Types of gold

Types of gold

Various Gold Investments

While our focus is physical gold bars and coins, it’s important to consider all types of gold when considering an investment. Gaining exposure to the gold market can be achieved in a number of ways, each with their merits and likely one may suit your objectives more than others. We evaluate each option available here. In the meantime, if you conclude that it is indeed the tangible physical gold which appeals, then read on.

Different Types of Physical Gold

When people think of types of gold, they usually imagine huge brick-like gold bars, in vast, elitist bank vaults. Or they might imagine pirate-like treasure chests, full of gold coins.Others imagine nuggets of gold, prized from the earth, or some various expressions alluding to gold dust. Obviously, our most frequent encounter with gold is with jewellery – whether it be gold rings, nucklaces or braclets. Gold jewellery as an investment differs from gold coins and bars in several ways. Firstly, it has a use. You can gain pleasure from wearing the jewellery. Apart from running your fingers through it, gold coins and bars don’t have an actual use (although owning it still provides pleasure!). Secondly, gold jewellery has a design element which can make each piece unique. This design element means the value of the gold jewellery is subjective. The price you pay for jewellery far exceeds the value of the gold content itself. For this reason, gold jewellery tends to be less effective as a form of investment than gold coins and bars. If the gold price rises, your jewellery will appreciate at a slower rate, as its value consists of subjective design value, not just gold. The only way gold jewellery will ever rise in value faster then gold bars or coins is if the designer becomes renowned or the piece becomes very rare.

It’s true; there are many different types of gold for investment, but it doesn’t have to be confusing. When investing into physical gold it’s important to establish which form offers the best value as an asset and which will be the easiest to sell at the highest price. In the same way as trying to sell an unusual house, realizing your profits on an obscure form of gold could prove to be difficult.

Investment Gold

Part of our process is helping you choose the best type of gold investment to meet your individual goals. Whatever your circumstances, you should always stick to the recognised forms of investment gold.

The HM Revenue & Customs definition is gold in the form of a bar or coin with a minimum purity of 995 thousandths for bars and 900/1000 for coins (minted after 1800). In short, that’s 22 karat gold coins and 24 karat gold bars.

One common misconception is that a 1oz 22 karat coin has less gold than a 1oz 24 karat coin or bar, but this is not true! All of these have 1oz of pure gold. The 22 karat coins simply have an additional 2 karats of alloy (copper and silver) to improve their wear and tear.

In the following sections, we run through the various coins and bars available.

 

Daniel Fisher

Daniel Fisher formed physical Gold in 2008, after working in the financial industry for 20 years. He spent much of that time working within the new issue fixed income business at a top tier US bank. In this role, he traded a large book of fixed income securities, raised capital for some of the largest government, financial, and corporate institutions in the world and advised the leading global institutional investors. Daniel is CeFA registered and is a member of the Institute of Financial Planning.