When it comes to selling precious metals, there are several things you need to consider. We are lucky we live in an age where there are so many options available to investors and selling gold and silver at the best rate is relatively easy. However, if you’re not careful, it is very easy to get ripped off, particularly if you’re not sure what you’re doing. Here are 10 important considerations to consider when selling gold or silver.
1) Find out how much your gold/silver is worth before you sell it
Most dealers will always pay less than the spot price for your goods as they need to make money themselves. It’s always a good idea to get an idea of what your items are worth before you sell them, so you get a fair price. Try and do your own research as much as possible before selling your gold and silver, and if you need a rough idea of its value then there are gold/silver value calculators online that can give you the current value of your gold/silver per gram.
Futures prices are different from the spot price and show the predicted value of gold for some time in the future rather than their current value. Futures prices can only give you an indication of how well gold and silver are expected to perform, however, it is still worth checking futures prices before deciding to sell, as it can give you an idea on how well the market’s performing.
3) Monitor exchange rates as well as gold/silver prices
Since gold and silver are priced in US dollars, it is important to look at how well your currency is performing against the dollar before deciding whether to sell. It is not enough to simply look at the current value of gold/silver because if the currency your trading in is weak against the dollar, you may find that you’re not making as much profit as you thought.
Gold and silver coins
4) Should you sell on-line?
The internet has created many opportunities for investors to buy and sell online, however, there are risks involved with trading on the web. Whilst there are a huge number of traders and dealers on-line, there are also a lot of scams and companies looking to rip you off. Make sure you do your own research before selling online and shop around for different quotes. You can sometimes get better prices for your goods online as dealers have fewer overheads to pay.
Don’t be fooled by the several ‘cash for gold/silver’ schemes out there in the market. Most of the times, these are unscrupulous brokers who will pay you far less than what your precious metals may be worth. Also, it may not be safe to put your gold in the post and send it to these traders. Always trade with a well-known dealer who has a clean track record. There are several good online traders in the market today. It’s worth doing your homework in order to identify a couple. In the same vein, it’s better to develop a relationship with two or three good brokers, rather than stick to just one. This will give you the advantage of being able to shop around and lookout for the best deal you can get.
5) How liquid are the goods?
When purchasing gold or silver to sell, it is important to think about the liquidity of the goods before you buy them. In other words, how quickly or easily can you convert them into cash. Both gold and silver are considered liquid commodities, however, depending on what form you buy it in, it can sometimes be more liquid than others. For example, bullion coins are typically much more liquid than numismatic coins as the market tends to be less volatile and it isn’t exclusively coined collectors who buy them. Silver is also more of a liquid asset than gold. This is because it is much more affordable for most people, and therefore there are more buyers out there.
6) Sending by post
If you’re planning on posting the goods to a buyer, then you should always check first to see if your courier allows the transportation of gold or silver and whether the goods are ensured in the event of loss or damage. Most couriers do not insure gold or money, this means that if there’s a problem you probably won’t get your money back. Always make sure your parcel is tracked when sending and that they are “signed for” on delivery.
Three Gold Bars
7) Capital gains tax
Capital gains tax applies to everything you sell, exchange or have made a profit on. If you make more than £12,000 profit on any items you’ve traded in the financial year, then you will be subject to pay capital gains tax on anything over that amount. Certain bullion coins are exempt from CGT tax altogether in the UK. These include any coins produced by the Royal Mint that are considered British legal currency. For example, silver Britannia coins are exempt from CGT.
8) Don’t expect to get the spot price
You will rarely be offered the spot price when selling gold or silver as dealers are looking to make as much money as possible. Normally a dealer will have a buying price and a selling price. If you’re selling goods to the dealer you will always get less than if you’re buying from them. This is known as the spread.
It’s best to shop around for the best price when selling gold bars
As a buyer or seller, it’s important to understand the role that premiums play in the price of gold and silver. The spot price is really a guide price in the market that is stated in USD per ounce. Of course, on any given day, you will need to convert this price into GBP to understand it better. The good news is that many reputed UK brokers will already have the Sterling price up on their websites. Now, when you buy precious metals, you will pay a slightly higher price margin than the spot. Likewise, when you sell, you will receive a slightly lower price than the spot price at that point in time. Of course, these premiums can vary depending on what you’re buying or selling. For example, if you are buying gold coins that are rare and have numismatic value, they would command much higher premiums due to their age and market value.
9) Avoid the spread
The difference between the price a dealer pays for your goods at and the price they sell them for is known as the spread. One way to maximise your profit when selling gold and silver is to try and reduce the size of the spread through clever investing. The size of the spread can vary dramatically from dealer to dealer so always look around before buying. The spread is also considerably lower if you hold your gold in allocated storage with a bullion dealer rather than trading in physical coins.
10) Selling overseas
Don’t forget that when you sell overseas, the laws of the country in which you sell will apply to the sale. Always remember to check any rules and regulations that may be applicable if you plan on exporting gold abroad.
Precious metals must always remain a serious contender as an asset class in a diversified investment portfolio. Of course, the two most popular precious metals investors prefer are gold and silver. But what’s the upside in choosing one over the other? What’s the difference between the two metals other than their prices? When buying gold, investors need to be aware of a number of factors that can help them make an informed choice during purchase. Sometimes it’s important to understand the flow of the market and diversify into silver for a while. In this article, we look at the pros and cons of investing in gold and silver.
Gold represents safety for many investors across the world.
Whenever financial markets are at risk, or there is political turmoil in a certain geographic area, or the US dollar falls against the Euro, investors will choose gold to hedge their risk and insulate themselves from the crisis at hand.
Gold is considered by many investors to be a stable, dependable asset class that accrues steadily over the long term. It has low volatility and while it does not generate high returns in the short run, the risks attached to it are also very low.
Since gold and silver are mined, supply and demand will have an impact on its spot price. In reality, though, the COMEX spot price of both gold and silver is impacted very little by supply and demand. However, the high barriers associated with mining and sourcing gold and silver ensures that new supply is limited and both asset classes remain stable.
Buying and selling gold is easy and investors can test the gold content of coins at the time of purchase.
Gold has an intrinsic ‘desire’ value in humans and many investors like to possess gold.
Since the asset is held in physical form, it is not at risk of being hacked, unlike assets held in an electronic exchange.
Investing in gold – cons
Investing in gold coins can be fraught with issues as specialist knowledge of old and rare coins may be required to verify the actual value of the investment.
The gold coins industry is controlled by dealers who often charge premium prices and fees in excess of the real value of the gold used to make the coins.
Once an investor has made a substantial investment in gold coins or bars, this needs to be stored securely and insured, both of which can be expensive.
Gold and silver are two distinct choices for investment, when building a portfolio
Investing in silver – pros
Diversification is an extremely important factor to be considered when building a robust investment portfolio. Overexposure to any one asset class can open the investor up to undue risk. With this philosophy in mind, investment in silver is a healthy alternative to gold.
When we analyse 15 years of historic data related to spot prices of silver, we realise that silver has performed well and showed a healthy increase in price in most years. Silver prices posted positive growth in 11 years and crashed in 5 years from 2002 to 2017.
Since silver prices are more volatile than gold, as an asset class, it has the capability to generate quick returns, if it is bought at the right price point and sold off at a lucrative peak. For example, in 2010 silver prices grew by 83% as US investors chose to hedge their risks by investing in metals to escape the volatility of the global currency markets.
Investing in silver – cons
Due to volatility in silver prices, taking possession of the physical asset, storing it and again selling it at the right price can be cumbersome.
The rise of silver prices is dependent on a strong economy. However, during an economic boom, there would be better alternatives for investment and silver may not be the asset class of choice to deliver the best returns.
Contact us for the best advice in buying silver or gold
Mike Maloney says in his book – guide to investing in gold and silver,
“Of all the elements, silver is the indispensable metal. It is the most electronically conducive, thermally conductive, and reflective. Modern life, as we know it, would not exist without silver.”
For the right advice on investing in precious metals, look no further. Call our team of specialists on 020 7060 9992 or send an email and let our experts help you make the right investment decision for gold and silver.
Gold has been a popular commodity and safe haven of wealth for centuries. However, as we approach the very real prospect of a cashless society, where does that leave precious metals such as gold and silver? Governments and financial institutions are very keen for us to move towards a cashless financial system, arguing that it is more efficient and easier to prevent crime, however, what it really boils down to is control. With everything being digitised, governments can see exactly what money is being spent where and have a far greater command of the financial system.
What’s driving the move towards a cashless society?
Last year in the UK, more cashless payments were made than any year previously. In August 2016 over 260 million contact-less transactions were made in the UK alone, which represents a 200% increase from the year before. Across European countries like Sweden are already leading the way when it comes to becoming a society without cash, with cash transactions making up less than 2% of their total payments last year. If this evidence is anything to go by, a future without cash is a distinct possibility. Some experts believe we could even see it happen within the next five years.
That’s not all….
What’s driving this move towards a cashless society? Well, convenience is one of the main reasons. Many people these days prefer to pay by card as it allows them to keep track of their payments more easily and it means they don’t have to carry cash around with them. The problem is the nearer we get towards becoming a cashless society, the more reliant we are on banks as well as the digital system. If all of our wealth is reduced to numbers on a screen, then we are essentially powerless in the event of a technology glitch. All it takes is a system failure and people could find themselves with nothing to fall back on and unable to make the basic transactions necessary to live on.
Gold Bullion Bars
Negative effects of a cashless society
For every positive argument put forward as to why we should become a cashless society, there are also several negatives. For example, the government are very keen to point out that the removal of cash from society will prevent crimes such as money laundering, however, cash money laundering in the UK is nowhere near as big a problem as cyber laundering. It is also an easier and less costly problem to solve. Furthermore, a completely digital monetary system leaves us more exposed to the risks of cyber theft and other white-collar crimes such as online fraud. Financial fraud losses in the UK last year totalled £768.8m. Impersonation and deception scams, as well as hacking and malware, were highlighted as being among the main problem areas, with payment card fraud alone accounting for £618m of the total losses.
What does this mean for you…
Another big problem with a cashless society is that control is taken away from the ordinary citizen. Small everyday transactions such as leaving a tip in a restaurant become much harder without access to hard cash. A fully digitised payment system also means complete transparency of people’s spending habits. Banks and big businesses can see exactly where people shop, what they spend and how they fund their everyday lives. In other words, they would basically have a very detailed and accurate personal profile of every single person in the country. With data protection already becoming such a huge problem, any system that makes it easier for people to take advantage of our personal information is a worrying thought.
This is just one example of how banks would benefit hugely from a society without cash. As it stands, banks have to uphold a fairly acceptable level of interest rates in order to encourage people to bank with them. If people don’t have access to physical cash however, banks can afford to charge whatever interest rates they choose. In some counties including Germany, Denmark and Japan, this has even led to some banks charging negative interest rates in a bid to try and boost spending and investment. Some financial experts have warned that this could be a very real possibility if we continue down the path to a cashless society.
Cashless transactions are becoming the new norm
What this means for the future of gold
The closer we get to becoming a cashless society, the more important it will be for people to hold some form of tangible assets. In times of economic strife or uncertainty, people have always turned to gold as an answer and this is unlikely to change any time soon. In the near future, people will be forced to look for alternative physical currencies outside of the regulated system in order to protect their privacy and act as a safe haven against any systemic risks or potential Government expropriation. Gold is the perfect commodity in times such as these. Not only is it a finite resource with the potential to increase in value over time. Gold is also a very portable, easily stored form of wealth. Whereas people in the past might have stored some of their wealth in the form of a bag of money under the mattress, gold investments (such as gold bars and gold coins) could be the next best option for future generations.
Enjoy our video, “Buying gold – 5 reasons to invest” by clicking here.
This is already happening….
Countries around the world are already looking towards gold as a way of preserving wealth. Germany for example recently brought back all their gold reserves that were stored abroad in France and the US after the war back to the country. A clear indication they see gold as a valuable asset in these unstable economic times. In China, there is also a massive increase in the number of people investing in gold and the country saw a 50% increase in gold imports last year.
Interested in purchasing gold? Our advisers are here to help
Here at Physical Gold we strongly believe in the long-term benefits of investing in gold. If you would like to speak to one of our expert advisers, then please feel free to call us on 020 7060 9992 . We will then talk you through the different options available to you and advise on what we think is the right decision for you.
While there are many legitimate gold and silver sellers online, there are also scammers who work around the clock to steal your hard-earned cash. And social media is one of the places even moderately savvy investors can risk falling for these predators. Instead of choosing reputable gold and silver dealers, people may opt to buy through social media for convenience and other reasons. Here, we explore some of the risks associated with the buying of gold and silver on social media.
There is a great risk involved in buying gold and silver through social media
Inadequate details about the dealer
Most of the gold and silver dealers on social media do not provide detailed information to help buyers make a proper decision. Before making such an investment, buyers may want to know the years of experience of the seller, their location, the quantity of gold available, pricing, the business telephone number and more.
You can find these details on a business website, but you won’t find all of them on social media. This makes it hard to trust whoever is selling the silver or gold. If one proceeds to buy these products without such information, they may end up receiving counterfeit gold or silver or even be sold at exorbitant prices.
Every online shopper prefers to check out what other customers are saying about a particular product or company before making a purchase. Scammers know this, and may usually seed sites like Facebook and Twitter with legitimate sounding reviews to hoodwink new customers. The result is buyers may follow such fake reviews and end up buying non-genuine silver or gold through social media.
Storage is not guaranteed
While reputable gold dealers with business websites will provide a way to deliver the gold physically or store it in an insured storage facility, this may not always be the guarantee from social media-based gold dealers. Most online fraudulent dealers may promise to store your gold onsite without providing any proof of purchase. Therefore, even if buyers purchase gold from these dealers, they are not assured of its safety, not to mention arrival.
Reputable dealers have safe gold storage facilities
Limited expertise
New gold and silver investors have a plethora of questions that they want answered before they make any purchase. Trustworthy dealers have a team of professionals who are savvy in these investments and will gladly respond to questions from investors. However, this may not be the case when it comes to those social media sellers.
For the most part, it may be one or two people trying hard to sell the gold bars or coins. If investors rush into taking their offers without having someone to answer their questions, it may be hard to have a satisfactory transaction in many ways including pricing, storage, delivery and even legitimacy.
Buy gold and silver from trustworthy dealers
As you can see, buying gold and silver through social media is associated with risks that everyone wants to avoid. So, why not buy your silver or gold from a reputable company with industry experts who can answer any questions related to pricing, delivery, authenticity, storage, and more?
If you would like to buy or sell gold or silver, call us on 020 7060 9992. You can also leave a message on our contact form to start a productive discussion.
Gold has always been a highly respected commodity throughout the world with coins containing gold dating back to 800 B.C. Gold has been traded for centuries and is still one of the most important investments a person could make. With this being said, there are many reasons to own gold and we have created a list of the top 7.
1) Gold Has a History of Holding Its Value
Paper currency, coins and other such assets often lose their value, but gold is the one commodity that has retained its value for decades. It is often used as a way of passing on one’s wealth from one generation to the next.
Sure, the U.S. dollar is one of the most important reserve currencies in the world,
take the test but when the dollar drops in value, people often flock to gold for its security. There will always be large budget and trade deficits and a large increase in the U.S.’s money supply, and gold will still hold strong and will be one of the best investments you can make.
3) Inflation
When the cost of living increases, gold prices tend to rise. This makes gold an excellent hedge against inflation even during those high inflation years that see the stock market plunging.
4) Deflation
Just as with inflation, gold offers investors security during times of deflation. When prices decrease, businesses slow down and excessive debt takes over the economy, the purchasing power of gold will increase sharply.
5) Increasing Demand
The demand for gold has grown over the years and not just by investors. The jewellery industry consumes just as much gold as the technology industry and those demands are increasing every year. India and China are two of the largest gold consuming nations in the world, often competing for gold with investors looking to increase their investment portfolios worth with the precious metal.
6) Gold is uncorrelated to the stock market
Investing in an inter-connected world today can be tricky as global events almost anywhere can send the markets into a tizzy. A war in one part of the part of the world or a sudden terror attack can send shivers across the investment community globally, triggering a massive downslide. Stock markets all over the world are driven more by investor sentiment than good old-fashioned common sense and stock performance. Strong fundamentals of a company can have little influence on its stock performance if it’s caught in a market downslide.
Here’s the deal
When you by gold and hold it in its real physical form, you offset all these risks. While it’s true you won’t get a 30% return as you would from a technology stock in the middle of a bull run, but you trade that volatility for dependability and steady growth when you invest with a good window of investment. Gold has always generated good returns and will always have value as an asset class. There is also the added security in knowing that your asset is owned by you and in your custody or safe at a location of your choice. As such, your investment is not open to the risk of sudden market action. A good window of investment could mean that you need to hold your asset for 5+ years. Within these timeframes, gold has always appreciated in value and delivered great returns in the long run. In fact, one of the main reasons that people do invest in gold is to protect themselves from market risks associated with other asset classes. Even prime real estate generating good returns over time has been known to react adversely to market forces.
7) No issuer risk
Owning physical gold protects you against issuer risk. If you buy gold certificates, gold bonds or gold warrants, you are up against what is commonly known as issuer risk. This is the risk of the very issuer of your certificate shutting shop and filing for bankruptcy. Unthinkable as it may be, it is a possibility. If that were to happen you would be left hanging on to pieces of paper which would be worthless. In much the same way that stocks of a company become worthless when the company collapses, the issuer filing for bankruptcy could leave you high and dry.
Although there are many more reasons to own gold, these are the most popular. Are you ready to add gold to your investment portfolio? To learn more about gold investing, contact the professionals at Physical Gold today! Call us on 020 7060 9992 and talk to one of our gold advisors who can take you through the ropes of buying gold. There are many avenues to consider – coins or ingots? Rare coins? Let our investment experts guide you on how to expand your investment portfolio and add the yellow metal to it.
Counterparty risk is a risk within a contract where the counterparty doesn’t live up to its contractual obligations. Potentially counterparty risk is a type of risk which could be open to both parties and is one which needs to be carefully considered when entering a contract.
Counterparty risk is an everyday risk
We experience counterparty risk every day. Examples are buying shopping at a supermarket, leasing a car, paying for gas and electricity. We live in a contractual world, but do both parties always live up to their obligations?
With financial markets, there is always an element of counterparty risk
The risk in investment terms
For any type of paper-based investment, where no direct assets are involved, e.g. shares, bonds, traded funds, etc. there is always a degree of counterparty risk. Here is a list of just a few of the risks associated with the company or fund you may indirectly be dealing with:
Credit status – the credit status of the company / fund can create issues with ability to trade
Employee fraud – (e.g. embezzlement), particularly at Director level
Liquidity – whilst trading profitability a business may be illiquid, causing a lack of confidence with their bankers
Market changes – a sudden change in the market (e.g. oil price) could dramatically affect the value of an investment
Mergers and acquisitions – a significant organisational change could introduce new risk exposure
Overexposure to a bank – funds in a bank which collapses is a major financial risk
We hope you enjoy our YouTube video – “Buying gold bars – a guide for investors”
A cautionary word about gold ETFs
Don’t be fooled into thinking that gold ETFs (exchange traded funds) are free of counterparty risk,
they are not as they are a commodity, a financial instrument. Always think of gold bullion and coins investment as entirely different from gold ETF investment. Investing in gold that you can “touch and feel” is investing in a real and tangible asset, whereas ETFs are paper gold only
Many investors think that an ETF is the same as owning physical gold, in that the funds gold is inventoried and recorded in accounts and in member areas of websites. This is true, but there are numerous risks associated with this type of investment and in recent years there has been a frequent number of increasingly severe cases of collapse and mismanagement of ETF funds. This article from Business Insider provides a useful insight.
Physical gold and silver have no counterparty risk
Precious metals like gold and silver have been traded for millennia and can be relied upon as a safe form of investment of wealth. Unlike some forms of investments, they are not country-specific, gold and silver can be traded everywhere across the world.
Gold and silver are real, tangible assets, which can be touched and have a known market price. Precious metals cannot default on payments or go bankrupt, don’t need boards of directors and are not subject to many manipulations that other investments can be.
There is no counterparty risk with physical gold
Here at Physical Gold, we would always recommend a balanced portfolio of investments to spread risks. If you don’t own any gold or silver, why not buy some and reduce your counterparty risk?
Buy Physical Gold directly from us
So why not contact Physical Gold to buy real assets like gold and silver, which have no counterparty risk. We can deliver the gold and silver to you very quickly and provide an entirely smooth transaction. Contact us on 020 7060 9992 or email us through our contact form to begin discussions.
One of the main investment benefits of gold is its liquidity. In fact, if you think about it, the words “liquid” and “gold” go together as “liquid gold” proving the connection! In this article, we explore the liquidity of gold and how easy it is to convert gold bars and coins into cash in the bank.
“Liquidity describes the degree to which an asset or security can be quickly bought or sold in the market without affecting the asset’s price.”
Gold is highly liquid, convertible into cash and frequently rises in price over time
An example of poor liquidity
Take an investment item for example such as a house. This is an illiquid asset as it takes time to sell a house for its market price. Obviously, a house can be sold quickly, but this would be at a substantial drop in its value. Typically houses take 3 – 12 months to sell, so are illiquid where money is rapidly needed.
Gold prices are published 24/7, gold can readily be sold at any time
Gold based products such as jewellery can readily be sold for cash at high street jewellers
Gold can be sold at any volume, from millions of Kg to an individual bar or coin
Gold has a long track record of success (it was even used in Roman times), which adds to market confidence
The appeal of gold’s liquidity
The liquidity of gold is undoubtedly a benefit, which many investors overlook, but think about it for a minute, if you needed to convert gold into cash quickly, liquidity is vital! The fact that gold has a spot price worldwide means it can be treated similarly to a currency but actually has less risk than an individual currency which is subject to the whims of the economy of the currency in question. Private investors have recognised the importance of portfolio diversification through gold and have recognised the liquidity issues associated with investments such as commodities, hedge funds, shares, etc.
Liquidity of Gold Coins
To maximize the ease at which you can sell your investment gold, buying bullion gold coins generally beats the liquidity of gold bars or collectors coins. Coins have the advantage of being small in a denomination which increases the selling options, therefore enhancing liquidity. There are more people who can afford a small coin than a large bar, so more buyers equates to an easier sale. Bullion coins are the most liquid of all as they require less expertise and knowledge than numismatic (older) coins. To achieve the optimum price when selling obscure or collectors coins, more time is required to find the right buyer than basic investment bullion coins.
Other benefits of gold investment
When you consider other benefits of gold in investment
such as its rarity, as an inflation hedge, for investment portfolio diversity, its increasing industrial demand, the collectability/appeal of owning gold coins, etc. there are many other reasons too apart from liquidity to invest in gold. Effectively liquidity is an added extra benefit for free!
Contact Physical Gold to invest in gold
Investing in gold couldn’t be easier, simply contact Physical Gold today on 020 7060 9992 and we can advise you on the best gold investment approach for your circumstances. Look around our site to view our options and email us to arrange a call or with any questions you may have about gold investment.
Gold investment as an heirloom, it’s a definite option. Many investors tend to think of gold as a short-medium term investment but really there’s every reason to think about gold investment as a family heirloom, one that can be passed to the next generations. We explore this topic in our latest article.
First of all, let’s provide a definition of the word “heirloom” from the Oxford English Dictionary –
“A valuable object that has belonged to a family for several generations”.
Historic gold price chart showing gold has been a sound historical investment
Of course, for an heirloom to be deemed “valuable” within a family it doesn’t have to be an investment, treasured non-investment type heirlooms could include furniture, keepsakes, letters, photographs, scrapbooks, etc. The primary focus of this article though will be investment type heirlooms!
Examples of classic family investment heirlooms include art, ceramics, collections (e.g. stamps), cookware, jewellery, musical instruments, property, rugs and not least precious metals such as gold and silver!
Building family heirlooms with gold
Many wise investors have decided to build family heirlooms based on gold! There are two main ways to do this:
Gold coins – Buying gold coins, perhaps new issues, famous historic coins or a mix of both
It’s generally thought for heirloom purposes that investing in gold coins is better than investing in gold bars. The reason is primarily that gold coins have more interest than gold bars, which whilst valuable have no intrinsic appeal outside of investment.
Family heirlooms could be built with gold coins or bars
Buying gold coins adds numismatic / collectible value
When buying gold coins there is an opportunity for numismatic / collectible value to accrue. This is “over and above” the core precious metal within the coins, which will also vary over time. Prudent investment may lead to a significant return on original investments.
For example, how nice would it be right now to have built up a collection of Britannia coins, buying one each year from their launch in 1987 onwards. As we write you’d have 31 in your collection and have built a family heirloom into the bargain!
Build a gold family heirloom with Physical Gold
So why not build a legacy which will last? A gold investment heirloom for future generations of your family? You can do by ordering through Physical Gold, whether it’s a one-off or occasional investment or through our monthly saver account.
If you have an existing gold heirloom, then why not simply add to it? We can recommend gold options, which would be a perfect addition to your gold based heirloom.
Contacting Physical Gold
Call us today on 020 7060 9992 to discuss heirloom planning, or email us via our contact form. We’d be delighted to discuss the various approaches, many of which offer very beneficial tax advantages too.
Having a healthy investment portfolio adds “peace of mind”, particularly when approaching or during retirement years. Having a diversity of investments is important in reducing risks and balancing out returns especially in the medium-long term. Gold is often ignored or not even considered in a portfolio. In this article, we look at the benefits of adding gold to a diverse investment portfolio.
Blasting the myth that gold is a luxury and difficult to buy
There is a myth that buying gold and storing it is difficult. This is simply untrue. Once you know how, buying gold is as easy as buying water. Look at our “how to buy gold” for comprehensive advice. If you’re in doubt give us a call at Physical Gold and we can explain the options. There are simply no reasons to eliminate gold from an investment portfolio based on “perceived” complexity of purchase.
Gold bars are a safe and attainable form of investment
Investing in diverse financial products reduces risks and over the medium-long term generally increases gains too.
It’s clear to see from history that the global economy moves in cycles, different types of assets will perform better at different times during this economic cycle.
Investors would be very wealthy if they could exactly predict these cycles, so to reduce risk it is prudent to spread investment across a range of financial products, some safe, some higher risk, some with higher levels of capital growth, some with higher dividend income, etc. The general thought is that low performing investments will be countered by high performing ones and overall the portfolio would deliver appropriate returns.
That’s not all….
UK households especially have seen that even currencies aren’t safe with major swings being seen on £sterling since Brexit and also with Dollars and Euros across time. The idea that savings accounts and ISAs are the only or main investment/saving method is simply flawed, there are far more options, which add diversity, reduces risk and hedge against inflation.
The mix of investment varies by circumstances, which is where an Independent Financial Advisor (IFA) can offer value. IFA’s will have a feel for the economic climate and are likely to vary the mix of investments accordingly.
What % of a portfolio should be invested in gold and precious metals?
Ask ten experts and probably receive ten answers! There are numerous reasons to invest in gold (which we list below). A major reason is safety and reducing portfolio risk as gold is classed as a safe form of investment.
In general, we believe that a minimum of 5% and a maximum of 20% of a widespread investment portfolio should be in gold (bullion or coins). An IFA can advise based on personal circumstances, the exact mix will vary depending on returns required and level of aggression and attitude towards investment.
Coins could feature as part of an investment portfolio and add numismatic interest
Benefits of gold investment
The primary aim of this article is the diversity of portfolio, but it’s useful here to highlight some of the beneficial aspects of gold investment:
Collectible/hobby – potentially gold coin investment could become a hobby (“numismatics”)
Hedge against inflation – gold has in the long-term been used as a hedge against inflation
Indestructible – gold can’t be destroyed, cash/property can burn
Liquid – gold is liquid and can rapidly be turned into cash, unlike other investments such as property
Potentially higher profits – gold will potentially make higher profits than other investments (e.g. low-interest savings accounts)
Reduced counterparty risk – eliminate risks associated with third parties
Reduced risk of banking collapse – store wealth outside of the banking system
Reduced risk of financial market collapse – if markets collapse, e.g. Stock Exchange, gold is a safe haven
Safe – as discussed previously gold investment is seen as relatively “safe”, which has its value in a diverse portfolio, gold is often turned too in times of economic turmoil
UK Tax-free benefits – there are tax benefits associated with a gold investment in the UK
Related article
Also, see our previous related article “The Benefits of Gold” for information on similar topics.
Invest in gold with Physical Gold
So, if having read this article you’re interested in adding physical gold to your investment portfolio then call us today on 020 7060 9992. We are experts in the supply of gold coins and bullion and can advise on adding diversity through gold to your portfolio.
We also sell silver too, which is another excellent way of diversifying your investment portfolio. Why not visit our contact us page and send us an email today to start discussions?
We’re talking gold leaf and dust here – not gold bars or coins! One thing we need to make sure about from the start is that we are talking about the edibility of gold flakes, dust and salts here. Gold bars and gold coins are 100% inedible!
Some facts about edible gold
Edible gold is chemically inert and will not react inside the human body (e.g. to stomach acids). Gold will simply pass through the digestion system and will not absorb. In theory, people can eat as much gold flakes, dust or salts as they like without getting ill, it’s like any food though, stomach aches are likely to be the result of excess eating.
Edible gold has an E Number, which is E175 and is widely recognised as a food additive. Edible gold is also gluten-free and there is no need for any form of testing on animals.
As 24-karat gold is often considered too fragile and soft most edible gold also has small amounts of silver added too.
Champagne with gold flakes – a drink with the WOW factor
Now we have established that it’s safe to consume gold, we can now detail some of the health benefits of eating gold, these are listed below:
Anti-inflammatory – gold salts are well-known for their use in rheumatoid arthritis treatment and in similar applications
Cancer treatment – gold isotope 198 is used in some forms of cancer treatment
Dentistry – gold alloys are widely used in restorative dental surgery in applications such as bridges and crowns
Mental health – Treats mental health and nervous disorders such as depression, epilepsy and migraine headaches as well as increasing concentration and awareness
Psychological – There is a psychological aspect to many consumers who believe something this valuable and rare must also be of benefit to health!
Goldwasser is a popular drink in Poland and Germany which contains gold
Food and drink recipes for gold
Here are some suggestions as to how to add gold flakes into food and drink recipes. The primary reason to add gold in food and drink is ostentatiousness as gold has no taste or nutritional value, but does have health benefits previously described:
Chocolates and sweets – dust gold onto chocolates and sweets to add a WOW factor. Sweets with gold leaf are popular in Asia, with sweets like Vark being in popular use
Decoration – gold is used as a decorative additive to desserts and champagne flutes, etc.
Drinks – gold dust/flakes can be added to drinks such as Champagne and other expensive treats such as cocktails. In Poland, Goldwasser (translated Gold Water) is a traditional herbal liqueur
Fruits – Add gold dust to fruits such as dates, figs, grapes, oranges and pomegranates, etc.
Learn about “Understanding the gold price per oz” in this Physical Gold video.
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.
