring that our clients benefit from having their gold fully segregated and allocated.

Fully allocated gold ensures that 100% of your purchased gold has been specifically assigned to you. Fully segregated gold means that the gold you’ve acquired has been kept separate from the gold of other clients, and it is held within your distinct account or compartment within the vault.

The cost of secure storage varies based on the quantity of gold being stored but typically falls between 0.65% and 0.95% of the gold’s value per year. In other words, it is comparable to the annual management cost of a typical actively managed fund in an ISA or pension.

Storing gold at home

A significant number of our clients opt to store their gold at home for maximum control. If you are contemplating this choice, you must take into account security considerations, including installing a high-quality safe and being discreet about the presence of valuable assets on your property. Additionally, the impact of storing physical gold at home on your insurance premiums should be carefully considered. While cost savings may be a consideration, it shouldn’t be the primary factor when deciding on home storage.

Storing gold at home

When deciding where to buy your gold, the foremost consideration is to thoroughly research your potential supplier to ensure their reputation as a reputable retailer. This involves checking customer referrals, feedback, and their memberships and accreditations, such as with the Royal Numismatic Society and British Numismatic Society, organizations dedicated to the study and understanding of coins and currency units. We are members of both, as expected.

Choosing the Pure Gold Company provides an additional layer of confidence, as we are well-acquainted with the origin of every piece of gold we buy and sell. We exclusively acquire metal from LBMA-member suppliers, ensuring full authentication (purity, weight, description, etc.) at the point of sale to us. We provide certification, enabling you to sell your gold with proof of its origin at any time.

Moreover, we extend an exclusive buyback guarantee to our clients, underlining our confidence in the metal’s origin. We are willing to pay a premium for fully authenticated metal for evident reasons.

 

A historic global currency

The enduring value of gold stems from its rarity and unchanging nature. Despite the cumulative global gold production exceeding 200,000 tonnes throughout human history, this amount, when melted down, would occupy only three to four Olympic swimming pools. According to estimates by the World Gold Council, approximately 50,000 tonnes of proven reserves remain in the ground.

This scarcity is a fundamental factor contributing to gold’s value, and it has served as a traded form of currency for millennia. In the seventeenth century, goldsmiths played a pivotal role in shaping the modern banking industry. Presently, central banks and nations are obligated to reserve a specific percentage of their wealth in gold as a safeguard against financial risks.

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