Buy Gold Bars
Not only does investing in VAT free gold bars offer a financially attractive way to secure your cash but it also offers a way to diversify your existing investment portfolio. The idea of buying gold bars from dealers may seem like the preserve of the incredibly wealthy but is, in fact, a standard way in which anyone can invest in gold. Available in a variety of sizes (up to 1000g gold bar) to suit your budget, you can buy online and tax free direct from Physical Gold Limited, dealers you can trust. Not only do we deliver in the UK direct to your door, but we can also offer storage for your gold holding in secure, high-commodity vaults.
Gold bars (or ingots) are produced in standardised weights, measured in troy ounces. Equivalent to approximately 31.1035g, a troy ounce is slightly heavier than an imperial ounce at 28.3495g. Though the weight is referred to in ounces, be aware that this measurement is different from that on your standard kitchen scales. Banks utilise a common derivative in the UK, a 400-ounce ingot called a ‘delivery bar’. Most gold bars owned by central banks are manufactured wholly flat for easy storage though European banks and investors still prefer the traditional brick shape. You can purchase them in varying denominations, from 5g up to 1000g gold bar or more, from UK dealers. The smaller the bar you buy, the more divisible the assets when you come to selling your gold. Gold bars can be manufactured by casting or minting; casting is the process of pouring molten gold into a press whereas minting is done via cutting from flat gold. Gold bars that have been minted are usually more expensive as the process takes longer and requires more precision handling.
Gold bars can be manufactured by any mint or bullion producer but not all are produced with the same quality. You can buy them with varying purity levels depending on the manufacturer and for some investors, this is a critical element. This is because the internal revenue agencies in some countries set minimum purity levels for gold bar reserves. This is most commonly a level of 999.9 gold fineness. The greater the purity, the higher the value of the bar. Each manufacturer may also offer varying levels of security when buying gold online including serial numbers of tamper-proof seals (see below). Bars of gold are predominantly manufactured in Switzerland as well as government mints with the major producers being Credit Suisse, Metalor, Umicore, Emirates Gold and UBS. Security Arrangements When buying gold online you should always use gold bar dealers that can provide provenance and/or a certificate of authenticity. Large bars (over 250g) usually have a serial number printed on them. This is a way of preventing investors from buying stolen or counterfeited goods, these unique numbers should tally with the certificate provided or sealed inside. Small denominations from gold bar dealers do not usually have these security features. However, minted bars produced in the last few years are most commonly sealed in tamper-proof packaging with a holographic security seal. Known as a Kinegram, bars that contain these diffractive logos are referred to as Kinebars. Storage When it comes to securing your investment, the safest way to store gold bars in the UK is in a recognised gold bullion vault. Not only does this keep your investment safe but it also allows you to maintain a record of provenance (‘Good Delivery’) that assures the integrity of the gold’s value. However, the choice is yours and, if you want to take physical delivery of the gold you purchase online, then you can do so. You have the option of storing your gold in a bank safety deposit box or at home in a safe. Bear in mind that if you do choose to keep your investment at home then you will need to inform your home insurance company. Remember that this is likely to increase your premium. If you buy large quantities of gold online then your gold bar dealers should be able to offer secure storage options on top of providing you with details of gold prices.
The major benefit of buying gold bars is the size of secure investment that you can make in one transaction. Bars are typically produced with certification as to the purity and value and are protected with sealed packaging to prevent counterfeiting. In short, they offer investors a very secure way to invest in gold that has a guaranteed purity. Gold coins, on the other hand, generally don’t come with certification. However, coins can attract additional value that bars do not. This is often related to their collectable value in addition to the worth of the raw materials. When it comes to storage, bars are easy and, if you are investing a lot of money, take a lot less space and organisation than the equivalent value in coins. Coins offer the opportunity to spread your investment as they can be purchased at a lower cost over a longer period of time and offer this same flexibility when liquidating your assets. Coins also offer the added advantage of their design aesthetics and historical significance. This is appealing for numismatists who enjoy collecting coins as well as investing. Lastly, there can be less of a premium when buying gold in bars as it costs less to produce a single bar than the equivalent minting costs associated with the same weight in gold bullion coins.
In the last few years, there are several new methods of buying gold bars UK-wide including gold-to-go style vending machines. The first such device in the UK was installed in a Westfield Shopping Centre in London in 2011. The trend for these gimmicky sales outlets started in Abu Dhabi and appeals to the impulse purchaser rather than a savvy investor.
Watch our Video, "Buying gold bars - a guide for investors"
Buy Gold Bars UK-wide from Physical Gold LimitedYou can buy gold bars online from Physical Gold as well as buy gold bars UK-wide from dealers. Our bars are produced by the Swiss manufacturers, Metalor, and are of a 999.9 finesse grade. You can purchase from us in up to 9 different denominations from 5g to a 1000g gold bar. All of our bars are VAT free and come with unique serial numbers printed on each bar as well as a certificate of authenticity. Our smaller denominations (5g to 100g) also come sealed with tamper-proof packaging. What Size Gold Bar Should I Buy? The choice of size is entirely up to the individual investor and the amount of money being invested. However, you should bear in mind that when it comes to liquidating your assets, it is easier to sell off part of your portfolio if you have several smaller bars than if you have a single gold bar of a higher value (such as a 1000g gold bar). You should also factor in economies of scale as larger bars can be purchased at a discount.
Gold bars are a good long term investment to provide balance and protection from economic downturns. The value tends to rise during times of political and economic instability and has averaged more than the inflation rate over time. Large bars offer better value than smaller ones, although divisibility should be a consideration. To be Capital Gains Tax free, buying UK gold coins offers an alternative.
Owning gold bars is completely legal. The question arises due to a period in US history just after the great depression in 1933, when the US Government issued a decree making it illegal to hold gold in the form of gold bullion without a unique warrant. Any gold owned privately could be confiscated in an attempt to stabilise the floundering economy. This lasted until 1974, and all restrictions have been rescinded since 1 Jan 1975.
Unlike financial securities such as equities and bonds, there is no requirement to formally register gold bar ownership. Electronic gold ownership such as ETFs would be more easily traceable as an ownership register exists which is why so many investors prefer the physical, tangible nature of gold bars.
Generally, all gold bars sold by gold dealers will be 24 carats in purity. However, not all sold globally are 24 carats. The term ‘bar’ really only refers to the format of the physical gold. You shouldn’t assume that purity is automatically 24 carats. Many mined on the African continent are only 22 carats, which make them difficult to sell outside of Africa. Often these bars are melted down and used for jewellery.
24 carat gold bars are not taxable when purchased in the UK. They benefit from a VAT exemption on investment gold (gold in the form of a coin or bar with a minimum of 995/1000 parts gold). Therefore, sub-grade 22-carat versions would be taxable. When gold bars are sold, any gains should be declared and are applicable for Capital Gains Tax if the annual allowance is breached.
The production of gold bars is registered with the relevant assayer, and a serial number recorded. However, there doesn’t need to be a register of private buyers. Gold dealers will need to invoice buyers and keep records, but these aren’t publicly available.
Gold bars are hard to the touch. But due to their high purity (24 carats), they are relatively soft in metal terms. Pure gold is malleable, so have a major possibility of scratching due to this. This is the reason why Sovereigns coins are produced in 22 carat format, which is deemed a more robust alloy.
Gold bars are VAT free if they’re 24 carats in purity due to the VAT exemption on investment-grade gold. There’s no income tax when holding them, and Capital Gains tax will only be applied on any gains in value upon sale that surpass your annual allowance. Selling gold bars strategically that have increased in value, i.e. some either side of tax year end will deem the bars tax free.
Gold bars are worth buying if you seek a tangible asset with no counterparty risk. Physical ownership is beneficial to provide balance to a portfolio consisting of mainly paper assets. The value can go up and down and is related to the underlying gold price. The gold price generally moves up in times of uncertainty so is desirable for those seeking a hedge against unstable markets.
Most gold bars are 24 carat gold which is the highest carat possible. Some bars on the African continent are a lower purity of 22 carats. The 24 carat bars are referred to as pure gold, but technically they’re not 100% pure. Purity can be anywhere from 995 parts per 1,000 upwards, but most reputable bar producers make bars of 999.9 purity.
The terms gold bars and gold bullion are somewhat interchangeable. Both generally refer to 24 carat gold in the form of a rectangular bar. However, bullion is also a term used to describe the ‘investment finish’ of certain coins. Bullion coins are minted for value purposes as opposed to proof finish coins which are more expensive collector's items.
It’s easier for fraudsters to fake or add non-gold substances to bars than coins. This is because the design of a coin is far more complex and difficult to copy. The best place to buyis from a trusted gold dealer, where they tightly control their supply network. All genuine gold bars should also come with serial numbers and many with a certificate from the mint.
This all depends on the size of the gold bar. Due to its high value, most people are surprised quite how small and light a bar £1,000 will buy you. However, as a dense metal, the larger buys can be very heavy. For instance, the largest is 400 ounces or 12.5kg but are smaller than a standard brick which weighs a mere 3.5kg.
Gold coins are generally deemed to be a better investment than gold bars, as long as you buy the right ones. Buying gold coins offers more divisibility than bars, benefit from quantity discounts, can be easier to sell, and be Capital Gains Tax free. Of course, the investment objectives and investment amount will also determine which is best.
Gold bars can be made in 2 distinct ways. Generally smaller bars tend to be minted, whereby a sheet of gold is stamped and cut into the required size, shape and weights. These minted bars tend to be very clean looking with a smooth precise finish. For larger bars, a second method is used to create what’s known as cast bars. Molten gold is poured into set size moulds to produce ingots. The finish of these tends to be more natural and rougher.
It’s best to buy gold bars directly from a precious metals dealer. Prices will be transparent and based on the live market. Usually, discounts are offered for purchasing bars in quantity. You benefit from the peace of mind knowing your investment is genuine and high quality and you’ll have a place to sell the bars when the time comes.
It’s best to sell gold bars through a reputable gold dealer. In the UK, stick to a gold broker who is a member of the British Numismatic Trade Association (BNTA). Try to ensure you have the bar certificate if it’s loose. It is possible to take bars into jewellers, but they’ll likely pay a lower price as they’ll simply melt down the bar.
Both gold bars and Gold ETFs have their value linked to the underlying gold price, so they both provide a degree of balance to mainstream assets. Bars benefit from having no counterparty risk whereas gold ETFs can be leveraged and there are additional risks associated with the provider. Buy/sell margins are tighter with ETFs due to their electronic efficiency. Fees may exist with both investments; ETF management fees, and gold bar storage costs.
The value of a gold bar depends on the underlying gold price and the weight of the bar. The approximate value of the bar can be calculated by multiplying the current gold price in grams by the weight in grams in the bar. As most gold bars are 24 carats, pure gold), no other sums are needed. The actual price will likely be slightly lower by a couple of percent depending on supply and demand in the market.
We would recommend that all gold bars should have an accompanying certificate. This certificate will come from the refiner and will prove that strict quality control standards set by the LBMA have been met. The certificate will provide a serial number, proof of authenticity and will have the place of origin on it.
Unless buying a substantial quantity of gold, choosing the right gold coins can be a better investment than gold bars. Bars can command lower premiums when large in size, but coins benefit from being more divisible. UK coins have the added advantage of being free from Capital Gains Tax for UK residents, and older coins provide more historical interest than bars.
As an investment, buy gold bars when the gold price is low to enjoy capital appreciation when the gold price rises. Prices tend to rise during times of Dollar weakness and general economic instability. So, don’t wait for the economy to slump as the gold price would already have risen. Buying gold in good times and selling in bad times will reap the biggest profits.
It’s best to sell gold bars in the middle of an economic crisis as the price will likely be the highest. Gold is sought as a safe haven in these times, so demand goes up and the price of gold follows. This directly impacts the price you can fetch for your gold bar.
Gold bars can be cheaper per gram to buy than Krugerrands if bought in large size like 1kg. However, Krugerrands are a good value coin, so the gain is minimal. Advantages of Krugerrands is that you can sell one coin or a handful whenever you need to. Owning one large gold bar doesn’t allow this. Buying lots of smaller bars is expensive.
If you’re seeking investment, then try to buy the cheapest 24 carat bar possible. Premiums are paid for certain brands, especially from Switzerland, or enhanced packaging, but these premiums may not be recouped upon sale. Pre-owned gold bars can be bought cheaply, just ensure they have a certificate and buy from a reputable gold dealer.
In the UK, gold bars can only be confiscated if they’re linked to money laundering or crime. In the US, under current federal laws, gold bullion can technically be confiscated in times of crisis, but rare coins do not fall into the confiscation category. All privately-held bullion could be confiscated during the Executive order 6102 after 1933, but that expired by 1975.
Very few banks sell gold these days as they have many other revenue streams and gold is deemed to be a specialist area. To purchase gold bars, it would probably be best to go to a reputable gold dealer to benefit from extensive choice, guidance and general good advice about the timing of purchasing and selling.
All gold bars over 250g should have a serial number on them. This serial number helps an assay office authenticate the gold bullion. Generally, this serial number will be on your invoice, so it can be traced back to your dealer.
Silver bars are clearly far more affordable than gold bars due to the price differential of around 80:1. This means that buying a bar for £3,000 can be underwhelming for those expecting a large brick-like bar. In contrast, a huge 5kg silver bar costs less than £2,500. Due to the low silver price, the relative production cost is higher than for gold, so bid/offer spreads are wider. Both bars can be held as safe havens, but the value of silver can also go up with industrial demand.