How to Invest in Gold Bullion? 

Gold has always been a renowned safe haven for an investor’s wealth, and an important part of any portfolio.  It is the ultimate protection against floundering economies and is the perfect insurance to diversify your investments.

Time has shown that gold is an asset that is not only excellent at preserving and protecting wealth but growing it too.  The continued high demand for gold ensures the price stays high and continues to rise, outperforming most other forms of investment in the long term.

Gold has always been particularly popular in times of financial crisis, like the crash of 2008, and continues to be to this day during the Covid-19 pandemic.  It is the rock bed that investors can rely on when confidence in banks and financial institutions waver.

With low-interest rates and inflation fears the central bank’s response to the recent crisis has been to print more money, and raising public debt to peacetime all-time highs.

Gold, throughout this, has remained steady.  In fact, it has soared with August 2020 seeing the price of gold reached a new all-time high.

With the demand for gold growing and its status as the ideal insurance and hedge against turbulent economies, prices could soar further in the coming years to new all-time highs.

In the UK in particular, investors are turning more and more to gold.  The changes brought on by Brexit and the continued cost of the pandemic are hindering the UK’s economic recovery after one of the worst recessions in history.

With the continued devaluation of our money sitting in banks, it is no wonder that more investors are looking to gold as a means of securing their wealth for the future.

Disclaimer: This is not financial advice.

Demand for gold – Worldwide demand hits new heights

Demand is another important factor to consider.  The world’s central banks are all increasing their gold reserves, and the demand, in general, is increasing around the world.  It is believed that the value of gold will remain high, and continue to grow for many more years.

The World Gold Council released figures showing that demand for gold and silver has increased year on year.  This increased demand is from investors and for industrial uses.

For individuals, in many instances, it is about preserving and protecting wealth while diversifying their portfolios.

In industry, gold and silver are being used more and more in electric cars, solar panels, and smartphones.

This demand growth is particularly prevalent in China and India, as well as across Europe in Germany, France, Switzerland, and Turkey.

Conclusion

The commonly believed myth in the UK that you need to be wealthy to buy gold needs to be dispelled.  In countries all around the world individual investors, no matter their socio-economic demographic, are investing in gold.

This, coupled with the increased demand from central banks and industry, means that the value of gold will remain strong, and will continue to be a good investment.

Our advice is always to have between 5% and 10% of your portfolio be gold bullion, whether you’re a multi-millionaire or the average investor.  Gold continues to be the ultimate safeguard against turbulent economies.

Disclaimer: This is not financial advice.

Why buy gold?

In a world where economic uncertainty seems to be an ever-increasing occurrence, investors are looking for low-risk investments that protect their money as much as grow it.  Their research often leads them to gold as the solution to that very problem.

They’re right!  But, new investors still can’t help but ask, “Why buy gold?”

Since the 2008 crash, the banking systems have seen irreparable damage to their reputation and, understandably, people have become more and more cautious about trusting their money with banking institutions.  If they lost it once, maybe they could lose it again.

The global economy had only just managed to feel a sense of recovery from this crash before suffering a shock once again with the outbreak of the Covid-19 pandemic.

Governments were forced to print unprecedented amounts of money in order to save stock markets and keep their economies afloat.

We are seeing interest rates at record lows, inflation is set to rise, living costs continue to rise while wage growth has slowed and unemployment has increased.  This all serves to fuel instability and cause people to lose faith in the places they keep their money.

Throughout all of this, gold bullion has managed to stay strong and maintain a high value.  Why?  Because it is the ultimate insurance investment in protecting your wealth and should be a key part of every investor’s portfolio.

Let’s break down some of the main reasons buying gold is a great investment.

The ultimate insurance

It is widely considered that owning gold is the best insurance for your wealth against difficult times.  It has been the safest method of investing your money for centuries, and even with the advancement in technology and the increasingly connected world we live in, gold remains the safest bet.

Gold bullion will always have value.  This fact alone means gold offers as much certainty as you can get for the protection of your wealth.

Buying gold is an effective way of hedging your portfolio against other investments as its price tends to soar when other markets, such as stock and property, are floundering.

The price of gold also tends to rise in line with inflation, making it an excellent insurance against economic factors such as interest rates, currency fluctuations, and of course inflation and deflation.

Gold is also an international commodity and a precious metal, meaning you can go anywhere in the world and it will have value.  A high value at that as every country in the world recognises it as a luxury.  And gold bars and coins are very easy to transport.

There is never really a bad time to own gold.  As a physical and timeless asset that is immune to devaluation in the way that money is by governments freely printing more.

In the unlikely event that the entire banking system failed, your gold bullion, particularly in smaller units like coins, will still have value and be tradeable for goods.

Why invest in gold?

There are so many options for what to invest your hard-earned money in, why would you choose gold?

For almost as long as records have been kept Gold has been considered precious to humans.  Throughout history, from ancient Egyptians to Roman conquerors, from Conquistadors to the modern age, we have been fascinated with gold and searched it out the world over.

The gold market often stands on its own.  When the global economy is in crisis, the gold market tends to stay steady (or even get stronger!)

For example, during the crash of 2008/2009 gold remained strong, and in the subsequent years while world economies were struggling to recover gold made significant gains.

Gold remains strong during rising inflation too, so while the money in your bank loses value many investors look to gold as a safer asset to protect and grow your wealth.

Gold is a finite resource whereas governments can decide to print extra money at any time for quantitative easing.  This, coupled with its continued use in emerging markets and the technology industry means that the price will more than likely stay strong.

Buying and owning physical gold gives you control over your investment.  There is no third-party risk like investing in stocks or even investing in gold ETFs.

Selling is also easy as there is always demand, so pulling your cash out of your gold is never a problem.  There are plenty of reputable online dealers that deal with millions of pounds of gold sales each week and can offer you immediate prices online.

Why invest in gold?

There are so many options for what to invest your hard-earned money in, why would you choose gold?

For almost as long as records have been kept Gold has been considered precious to humans.  Throughout history, from ancient Egyptians to Roman conquerors, from Conquistadors to the modern age, we have been fascinated with gold and searched it out the world over.

The gold market often stands on its own.  When the global economy is in crisis, the gold market tends to stay steady (or even get stronger!)

For example, during the crash of 2008/2009 gold remained strong, and in the subsequent years while world economies were struggling to recover gold made significant gains.

Gold remains strong during rising inflation too, so while the money in your bank loses value many investors look to gold as a safer asset to protect and grow your wealth.

Gold is a finite resource whereas governments can decide to print extra money at any time for quantitative easing.  This, coupled with its continued use in emerging markets and the technology industry means that the price will more than likely stay strong.

Buying and owning physical gold gives you control over your investment.  There is no third-party risk like investing in stocks or even investing in gold ETFs.

Selling is also easy as there is always demand, so pulling your cash out of your gold is never a problem.  There are plenty of reputable online dealers that deal with millions of pounds of gold sales each week and can offer you immediate prices online.

Is it worth investing in gold?

In order for your investment in gold to yield a profit, you rely on an increase in the value on the open market, as opposed to property and stocks that can provide a yearly yield.

To realise this profit can take time. But historically gold has been in an upward trend and has performed very well for investors since the 1970s.

While there may be dips, the overall upward trend is expected to continue making gold a very good investment.

Watch the gold price

Picking the right time to buy gold is a matter of keeping a close eye on the price and picking the opportune moment.

Gold prices change every two minutes, and it is very easy these days to keep track of it on your PC, phone, or tablet.   You have never had more information at your fingertips in order to choose the best moment for you to invest.

While the market feels like it is constantly moving up, it’s not uncommon for the price to drop by 3-5% in one morning.  For many investors, this would pose an opportunity to invest, and for new investors, it might be a great moment to take your first plunge.

Finding the right time to invest is down to the individual investor and the market state that they are most comfortable with.  Some prefer to invest when the market dips, others prefer to invest when during more stable periods, or even in the middle of very strong periods.

Whatever your preference, you should only buy gold when you feel comfortable with the price.

Disclaimer: This is not financial advice.

The security blanket of gold

Investing in gold bullion should be considered a long-term investment and is about owning a safe and secure asset.  It’s not about making quick profits by buying and selling in the short term.

Of course, if you do buy at the right time and you catch a big move up making some great profits then by all means take that profit out.  Plenty of people have and will continue to make large gains from gold.

Investing in gold, however, is ultimately about safeguarding your wealth and protecting yourself in the event of a financial crisis by having at least a portion of it in a safe asset that you physically hold, rather than leaving it in banks or ETFs.

We live by the saying “if you don’t hold it, you don’t own it”.  We understand this can’t apply to all your assets, and in this day and age it wouldn’t make sense to, but, holding a good portion of your wealth in gold DOES make a lot of sense.

And as for profits?  Historical data shows that gold is more likely to make you a better return on investment than any other asset or commodity over the last decade.

Disclaimer: This is not financial advice.

Why buy Royal Mint bullion coins?

Royal mint bullion coins make the ideal investment for a wealthy British investor intending to spend more than £50,000 or more.  Why?

Royal mint bullion coins are British legal tender and because of this are capital gains tax-free.  This means they offer opportunities for high-wealth investors to save on their CTG and maximise profits.

This capital gains exemption applies to Britannias and Sovereign coins as well as special series coins like the Queen’s Beast and Lunar collections.

Add to this the fact that gold is also VAT exempt then making Royal Mint bullion coins one of your primary gold purchases can be a very cost-effective investment.

Gold:

Gold bullion is considered old-fashioned when compared with bitcoin or other cryptocurrencies, but it is still the ideal investment to store and protect your wealth.

Yes, gold bars aren’t easy to carry around with you, and you can’t walk into a shop and buy your groceries with some gold.  But it is an investment resource and a bit of a collectible, and when it comes to your money, old-fashioned is no bad thing.

Gold is seen as a safe haven for your wealth, and rightly so.  Gold is a physical asset that you can hold and access that has a true value.  The value of gold also tends to increase in line with inflation, which is currently between 2.5% and 3%.

At the moment, with the Bank of England’s interest rates and the US Federal Reserve both being limited, we currently have a negative real interest rate.

What does this mean?  It means that inflation rates are growing faster than interest rates and so our fiat currency, whether pound, euro, or dollar is devaluing as the cost of living is increasing.

So leaving your money in the bank is actually costing you money.

Buying gold bullion is the ideal solution to this.  As we’ve said, it matches inflation, is a trusted commodity, it retains its value, and there will always be buyers.

Gold is unarguably less exciting than stocks or cryptocurrencies, and far less headline-grabbing.   And when those markets push higher and higher they can generate fortunes for the savvy investors (or the lucky amateur).  But, when the market comes crashing back down again, as it always does, it’s silver and gold that investors turn back to.

Disclaimer: This is not financial advice.

Portfolio diversification

Investing in and owning physical silver bars and coins is a great way of diversifying an investor’s portfolio.  It helps spread the risk within the portfolio and gives an extra layer of protection against other investments.

It is widely agreed that silver is likely to strengthen over time, and while the price is currently low compared to the highs of 2011, it is a very solid investment.

In particular, silver is very widely used in industry as it is an incredible electrical conductor.  So, despite it being a precious metal, silver is being used extensively in electric cars, solar panels, and computers.

Easy to exchange

Many individuals and investors are turning to silver as an alternative form of currency too as a protection against the possibility that money will lose much of its value.  This is only growing more prevalent in the current uncertain world economic climate.

That’s not to say that fiat currency (your pound coins and notes) are likely to be scrapped and the economy collapses entirely, but British bullion coins are legal tender with a face value, and as an investment against any eventuality it makes a lot of sense.

In the event of complete economic collapse silver offers the ideal currency for small everyday items rather than gold, which is worth about 80 times more than silver, which would be more suited to larger purchases.

Disclaimer: This is not financial advice.