<p>Definitive Insider’s guide to gold and silver investment</p>

Definitive Insider’s guide to gold and silver investment

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Investing in gold can seem like a daunting pursuit for the first time investor. Even if you’re experienced in gold investment, the market changes regularly, as do those who operate within it, and finding a long-standing investment partner who offers a personal, tailored service, can be difficult.

Physical Gold offer a bespoke, personalised service – which is suitable for both first time investors, looking to invest securely in gold and experienced investors, seeking tax-efficient precious metals.

The history of gold investment

Gold has been seen as a valuable commodity throughout history, serving at times as a currency itself, or simply as an alternative store of wealth to paper currencies.

Gold is a commodity and therefore investing in gold is very similar to investing in any other valuable resource. The price of gold (and other commodities) is driven by supply and demand, with higher prices expected when either demand rises, or supply falls. However, the spot price of gold can be impacted by many other complex factors.

The current supply and demand picture

There is a finite amount of gold on the planet… a fact which underpins the gold investmentpredicted inability of the supply of gold to meet the long-term demand, thus continually pushing the gold price higher. The mining of gold continues and new players, from various continents, have entered the market in recent years, but the picture remains; one of continued or increasing demand, against a static supply.

The practicalities of gold investment

Once you’ve decided that you want to purchase some gold, Physical Gold will scour the gold market on your behalf. Your gold can then be stored in our secure storage facility, or shipped to your address via a secure, insured service. The option which is right for you will depend on how much gold you’re purchasing, your reasons for buying gold and your access to secure storage.

How do you make money from gold investment?

Like any form of investment, and any commodity, investors make money from gold by buying and holding the metal until the point at which it reaches a favourable price. If you purchased gold in 1970, for example, then you may have been able to acquire it at around a price of £15 per ounce. If you sold that gold in 2010, then you may have been able to secure a price of £912 per ounce!

Why do people invest in gold?

As the above example shows, there’s no doubt that gold can be an attractive investment opportunity for many individuals, but why do people invest in gold over other commodities, or instead of stocks or cash investments?

The reason many people invest in gold is mainly to do with the investment principle of ‘Diversification’. This is the practice of spreading your investments across different asset classes, usually with the aim of protecting your assets against potential losses in any one class.

For example, it’s likely that many people will hold some cash investments, which accrue wealth based on interest rates. Interest rates have been poor in the UK since 2009, which means these cash investments may have actually fallen in value, when inflation is factored in. Similarly, if you own stocks and shares, they’re also vulnerable to poor performance at times of market uncertainty, such as the global economic situation we’ve experienced since 2008.

Gold is seen as a savvy way to diversify from such holdings. Commonly referred to as a ‘hedge’ to these other types of investments, it has historically performed well in market downturns, providing overall portfolio balance.


Your gold investment options

Individual purchase or sales

A lump sum purchase of gold coins, or gold bullion, can be suitable for those wanting to add gold to their portfolio immediately. Many gold purchases, bought through Physical Gold, are completely tax-free, and you can take advantage of our 0% commission rates and Buyback Guarantee. There are also special discounted purchase rates for those buying larger volumes of gold. Find out more on our tax-free gold page.

Monthly Saver

Just like saving into a cash account, such as an ISA, it’s possible to gradually build your gold holding over time, through regularly scheduled, gold investment. This makes an investment in gold affordable for all, providing greater flexibility when it comes to growing your gold holding.

Pension gold

Like other forms of investment, such as shares, it’s also possible to hold gold as part of your Self Invested Personal Pension (SIPP). This places gold investment bars as part of your pension funds, locking away the value until you need it for your retirement years. Investing in gold via your pension, is similar to other investment options and it can also be held in the same pension as stocks, bonds and cash. You can find out more about why, and how, you might want to purchase gold bullion within your SIPP on our dedicated pension gold page here.

Click here to download our guide to ‘Investing in Gold and Silver’.