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.
So is jewellery a worthwhile investment?
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.
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.
Why does this matter to me?
There are a few benfits of focussing on investment grade gold.
1. The quality and purity of gold is assured and consistent. You always know exactly what you’re getting. I like to think of it as buying a bottle of wine from the supermarket which is a brand you know and the alcohol content is clearly stated. Compare that to buying alcohol in the prohibition era, and you never knew what you were drinking! This certainty is paerticularly important with a high value investment where yu need to eradicate risk
2. With standardised investment grade gold such as well recognised bullion coins from renowned mints and Swiss manufactured gold bars, you enjoy the comfort of knowing your gold is liquid. This means it’s easy to sell whenever you need. That’s mostly down to the fact that these investment grade gold coins and bars are globally renowned and sought.
How can I benefit?
This helps both the speed in which you can realise your proft, and also the price you can fetch. Compare this with the scenario of trying to sell non-investment grade gold such as a gold nugget. The uncertainty and amiguity surrounding it’s purity, authenticity and weight will narror buying opportunities dramatically.
3. Any gold classified as investment grade is VAT-exempt to purchase. Clearly saving 20% in the UK is a great incentive, especially when engaging in an investment. All the gold we sell is investmet grade as we believe in a focussing on value investments with tax efficinecy a priority. If you’d like to learn more about VAT and how it works with precious metals, read our revealing analysis here.
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.