There are so many assets to consider when making a financial investment. The question for many people is ‘why choose gold over anything else?’ The answer lies in the fact that gold has proved to be a long-term, dependable store of value.
- What are the Benefits of Owning Gold?
- Types of Gold Investment
- The Allure of Gold
Treasured through Time
Gold has been prized and treasured for thousands of years. People have bought gold objects for centuries and money has been made from gold in the form of coins. The value of gold lies in the precious metal itself and does not rely on someone else’s promise to pay as with banknotes, share certificates or government bonds.
What are the Benefits of Owning Gold?
Gold is portable, particularly for those who buy bullion coins. This has made it popular over the centuries with those who like to keep their wealth close to hand.
As an asset, gold is highly transferable. With no need for PIN codes or form filling, bullion can be moved from one person to the next with minimum fuss.
Gold is the original global currency. It has value anywhere in the world and can be exchanged amongst people from different countries and societies with minimum formality and no foreign currency costs or transaction fees.
Bars and coins made from gold are produced to specified weights and a specified quality. With a guaranteed standard, it means buyers can purchase gold bars and coins with confidence.
Transparent Price, Open Market
Gold can be sold back into the market with equal confidence. Whilst there is no guarantee of getting back precisely what was paid, the pricing of gold is transparent, with prices published daily in newspapers and on websites.
There is a competitive market in both the sale and purchase of gold. If you don’t want to pay one price, you can always try somewhere else.
Types of Gold Investment
Investors can choose to invest in physical gold in the form of coins or bars, or they can invest in gold digitally, buying virtual slices of a gold bar, for example.
The world’s most well-known bullion coins are The Sovereign and Britannia (made in the United Kingdom), the Eagle (United States), the Maple (Canada) and the Krugerrand (South Africa).
Struck in 22 carat gold, The Sovereign bullion coin is one of the world’s most celebrated gold coins and has an extraordinary history spanning more than 500 years. Free of Value Added Tax (VAT), British gold Sovereigns and gold Britannia coins are exempt from Capital Gains Tax (CGT), due to their legal tender status in the UK.
Coins and bars differ in price but only according to the weight and purity of the gold. It is worth noting that larger bars tend to be better value than smaller ones. Commemorative gold coins cost more due to the level of craftsmanship involved in their production.
Many people saving for their retirement choose to invest in gold through their pension. The World Gold Council suggests putting around 2–10% of a portfolio into a safe haven investment such as gold.
The Allure of Gold
In the digital age, new ways of owning and investing in gold have been introduced to the market that allow investors to see the value of their investments at their fingertips. Today, investors are also able to buy and sell assets with ease. Some find the idea of being able to physically hold their gold bullion attractive, even if it is vaulted outside of their home. Centuries after the invention of paper money, and decades into the reign of plastic credit cards and contactless payments, gold retains its allure.