As the months fly by in 2019 towards March, film buffs all over the world wait with bated breath for the 91st Academy Awards – The Oscars, scheduled to take place in Hollywood, California at the prestigious Dolby Theatre. The event will commence at 1700 hours, Pacific Time on the 25th February 2019 (it will last from 01:00 – 05:30 UK time). The event is, of course, the most important film event in the world and notable films of 2018, their actors, directors and a host of other industry professionals will receive awards for their contributions to the world of cinema.
Origin of “Oscar” name
The “Oscar” name’s origin has been revealed by the Academy of Motion Picture Arts and Sciences. They say that Margaret Herrick, an Academy Librarian who went on to become an Executive Director said the statuette resembled her Uncle Oscar, so staff began calling the award an “Oscar”.
In 2016, the academy contracted a New York-based company to construct a 3D printed replica from a digital scan of the original 1929 statuette, which was then used to manufacture the new line of Oscars. Bronze is being used again in order to take the design back to its original version.
Contrary to popular belief, the Oscar statuette is plated with a thin film of gold
This is literally quite true. The actual production cost of an Oscar is only $400. If the entire gold plating on the statuette was melted and sold, it would fetch a paltry $57, or thereabouts. Believe it or not, this is because the gold plating on the statue is approximately 200 times thinner than a human hair at 0.38 microns! However, while the Oscars may not be worth their weight in gold, their collector value is immense. The academy has a clause in place wherein every winner signs a clause that gives the academy the first right of refusal at a price of $1 if a winner wanted to sell their statuette. In spite of that, 75 statuettes have reportedly been sold and the estimated market price is close to a million and a half USD.
Confusion as to the legality of selling an Oscar frequently arises after the death of the Oscar recipient where this clause becomes fuzzier.
Losing an Oscar!
With the busy lives that many of Hollywood’s elite live, you can excuse them a few indiscretions! Losing an Oscar sounds unbelievable but this has happened on numerous occasions, with celebrities such as Angelina Jolie, Colin Firth, Jeff Bridges, Marlon Brando, Matt Damon and Whoopi Goldberg all misplacing their statuettes.
Call us to know more about investing in gold
While you may not win an Oscar anytime soon, it’s heartening to know that there’s not much gold in it anyway! However, we want to ensure that your investments aren’t made in the same way. If you want to discuss your gold investments, please call us on 020 7060 9992 or get in touch with us online to discuss your investments in precious metals.
The Chinese New Year starts on 5th February 2019 and lasts until 24th January 2020 – the next animal to be represented is the pig. This is good news for investors as the pig is seen as a symbol of luck and financial success, it’s viewed as a good year to make money and invest! With this sentiment and the size of the Chinese investment market this is a positive indicator for gold prices in 2019.
The year of the pig 2019
The pig is the twelfth and final of the Chinese zodiac animals. The pig is last because it is said that pig arrived last to the part of the emperor! The pig belongs to the earthly branch and is “yin” in terms of “yin and yang”.
In Chinese culture pigs are highly esteemed and viewed as a symbol of wealth, pigs are seen as a sign of good fortune, especially their large ears and chubby faces. People born in the year of the pig are said to be gentle, loyal and generous in personality.
Previous years of the pig occurring in the last 50 years were 1971, 1983, 1995 and 2007. Why not buy a year of the pig coin as unique gift for someone born in this zodiac sign? It makes for a unique gift.
1oz Lunar Pig gold coin
Year of the pig – coin issues
These commemorative coins are typically offered in both gold and silver and always have a collectability premium when compared to the current gold/silver spot price. So, if getting the most metal for your money is a key priority, investing in gold bars or silver bars would work best.
The UK Royal Mint has produced a range of coins in both gold and silver, click here for info. The coins were designed by Harry Brockway and feature a sow feeding piglets with a night-time country sky setting. The following coins are available:
Gold coins – are available in one-tenth of an ounce, one ounce and five ounces sizes
Silver coins – are available in one ounce, five ounces and 1KG sizes
Detailed information about the Royal Mail mintages is available here.
Other Countries with the year of the pig mintages in 2019
There are many countries, which will have the Chinese Year of the PIG issues. Just a few examples of a special year of the pig coins are:
Call Physical Gold – experts in Chinese Zodiac coins
It’s good to know if you need helpful advice on all aspects of gold investment that you can always turn to Physical Gold. We always recommend you call us on 020 7060 9992 or contact us by email before making an investment in gold coins. We believe in general that Chinese Zodiac coins are a worthwhile investment as part of a collectable gold coins portfolio. Speak to our experts now and we can guide you through the process.
On March 17th every year, Irish compatriots from across the world join together for St Patrick’s day celebrations, one of the most important dates in the Irish calendar. Traditionally the day was a commemoration of Saint Patrick, he is the patron saint of Ireland and is associated with the arrival of Christianity in Ireland. Today the St Patrick’s day holiday is a celebration of all things Irish from shamrocks and Guinness to leprechauns and Gaelic football. In 2019, St Patricks Day falls on a Sunday making it even easier to celebrate as there is no need to book time off work!
Why is St Patrick’s day celebrated?
St Patrick grew up in Ireland after being captured by raiders at only 16 years of age and was kept as a slave. According to popular legend he famously rid Ireland of snakes, however, the truth behind this legend is shrouded in mystery as it’s believed that no snakes have been indigenous to Ireland since the last ice age. One theory is that the snakes being referred to in the story were actually druids or pagan worshipers that worshipped snake like gods. It is not known what year St Patrick actually died but we do know it was on the 17th March, the day on which we now celebrate St Patrick’s day.
St Patrick’s day gold
Irish folklore – leprechauns and pots of gold at the end of every rainbow
Gold has a long association with Irish folklore. Gold is often seen as a symbol of good luck and a popular Irish myth tells the tale of leprechauns love for gold!
Leprechauns are often associated with wealth due to their love of gold coins, they know when they are onto a good thing! Leprechauns as the mischievous creatures they are scour the earth for gold and when they find it, they store it in a pot of gold at the end of a rainbow.
Whether you believe in this tale or not, it’s fun to indulge in the leprechauns love for gold on St Patricks Day.
Gold coins – one of the symbols of St Patricks Day
There are many symbols which relate to St Patricks Day, but one of them are gold coins. Other symbols include leprechauns, beer jugs, clover, hats, the Irish flag and much more!
St Patricks Day wouldn’t be the same without some gold coins!
Why gold is the perfect gift for St Patrick’s day
If you’re looking for a special present to give to a loved one this St Patrick’s day, then gold represents the perfect gift idea. A gold coin or a small gold bar is a beautiful and unique gift that demonstrates just how much that special person in your life means to you. You can guarantee that not many people will be getting gold this St Patrick’s day, so your present will mean that much more.
The benefits of gold as a gift
Gold coins or gold wafer are often given as special gifts to a loved one. Normally when they are celebrating a momentous occasion such as their 18th/21st birthday or as a wedding gift. Gold represents a great gift idea for several reasons. Not only is it an excellent store of wealth that has been proven to hold its value over long periods of time, but it also introduces your loved ones to the idea of saving/investing and the many benefits of collecting gold. Unlike money which just tends to be spent straight away, gold is a long-lasting gift that can be treasured over time. Whether it’s a small gold bar or a shiny gold sovereign, gold is the gift that keeps on giving.
Give the gift of gold this St Patrick’s day
Physical Gold, stock a large range of gold collector’s coins perfect for gift giving this St Patrick’s day. From gold sovereigns to Gold Lunar Dogs, we have a gold coin for every occasion. Call us today on 020 7060 9992 or browse our complete range of collectable gold coins here.
The 48th World Money Fair will be held in Berlin in February 2019. Starting on Friday 1st February 2019. The three-day event will close on 3rd February. The event is one of the most significant numismatic events in the world, where people come together to study old and new coins issued by nations around the world. The 47th event in 2018 saw participation from around 330 exhibitors, who arrived from all parts of the world. Visitor numbers were in excess of 15,000 and the event was a grand success. Over 50 countries from around the world took part in the 2018 event, making it the most important numismatic event on the planet.
History of the World Money Fair
The first international event of its kind took place on 22nd January 1972 in Basel, Switzerland. For the next twenty-six years, the event grew in stature and importance. Initially, the event was a classic coin exchange that was a family run business. However, by 1999 the event had grown to dizzying heights and a new company was incorporated in 1999 to manage and grow the event. This was a step in the right direction that created the path for greater developments.
It soon became a global destination for coin lovers all over the world and firmly ensconced its position as a world trade show for dealers, collectors, buyers and anyone who was a part of the numismatic community. The event moved from Basel to Berlin and soon found itself in the centre of the coin universe in Europe. The Berlin Estrel Convention Centre, where the event is held, is an ideal venue due to its location. The event was scaled up to include presentations, conferences, discussions and coin trading was now possible in a large spacious area full of professionals. Every year, approximately 330 exhibitors come together in celebration of one of the world’s greatest numismatic events, which is witnessed by around 15,000 visitors.
The World Money Fair is one of the most significant numismatic events in the world
The exhibition area
The exhibition area spans 9,000 sq. m. and during the three days of the fair, this area becomes the world’s most important hub for the numismatic trade. People come to the event to exchange information with each other about new trends and technology developments. Of course, many come to browse through the collections and trade in coins and banknotes, etc.
Representatives of the most important mints from across the world are present at the venue along with specialist coin experts. This creates a truly international symposium where an unfettered exchange of knowledge and ideas can take place. There are press conferences where new coins are issued, and new technical innovations are shared with the media and the attendees every year. More importantly, the World Money Fair has a Media Forum, which has evolved over the years into becoming an important marketing tool for coin manufacturers and suppliers globally.
The 2019 event
The 48th event will open its doors on Friday, 1st February 2019 at the Berlin Estrel Convention Centre. The event will continue till Sunday, 3rd February. The opening hours are from 10 am till 6 pm, every day, except for the closing day when the event will draw to a close at 4 pm.
Supporting events
However, the technical forum and the media forum will have different dates and timings.
Technical forum
The technical forum will be held on 31st January 2019 from 1:30 pm till 6:30 pm and is open to registered trade representatives only, not to the general public. Around 400-coin trade industry experts are expected to attend this event. This forum has a special focus on minting techniques and will include discussions on coin manufacturing, production processes, technical discussions and procedures as well as exposes of the latest products and solutions.
A guest speaker at the technical forum of the World Money Fair, Berlin, 2018
Media forum
The media forum will be held on 1st February from 10:30 am till 2pm and will be open to the general public as well. This forum will consist of a number of English language presentations from various mints around the world including the Austrian Mint, LBMA (London Bullion Market), Mincovna Kremnica, Royal Dutch Mint, South African Mint and others too.
14th Berlin Auction
The 14th Berlin auction will be held on 31st January from 10 am in Hall A at the Estrel Centre.
About the Estrel Centre
The Estrel Centre on Sonnenallee in Berlin is only half an hour by train from Berlin Schonefeld Airport and is a prominent landmark of the city.
The full address details of the venue are:
Sonnenallee 225, 12057 Berlin, Germany
Phone: +49 30 68310
Speak to our experts before attending the event
If you are interested in attending this event and want to invest in gold and silver coins, we can help you make the right buying decisions. At Physical Gold, we have been advising numismatists for many years on making the right choices when it comes to investing in precious metals. Call us now on 020 7060 9992 or contact us via email. Our team of experts will be happy to guide you before you make a buying decision.
With the tax year end upon us, now’s the time that many take a hard look at their finances and make investment decisions for the following year. But if you’re one of the savvy investors already owning physical gold, then you’ll know buying gold and silver aren’t affected by the tax deadline.
Tax year-end brings a fresh start
If your money is currently in an ISA or savings account, then the tax year end might have you rethinking your investments and considering gold (or silver).
If you’re one of the thousands of investors wanting to move your money around, to reduce your tax exposure and maximise your gains, this article will provide insight into some important tax considerations, which every investor should know about.
Many investors just think of ISAs as tax-free investments, when in reality, they’re limited tax-free investments – meaning there’s an upper limit to how much you can save. The ISA limit for 2019/2020 remains at £20,000 maximum, but you can’t roll over any unused portion to the next year, so you have to use it or lose it.
Keep TAX rates down with UK Gold
Regular savings accounts are taxed
If your money is in an old fashioned, regular savings account, you’ll be charged a tax on any interest it generates. This makes a savings account quite unappealing for those who’ve already maxed out their ISAs. Especially with the highest available rates being around 1.5% and the majority of interest rates currently yielding sub-1% even before tax!
Capital Gains Taxes on assets you sell
If you’re looking into selling an asset or Buy-to-Let property that you own, you’ll likely end up paying Capital Gains Tax on the profits of that sale. This is especially true for those who’ve already reached their CGT allowance for the year. Many forms of Gold, on the other hand, are actually CGT free.
The lifetime allowance could affect your pension
The lifetime allowance, which was previously reduced from £1.25 million to £1 million, is a limit on the value of payments on your pension and could affect many people who’ve already reached this new allowance total. If you’ve saved into your pension throughout your working life, you could already be at this limit and you’ll be taxed heavier than in previous years. Check the Money Advice Service dedicated page for the latest allowance rates and related information.
UK Gold Coins have no Capital Gains Tax and no VAT
Physical gold has always been a worthy investment and gold investments make a great addition to any portfolio. Due to there being no upper limit on how much you can purchase in a year and certain forms of gold falling into the bracket for CGT and VAT free investments, it is looked on favourably by many investors. Currently, all bullion coins that are classed as legal tender in the UK which includes coins such as gold Sovereigns and gold Britannias, are CGT exempt. They are also VAT free providing the coins were minted after 1800 and classified as legal tender.
Coins to buy from Physical Gold
If you want to consider an investment that will appreciate tax-free, then take a look at our tax free-gold coins (including the Gold Sovereign and the Queen’s Beasts range) or our CGT free Silver. www.physicalgold.com even offers the opportunity to add gold to your Self Invested Personal Pension (SIPP) to achieve a balanced portfolio. Currently, the UK Government are willing to pay up to 45% towards the cost of your gold if you invest through a SIPP. This is applicable to all investment-grade gold bars or wafer that are professionally stored and have a purity of at least 99.5%.
Contact Physical Gold for 2019/2020 Financial Planning
Providing you’re looking for an investment that will help you diversify and protect your assets, whilst avoiding CGT and VAT (for gold), you can’t go wrong with Physical Gold. Call us without delay on 020 7060 9992 to speak to us or complete our contact form. We can provide guidance on how gold can comfortably fit into a wider investment portfolio for the financial year ahead.
The Pension and Lifetime Savings Association conference is one of the most prestigious investment conferences of the year. This years’ theme is “Investing on the Brink” and will take a look at investment’s role in creating prosperity in an equitable and sustainable way. The event will focus on a feeling that we are “on the brink”, with uncertainty everywhere in a post-Brexit world, with global trade wars and much economic uncertainty at this time. It will also cover topics such as the UK economy post-Brexit, global trade wars, defined contribution pensions, risk management in investments and much more.
Save for your pension with gold investment
Where will the conference be held?
The conference will be held at the Edinburgh International Conference Centre, the postal address of which is The Exchange, 150 Morrison St, Edinburgh EH3 8EE.
Who are the Pension and Lifetime Savings Association?
The Pension and Lifetime Savings Association (PLSA) are an organization set up to provide a voice for employers as well as trustees of pension schemes and the providers themselves. With support provided by over 13,00 pension schemes and 400 different businesses, the PLSA help educate pension savers through their partnership with Wealth at Work and provide a platform to help support them. Businesses are invited to become a member of the association by signing up to Fund Membership (aimed at pension funds and employers looking to offer a workplace pension or Business membership (aimed at organisations who provide services to the pensions and lifetime savings industry).
The 2019 conference
This years’ conference will take place over 3 days from 6th – 8th March at the Edinburgh International Conference Centre (EICC). Some of the keynote speakers to feature at the conference this year include:
Alistair Darling – the Former Chancellor of the Exchequer
Paul Johnson – Director of the Institute for Fiscal Studies (IFS)
Katya Adler – Broadcaster and noted Financial Journalist
as well as Hannah Fry, Elizabeth Corley, Jeremy Coller and Nathan Sheets.
The event is free for all fund members, with fees for business members and non-members. Your conference pass includes admission to all official conference sessions and social events as well as catering throughout the event. There will also be a drinks food and networking evening which will take place on Thursday 8th March.
Why attend?
The Pensions and Lifetime Savings association conference is one of the pension industry’s largest and most important events. It gives you the chance to network with over 950 pension professionals from different sectors within the pension industry including trustees, investment officers and scheme managers as well as investment managers, specialists and consultants.
Holding gold in a pension plan is becoming increasingly popular with investors who are looking for long-term financial security. Investors can now benefit from additional tax relief by investing in gold through a self-invested personal pension (SIPP) and can get up to
to 45% tax relief on gold bullion. Investors will usually gain access to their pension funds when they reach the age of 55.
The yellow metal truly has a magical aura to it! Who can help but be mesmerised by its timeless charm? Through time immemorial, gold has come out on top as the first choice for a gift that lasts forever. Even more effective than Cupid’s arrow, it never fails to melt hearts. With a New Year around the corner, Valentine’s Day isn’t too far away. So, if you want to really impress the one you love, it’s time to seriously consider turning to gold.
As a gift for your loved one that’s also a great investment, you should look at gold bars or gold coins.
Specific Valentine’s Day commemorative issues
Over the years there have been many commemorative Valentine’s Day bars and coins from around the world issued. These have various Valentine’s themes and whilst they often have a high premium (and therefore aren’t the best investment), they are a romantic gesture to give on the day.
Why give gold bars or gold coins on Valentine’s Day?
There are many reasons to give gold bars and coins on the 14th February, here are just a few to consider:
Lasting investment – Valentine’s Day is just one day and “comes and goes” before you know it. A gold investment endures and will have value for years to come whereas other Valentine’s treats (e.g. meal out, theatre/cinema, etc. will last just the one day!)
Something different – Giving gold in the form of jewellery is conventional, but in bars and coins is less so. Your partner is likely to think of this as a unique and thoughtful gift
Gold makes a thoughtful and impressive gift for your Valentine
Other gold gift ideas to consider
If giving gold bars or coins really won’t satisfy your partners Valentine’s Day wishes, then here are some other gold-based gift ideas for Valentine’s Day:
Gold jewellery – this is more conventional but giving gold jewellery at Valentine’s is definitely a safe option. Gold jewellery can be bought in many forms including bracelets, brooches, earrings, necklaces, rings, etc.
Household ornaments – a range of household ornaments could be bought, including gold photo frames, gold heart-shapes, love messages with gold woven in and much more!
Talk to us before you buy your Valentine’s Day gold
As we enter 2019 with a positive outlook for the yellow metal, you can’t go wrong on buying gold as a gift for your Valentine. Whether you’re considering buying gold bars or a set of gold coins, our experts at Physical Gold are the right people to advise you. We pride ourselves on our customer service and have guided many customers over the years on making the right choice when buying a gift that’s elegant, impressive and a sound investment. Call our team on 020 7060 9992 and discuss your investment options and they’ll ensure you make a purchase that will sweep your Valentine off her feet with a memorable purchase that will be remembered in the years to come.
At this time of year, most people are making either fitness, health or financial resolutions, so there’s a good chance that you’ll be considering a new year’s financial review for 2019. However, according to a report from the University of Scranton, only 8% of new year’s resolutions are maintained or achieved. So, we’ve outlined 5 ways to help you keep those New Year’s financial resolutions.
Reviewing your finances in 2019 is a great idea
1. Undertake a financial review of your current assets
The new year is a perfect time to take stock of your current financial situation, including cash holdings, savings, ISAs, pensions and loans etc., to help identify any areas for potential savings and improvements. You may decide that cash savings held in the bank, for example, are yielding very little interest and may be exposed to an increasing inflation rate in 2019. It’s important that this first task identifies whether your portfolio is diversified enough to protect against volatility and downturns. You can Take this Test to see how exposed your family’s assets are to further market downturns.
2. Be realistic and specific
Setting goals that are too vague or too challenging sets you up for immediate failure, which will probably mean you are likely to give up. Instead, think about smaller, specific financial goals that can provide you with a sense of achievement. It’s important to give yourself a timeframe, so you can measure your achievements, for example, within 3, 6 or 12 months periods.
3. Budgeting
Budgeting is one of the fundamentals of good financial planning. Keeping track of your income and expenditure each month makes it easier to set realistic budgets. Allocating your income in percentages can be a useful habit; for example, 20% for financial priorities, 30% for lifestyle spending etc. This enables you to save and treat yourself at the same time. At Physical Gold we offer a popular monthly saver account, which helps spread the cost of buying gold and also helps with your budgeting plans.
4. Look for tax-free and VAT-free alternatives
It’s not just your ISA that offers you a tax shelter for your investment growth. Rather than paying tax on investment gains, why not consider tax-free gold or silver coins. Make sure you research the best physical gold investment to ensure your gains are tax free and meet your objectives. It’s also never too soon to start planning for your retirement as, any money you put into your pension fund, will grow through the power of compound growth. Plus, you’ll also benefit from the tax relief. Pension Gold provides the opportunity to add gold bullion and balance to your UK SIPP.
Invest in tax free gold and silver with Physical Gold Limited
5. Track your progress
It’s worth financially reviewing where you’re up to on a regular basis, in line with the goals you set, so you can take appropriate action. Step back and consider your portfolio holistically. If you don’t currently own any gold or silver, now could be a good time to consider these, so as to provide balance and protection to your other assets.
Invest in gold and silver as a safe haven in 2019
With 2019 looking likely to continue with uncertainty and instability, especially with both the ramifications of Brexit this year, a new year’s financial review is the perfect opportunity to adopt some new financial habits. Gold and silver have for centuries been safe havens for investors in time of political and economic turbulence. Take a look at our Guide on investing in Gold or Silver for further information on the benefits of precious metals in today’s volatile markets.
Contact Physical Gold for support to your financial review
We know completing a New Year’s financial review can be gruelling, but it’s a very worthwhile exercise. Why not call Physical Gold today on 020 7060 9992 or contact us online for a call back. We are to help and can recommend suitable gold and silver products (from our coins and bars selections) based on your specific financial circumstances.
The day following Thanksgiving in the US is, of course, Black Friday and typically kicks off the official Christmas shopping season. If you thought that people only shopped for clothes, shoes and electronics, you’re wrong. It’s the festive season and a great time of the year to bring cheer to your loved one by buying precious metals. Historically, Black Friday has featured great sales of jewellery with discounts of up to 78.75% in past years.
Gold and silver are great gift ideas for Black Friday
Prices of gold and silver through 2018
The spot price of silver has fallen around 17% in the last year from around $17 per ounce to its current price of around $14.15. This makes silver an enticing purchase with many analysts believing that silver is now at its bottom price and will rise sharply in the future.
The spot price of gold has stayed in a much narrower range, being $1210 per ounce now, starting last November at $1275, rising to a peak of $1362 and a low of $1177. So, there’s been a 5% fall in prices over the year, which makes it also a good time to buy gold.
With 2018 drawing to a close, the focus is now on 2018 with the pundits coming out with their precious metals forecasts for the coming year
Black Friday gold and silver deals in 2018
A number of high street retailers as well as specialist dealers in gold and silver are expected to come forward with great offers for Black Friday – November 23rd, 2018. Goldsmiths have a great range of jewellery that they typically bring out with special offers for Black Friday. Jewellers, Ernest Jones have a range of offers on watches and jewellery on offer.
A trend that is likely to dominate Black Friday 2018 is mobile commerce. Shoppers in the UK are likely to spend more than £1.54billion on 23rd November 2018 – a growth of 13% year on year. Gold and silver retailers like John Greed Jewellery or The Jewel Hut will also join the action to get a share of your wallet during this event.
Ensure you know more before getting a Black Friday deal
Before you rush off and splurge on that Black Friday deal, convinced that it’s a no brainer, stop and think a while. If you don’t have prior experience in buying gold, perhaps you could benefit from our gold buying guide. If it’s silver, you’re after, not a problem.
Here at Physical Gold, we call our pre-festive sale ‘Gold Friday’, to reflect all the golden bargains we offer for a few days. In 2018, our Gold Friday sale runs from 7pm Thursday 22nd November to midnight Monday 26th November. Like last year we’ll be offering discounts off gold and silver coins and bars. Discounts will range from 1% on current year bullion products Best Value 100g Gold Bar, Best Value Sovereigns and Best Value Krugerrands, to up to 3% off Gold bars and up to 10% off more numismatic coins such as the Young Head Victoria Sovereign.
But please don’t wait until Monday night to pick up a bargain. All offers are subject to availability, and we anticipate some of the newly issued coins, and the biggest discounted coins and bars to go quickly. Also, don’t forget our buyback guarantee, which guarantees your right to sell gold and silver to Physical Gold.
Contacting Physical Gold
Whether you are reading this page during Black Friday 2018 or not, Physical Gold provide great prices for gold and silver bars and coins. Why not call us today on 020 7060 9992 or complete our contact form.
It’s an interesting question, which do you trust more? Printing more paper money has been a popular strategy for many central banks around the world. But would money be better if it was backed by gold? We investigate gold and paper money in this article.
A brief look at fiat money
Fiat money is a currency, which includes coins and banknotes that are considered to be legal tender from any government. The term ‘legal tender’ basically implies that a government of a nation will fulfil a promise to pay the bearer of a bank note the exact sum of the amount of money represented by the note. So, it’s like a certificate. The concept actually came from a time in history when the bearer of a bank note could be paid an equivalent amount of a precious metal, which was normally silver or gold. The government decree authorising this move was called a ‘fiat’, hence the name. In fact, fiat money has been around as early as the American War of Independence, which dates back to 1775.
The end of the gold standard
Interestingly, due to a shortage of gold and silver at the time, the earliest forms of paper currency in the US was backed by real estate and tobacco. Tobacco warehouse receipts were issued as promissory notes, authorising the bearer to have a claim on the exact amount of tobacco. Later the colonial governments discontinued this practice and switched to backing the currency with land. Although fiat currencies gained popularity worldwide throughout the 19th and 20th centuries, in August 1971, the US government discontinued the gold standard and terminated the post-war Bretton Woods system, which maintained the position of the US dollar as an international reserve currency, which was backed by gold with a fixed price of $35 an ounce. By then, it had become impractical to justify a fixed price for gold as a commodity that was being traded actively in a vibrant global market.
As more paper currency is printed, inflation erodes its value
The problem with fiat currencies
So, we can see that the very reason the gold standard was abolished was a growing lack of confidence in the US dollar. The balance of payments in the US deteriorated heavily, along with the US share of global output, as emerging economies prospered. The US would not have been able to make good their gold payments to uphold an already inflated dollar.
Stability and inflation have always been an issue with fiat currencies. Today, currencies are traded in forex markets around the world and the dollar’s demand is upheld by its parity to oil. The dollar has made a good recovery in the last couple of months on the back of better interest rates announced by the FED and news of a recovering US economy. As the price of the dollar rises, Asian and African economies who need to buy the dollar at a higher rate to buy fuel, have been plunged into crisis. The price of petrol has gone up dramatically in these nations, pushing the entire cost of living up, through a knock-on effect. Paper currencies now buy far less in these parts of the world than it used to.
In our YouTube video, we discuss the importance of “Gold investment as part of a balanced investment portfolio”
Gold maintains its stability
Fluctuating interest rates across global economies, coupled with inflation are leading concerns for the stability of paper currencies worldwide. In a recent case of hyperinflation, Venezuela’s currency, the Bolivar has become so devalued that paper bags are being made out of it for tourists. In the case of gold, this can never happen. The precious metal has been a global commodity that locks in tremendous value for thousands of years. Whenever the threat of inflation and economic uncertainty looms ahead, we see investors quickly moving to gold to safeguard their interests.
Talk to our gold experts to know more about buying gold
At Physical gold, our precious metal experts conduct extensive research about how gold is performing across the world. They are able to advise you on how to build a robust portfolio of gold and avoid becoming a victim of inflation through investments in cash. Call us today on 020 7060 9992 or send us a message online, and a member of our team will be in touch with you right away to discuss your investment goals.
Live Gold Spot Price in Sterling.
Gold is one of the densest of all metals. It is a good conductor of heat and electricity. It is also soft and the most malleable and ductile of the elements; an ounce (31.1 grams; gold is weighed in troy ounces) can be beaten out to 187 square feet (about 17 square metres) in extremely thin sheets called gold leaf.
Silver Information
Live Silver Spot Price in Sterling.
Silver (Ag), chemical element, a white lustrous metal valued for its decorative beauty and electrical conductivity. Silver is located in Group 11 (Ib) and Period 5 of the periodic table, between copper (Period 4) and gold (Period 6), and its physical and chemical properties are intermediate between those two metals.
