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The Complete Guide for New Gold Investors

Tuesday, June 30, 2020

As a novice gold investor you might be visiting an online precious metals marketplace for the first time. Perhaps you’ve heard of the tendency of gold to help investors batten down the hatches and ride out turbulent and stormy periods of economic uncertainty, downturns and even recessions.

If your interest has been piqued by the potential of gold to bolster your portfolio, 2020 might be the year for you to invest in gold. In this article we’ll guide you through everything you need to know about investing in gold and other precious metals. Perhaps it’s time to add some dazzle to your portfolio.

Gold prices are close to an all-time high

At the time of writing (June 26th) the gold price is £1,418 per troy ounce (the standard UK measurement for gold, approx. 31 grams), which is just £32 off the all-time high UK gold price of £1,450.85.

With many economic commentators predicting a UK recession as a result of COVID-19, prominent voices in the gold community are forecasting a resulting gold bull run, during which the gold price may well reach a new record. Demand for physical gold remains high in 2020, so now could be a highly opportune moment for a new investor to add precious metals to their investment portfolio, because gold could prove to be a safe asset amid coronavirus turbulence.

Gold often surges during turbulent market conditions

In 2019, gold prices reached an all-time high, as investors lost confidence due to Brexit uncertainty, and sought the safe haven of gold. This is because gold is considered resistant to periods of economic instability, in fact gold prices often rise during recessions. During the 2008 recession gold entered a bull run – a period where gold prices rise significantly – with prices more than doubling in just three years by 2011 to £1,182 per troy ounce.

Gold is a long term store of wealth

Newcomers to gold investing are often stumped by the question of when is the best time for them to buy gold online. The question that matters most is not when the best time to buy gold is according to gold prices, but rather when an investor can personally afford to purchase gold.

New investors often get lured into studying day-to-day price fluctuations in gold prices, but gold and other precious metals, in contrast to other forms of investment, are considered long term investments and the gains from buying when prices are lower should be viewed against the years of potential change that follow.

What is the difference between gold bars, coins and rounds?

Gold coins for investment can look similar to everyday currency, or can be more decorative and ornate in nature. Gold coins are generally fairly portable, often weighing 1 Oz. In general gold coins are a great choice for a first time investor, because they are available at relatively low value, and individual coins can easily be sold when you want to release equity.

Gold coins also make fantastic gifts for a loved one, can be an attractive decoration and are often collected by hobbyists.

Gold bars are often sold in greater quantities than gold coins. Small quantities, including 1, 2.5, 5 and 10 gram bars are available, however large gold bars can weigh up to a kilogram.     

Home delivery or secure storage?

One of the most common questions from investors new to gold is ‘where should I store my bars or coins?’ There are two options available, at home storage or a dedicated storage facility.

Those with small investments may choose to secure their gold at home using a secure storage space, usually a safe. Make sure you consider how much space you’ll need to safely house your gold, as well as enough space to expand your collection in the future. As an example, a 45 litre 81cm x 31cm x 18cm safe will hold around 10 kilograms of gold bullion bars.

Ensure your safe is protected against theft and environmental damage. Safes have a cash rating, this indicates the protection it provides. You’ll also need to ensure any home contents insurance policies you do have cover the value of gold you’re holding at home. You will also want to guard against environmental damage from fire and water damage. You can ensure you’re protected by choosing a safe that’s water tight and has a fire rating.

Larger investors often opt for storage facilities. We offer a range of safes and storage options for gold.

Track the live gold price

Our tool allows investors to directly track the live gold price. We base our price tacker on the live gold spot price in £ Sterling. The spot price is the standard at which a troy ounce of gold can be bought or sold.

We also have historic gold price charts which give a picture of how the gold price is trending. It shows the evening fix price of gold set each business day, we have records going back 50 years.

In addition to our gold price chart, check our silver price chartplatinum price chart or palladium price chart.

You can buy gold online VAT free

Investment quality gold bullion bars and coins are free from VAT. Gold for investment purposes has been exempt for VAT since 2000 by EU law. Other precious metals including platinum, silver and palladium will include a VAT charge, which can add a significant expense to your investment. This makes gold bullion bars and coins one of the most lucrative precious metals investments.

You can buy gold without Capital Gains Tax (CGT)

CGT is applied to the sale of an asset that has appreciated in value. It is applicable to many gold items, but not to legal tender. British legal currency including Gold Half Sovereigns, Gold Full Sovereigns, Gold Britannia and Silver Britannia is CGT-free.

Buy tax free gold today and benefit from a tax free investment opportunity.

How to buy gold online

Step 1 – understand the basics including terminology like spot price, troy ounce and more. Once you’re familiar with terms like this, research the products you might be interested in purchasing, whether gold or silver, coins, bars or rounds.

Step 2 – browse our website using our categories or search for a specific product in the search bar.

Step 3 – add you item(s) to the shopping cart and fill in your details, including payment details and shipping address, if you’re choosing to store your items at home. Visit our delivery page for more options, including collecting your items from our office.

Step 4 – click the checkout button and your free fully-insured delivery will be dispatched the very same day.

Step 5 – receive your items and let us know what you thought about our service levels.

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Our services are considered ‘excellent’ by our customers on Trustpilot, who have rated us 4.8/5.

Service levels

We recently posted an operational update to reassure our customers that the gold supply chain and delivery process have started to reopen after the interruption of COVID-19, due to safety concerns.

Read the message for full details on our temporary policies.

A New Gold Standard in the Making

Wednesday, June 3, 2020

The US dollar has been the lodestar for international trade for decades. It’s hard to find a commodity that isn’t priced based on dollars, and investors from around the globe can’t help but turn their eyes to the value of the currency itself.

Where the US economy goes, the world economy must follow. But one thing that could be taking shape suggests a decoupling from the US, with the dollar being relegated to a less important status, as gold regains its place in international trade.

The gold standard as exemplified by the Bretton Woods system has been gone for almost half a century, but elevated prices in recent years could suggest an unofficial gold standard already in the works.

A price too great to bear 

When the Bretton Woods system was in full swing after 1944, the idea was that currencies were pegged to the US dollar, and the dollar itself was given a fixed price relative to gold. As a result, gold prices were effectively static and the value of a nation’s currency depended on how much gold they had in their reserves. Britain faced a number of painful devaluations in the pre-1971 period, forcing them to reduce gold reserves. One of the latest sales in 1999 was estimated to have cost the UK as much as £14 billion.

But as inflation mounted in the 1970s, the US severed that crucial tie with gold, allowing the dollar to become a fiat currency. This allowed its value to float freely, and gave policy makers more control over the amount of dollars swishing around the global economy. As the dollar and the pound fell lower and lower over time, gold has done its job as a safe haven, soaring in value.

In that sense, the gold standard never truly went away. For investors willing to place their money into buying an asset with a centuries-old reputation for being an intrinsic store of wealth, the last few years have been highly rewarding.

As the British economy has been hit by shock after shock, gold has mounted an impressive price rally, taking it from less than £200 per troy ounce in the late 1990s to as high as £1,400 per troy ounce by May 2020. This outpaces the performance of stocks and shares, as well as the bond market, and as we shall see, gold is ripe for greater gains in the coming years.

Nowhere left to turn but gold 

Gold is in a special situation, ripe for investment, as so many other asset classes look increasingly overvalued by some standards, or overcrowded at the very least. The stock market has tumbled into a bear market, meaning it lost over 20 per cent and its performance depends on how quickly the economy can recover from the COVID-19-induced lockdown recession.

Bonds have been a suitable alternative to shares, especially since the unravelling of the Dot Com and subprime bubbles. Interest rates have fallen to virtually zero per cent, with bond yields falling in tandem, sending bond prices to record highs. However, with yields now hitting sub-zero or negative rates, the prospect for gains is incredibly slim.

Gold, by comparison, carries no yield and makes gains purely by price action alone. Assuming that you can time an investment wisely, you can make an inflation-adjusted positive return over time, which is just as well, because gold often surges during times of economic turmoil as evidenced by recent market moves. It took gold just five years to double in value, from £700 to £1,400 per troy ounce. If such a trend were to continue, as a baseline scenario, you could sell an ounce of gold for as much as £2,800 by 2025.

It might just be time to consider joining a growing number of investors and buy gold today. Prices are already hitting new all-time highs in pound sterling terms, and a breakout in US dollar prices could prove decisive in marking the start of a new bull market in gold. As stocks and bonds sink into low returns and a lack of profit over time, why not consider buying gold today?

The Gold Bullion Company is pleased to announce it has been able to resume dispatch of gold bullion items, but please note that new orders will take between three to four days to deliver. For more information about investing in gold today, contact the Gold Bullion Company here.

Operational Update

Thursday, May 21, 2020

As national and international lock-down measures are eased and Covid-19 infection rates fall, the precious metals supply chains are once again beginning to stir into life.

We are now seeing improved delivery services and receiving stock that has been frozen in the system for some time.

As producers begin their efforts to resume production there are and will continue to be delays compared to the 'normal' supply chains of the past.

Our staff members have been working flat out to clear the huge backlog of orders, primarily caused by disruption to our delivery systems, and we can now see some light at the end of that tunnel.

New orders are generally being dispatched within 5 working days of receipt.

In order to keep the build-up of orders at a manageable level we were forced to impose a minimum order value of £1,000. That limit has now been reduced to £350 with immediate effect. We apologise for any inconvenience that this measure is causing and can assure customers that the limit will be removed as soon as possible.

We saw some eye-watering increases in premiums at the peak of recent demand but the worst of these are beginning to subside, particularly in respect of larger gold and silver bars, which allows us to begin to reduce margins. As this situation develops there will be apparent price discrepancies by brand but these will provide buying opportunities for customers looking for a bargain!

Clients wishing to sell items can once again send in to us by Royal Mail insured Special Delivery and we hope to announce the resumption of appointments at our offices in the near future for larger transactions.

A sincere ‘Thank You’ for the patience and understanding shown during this difficult time and for the many messages of encouragement and good wishes that we have received from customers.