A checklist for gold, silver and platinum

Many people choose to invest in gold, silver or platinum, opting for such investments for a plethora of reasons. However, investing in such metals involves taking a number of factors into account.

Why should you buy gold, silver or platinum?

There is certainly something unique and tangible about holding a bar or coin that has been formed from precious metals, but an investment decision is clearly about much more than simply considering how gold, silver or platinum would look in the palm of your hand.

Investing in precious metals could provide a useful means for diversifying your investment portfolio, with gold, in particular, often being seen as a safe haven during times of economic uncertainty.

Is this a realistic investment option?

It may be tempting to think that gold, silver and platinum bullion are the preserve of the super-rich, as you picture movie scenes of gold bars piled high in warehouses or vaults. Fortunately, the reality is rather different to those imagined scenes.

The gold and metal markets have probably never been more accessible than they are today. Some smaller gold coins produced by The Royal Mint, as well as our RMR bars, for example, provide a relatively inexpensive means of entering the market. DigiGold also allows anyone to purchase gold from as little as £25, and store it within The Vault – our on-site, secure precious metal storage facility.

Are values guaranteed to increase over time?

As with any investment, there can be no guarantee that gold, silver and platinum prices will increase over time. Although historic price charts can provide some insight into what’s happened in the past, the future is always unpredictable.

Should you opt for gold, silver or platinum?

The rarity of gold and platinum means that they are more expensive to purchase than silver, ensuring that you may appear to get more for your money when buying silver. But the situation is somewhat more complex: purchases of gold in the UK do not currently attract VAT, for instance, whereas silver and platinum purchases do.

Gold prices tend to move more slowly than the price of silver and platinum, with the latter two seen as being more volatile, in part because of their wider use within industry. The best option for your own circumstances is likely to depend upon your attitude to risk and whether you are seeking a long-term investment.

Where will you store your bullion?

If you’re intending to take delivery of your bullion, then you’ll need to consider how it will be stored in a safe and secure manner. This may mean using a safe in your own home, or taking advantage of safety deposit boxes that are offered by banks and other financial institutions.

The Royal Mint, in common with other precious metal providers, are able to offer secure storage facilities, meaning that you need not take physical delivery of your purchase. Our secure facility, known as The Vault, is constructed and secured to the highest standards and is guarded by trained security staff, 24/7.

How much does it cost to store precious metals?

This depends on your chosen storage solution. If you elect to store your investment in a safe, either at home or at a bank, these costs can vary. In terms of storing with The Royal Mint, we offer a transparent pricing structure and a cost-effective storage solution.

What form of bullion should you buy?

Your options essentially consist of coins, bars or digital precious metals. Each of these forms have both advantages and disadvantages, and the choice is very much dependent on the requirements and individual circumstances of the purchaser. With this said, the decision between coins and bars is often dependent on the funds which are available to the buyer; coins tend to be cited as being more suitable for those making a modest outlay while bars offer a more straightforward means of acquiring larger quantities.

Furthermore, some of the other considerations which are often cited are:

1. Resale

When investing in bullion, one of the first questions asked by many is “how do I resell it?”, as if you choose to take delivery of your purchase, at some point you may wish to liquidate it. As bullion coins also have a certain numismatic quality (they may also be desirable to coin collectors for example), they may be easier to sell than bars, as bars tend to be sold for their intrinsic value only. If you choose to store your gold purchase with us in The Vault, you may sell it back to us at any time using the website. Similarly, digital precious metals can be sold back to The Royal Mint whenever you choose, as we are also able to store it on your behalf, meaning that this is an attractive option for many investors.

2. Capital Gains Tax

An important consideration for some investors is Capital Gains Tax (CGT). As all of our current range of bullion coins have legal tender status, they are exempt from UK Capital Gains Tax for UK residents. This applies to gold, silver and platinum coins, but the same exemption does not apply to any bullion bars or digital precious metals.

3. Purchase premium

In terms of the cost, it is usually the case that as the quantity of bullion increases, the purchase premium decreases. Bars are likely to carry a lower premium as you move upwards from 1 g, though the premium for coins tends to be higher. However, due to the lower storage and manufacturing costs, our lowest priced premium product is currently digital precious metals.

4. VAT status

A wide range of bullion products are exempt from VAT and are classed as VAT free for non-VAT registered private individuals. These include all of our gold coins (such as The Sovereign & Britannia) and bars (such as our RMR & Britannia bar ranges). In contrast to this, silver and platinum bullion coins and bars are both sold subject to VAT at the standard rate.