There are many ways for modern consumers to invest in gold. Depending on your circumstances, you might wish to purchase gold through a one-off payment or perhaps you might decide to spread the risk by investing in a monthly saver plan. The flexible nature of gold investments means that you are never short of options when it comes to how you can invest, there are more choices now than at any time in history.
Purchasing gold outright
If you have the money to do so, then purchasing physical gold or bullion outright is the simplest way to invest in gold. You can buy bullion in two main forms. Either by purchasing gold coins (e.g. Sovereigns) or gold bars. Whilst there are pros and cons to both, it is generally considered easier to sell coins as they offer more flexibility. For example, you can sell one or two coins at a time rather than having to sell all of them.
If you’re seeking variety….
Gold coins represent a great investment opportunity for investors. You can either invest in historic collectors’ coins or gold bullion. Collectors coins can provide great returns as they offer numismatic value as well as material value however, they also require a greater degree of market knowledge as their value is based on many different factors, not just simply their weight in gold.
Gold bullion coins are the most popular form of gold coin investment as they have a high gold content and a guaranteed level of purity. Certain gold bullion coins are also exempt from VAT and Capital Gains Tax. This includes all gold Britannia coins.
If you want to buy in bulk…
Gold bars are a great way to purchase gold in bulk. Investors have several options with regards to weight and can choose from 10g gold bars, 5g gold bars, 100g and 1oz. Many dealers also offer Vat free gold bullion bars with the option to store the bars in their own allocated vaults.
One helpful tip you might want to consider when purchasing gold is to always make sure you buy your gold through a recognised broker or professional dealer in order to avoid the risk of buying forged coins. When purchasing gold online or through sites such as eBay, you should always be careful that what you’re buying is exactly as advertised.
100 Gram Gold Bar
Monthly Saver
A monthly saver gold plan is ideal for investors who want to invest in a set amount of gold on a regular basis. If you don’t have a huge amount of funds to invest, or you want to spread the risk of investing over a longer period, then a regular gold investment plan is an ideal option.
A monthly gold saver plan offers investors the opportunity to gradually build up a portfolio of gold over time. The main benefit of purchasing gold this way is that investors avoid buying gold while it’s at its peak and doesn’t have to try and predict future twists and turns in the market.
Also, read our gold bars investment video – “Buying gold bars – a guide for investors”
Pension Gold
Holding gold in a pension plan can provide
additional security for investors looking for long-term financial security. A self-invested personal pension (SIPP) now allows individuals to benefit from additional tax relief on the cash invested in the plan and you can invest in gold bullion as part of a range of diversified investments approved by HMRC. Since the financial conduct authority added gold to its list of approved assets, investors can now benefit from up to 45% tax relief on gold bullion.
Here’s the deal….
For gold bullion to be eligible for a pension scheme it must fit certain criteria. Currently, these criteria extend to all gold bars or wafer with a purity of at least 99.5% providing it is professionally stored. The only potential disadvantage to pension gold is that you don’t own your gold directly as it belongs to your pension fund. This means that should the price of gold go up, you can’t just then decide to sell.
Invest in Physical Gold’s different gold plans
Here at Physical Gold, we offer two main investment packages including our regular monthly saver plan and our pension gold plan. If you would like to discuss either of these in more detail or need additional information on any of our other services, please give our experienced advisers a call on 020 7060 9992.
Image sources: Pexels
Gold Supply
Gold is becoming increasingly scarce in the world, with scarcity driving up the price. Of course, many people who already hold a large amount of gold and gold dealers believe that this scarcity is a good thing that will continue to keep the spot prices of gold up. But, let’s just stop for a moment and figure out how much gold is left on the planet that hasn’t yet been mined.
Well, the World Gold Council thinks that 190,040 tonnes of gold have already been extracted from the ground throughout human history. According to them, if all the mined gold were gathered up and put together, it would form a large cube with a height close to a 7-storey building.
The availability of gold
Now, human civilisations have mined gold for thousands of years. It would probably be impossible to assess how much gold these predecessors of ours mined and used up. Infact, current estimates are dependent on the price of gold. Now, if you’re wondering what the current spot price of gold can have anything to do with estimating the amount of gold that’s underground, stop for a moment and think again. The current market price of gold has to be able to pay for exploration and extraction of gold from below the ground. Mining companies incur huge operational costs in removing the gold from the mines. If the current prices are unsustainable, then it’s pointless for the companies to continue to operate and explore these resources. So, current estimates of gold calculated by the large mining companies are divided into two categories.
Many gold mines have already exhausted supplies and have been abandoned
‘Reserves’ mean the amount of gold available and ready to mine, provided its economical to do so at the current prices of gold. Then, there are ‘Resources’ which are unviable to extract from the ground at the current spot prices. However, the company is willing to wait for this gold to become available for extraction at a different price point. The price should cover all the costs incurred by the company including exploration and discovery of new sites, geological and environmental surveys and the operational cost of mining.
Download our FREE 7 step cheat sheet to successful gold investing here
The peak of gold
Now, gold is certainly one of the rarest elements on this planet, spanning around 0.003 per millionth part of the Earth. The rarity of gold postulates the question, “How much of it is left anyway?” According to Eugene King, gold analyst at investment bank Goldman Sachs, the peak of gold has come and gone in 2015. The report claims that there may be only 20 years of gold mining left. According to King, ‘known’ reserves of gold will be depleted around the year 2035. However, similar predictions were made about oil and the Hubbert’s Peak Theory claimed that global oil had already peaked in the 1970s. However, new reserves of oil continue to be discovered even today. So, the key factor in these theories is that they are somewhat based on sources that have already been identified.
Some analysts predict that the last gold nugget could be extracted around 2035
Space mining is a possibility
In all probability, 2035 may come and go, and even if we deplete all the known reserves of gold, mining companies and governments would continue to invest in exploration in the hope of discovering new supplies of gold, in response to the world’s rising demand for the precious metal. There is even speculation that mankind would be able to discover new reserves of precious metals on extra-terrestrial locations like the moon and certain asteroids. Interestingly, former American President, Barack Obama even approved new legislation that allows mining in space.
Gold volumes mined today
Currently, international mining companies produce approximately 50mn troy ounces of gold per year. While that may sound like a lot, it’s actually just enough to fit into a cube measuring around 4.3m on each side. So, what could happen if the world’s gold production trickles to a stop? Well, the first thing that would happen is that prices would go through the roof, provided demand continues to rise. Industries may look for substitutes to replace gold.
Assuming that prices were to keep rising, serious investors need to be aware of the market trends and start investing in gold now, in order to maximise their gains in the years to come. In fact, the amount of gold underground isn’t really that important, as some of it may be there in the depths of the Earth and may never be extracted. It’s important to predict how much-known gold reserves could be taken out in the years to come.
Talk to our gold experts to understand the future of gold
At Physical Gold, our industry experts invest a lot of time in research to understand exactly which way the precious metals markets are headed. We base our investor advice on this research and you can benefit from this as well. Talk to a member of the investment team today on 020 7060 9992 or get in touch online. Our team has many man-years experience in this industry and are best placed to give you the right advice for your gold investments.
Image credits: Pixabay and Wikimedia Commons
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