Gold - physical, tangible gold – is an asset that resonates deep in the human psyche. Ironically, given it is the solidity of physical bullion that is the source of its appeal, the whole notion of gold bars and coins as “gold you can hold” has assumed almost mythic proportions.
Something similar could be said for the finest gemstones, diamonds in particular, but there is a very big difference. No two precious stones are exactly alike, there is no ‘standard’. By contrast, gold bars and coins are produced to an identical weight and quality, like the “London good delivery bar”, which has to consist of at least 995 parts per 1,000 fine gold. The standard is guaranteed, and this means the buyer can purchase with confidence.
Gold can also be sold back into the market with equal confidence. While there is no guarantee of getting back precisely what was paid, the pricing of gold is a model of transparency, with prices published daily in newspapers and on news websites.
Furthermore, there is a competitive market in both the sale and purchase of gold. If you don’t like one price, you can always try somewhere else.
The Ultimate Store of Value and Wealth
Gold bullion is the ultimate store of value for both digital and physical buyers, but for the latter group gold is also the ultimate in liquidity, able to be transported at a moment’s notice and acceptable anywhere in the world. Here is a world currency that needs no clearing system or credit-card readers. Physical gold combines security with portability.
As to the choice between gold bars and coins, there ought to be no great difference in price, although larger bars tend to be better value than smaller ones. Commemorative coins will, however, cost more, reflecting the craftsmanship involved.
Buying gold coins in the UK has an edge in terms of tax advantage. For example, all of The Royal Mints coins are exempt from UK Capital Gains Tax (CGT) for UK residents only, due to being legal tender.
The Royal Mint’s gold coins, such as The Sovereign & Britannia are also VAT free for non VAT registered private individuals.
The Enhanced Appeal of Gold
If we emerged from a period of turbulence in which banks had collapsed and governments had seemed almost overwhelmed by events, it would be unsurprising that physical gold would retain and enhance its appeal.
There is also something about holding bullion in the hand that has universal appeal. Centuries after the invention of paper money, decades into the reign of plastic cards and a new era of contactless payments, the touch and feel of gold retains its enduring appeal.