Gold is often seen as the last safehouse for your wealth when other assets are too unreliable. The pound has struggled since the beginning of Brexit talks, with uncertainty about the deal driving prices down and votes to delay helping prices up. Many believe that post-Brexit, the pound will recover as clarity comes to the situation, but some British investors aren’t convinced.
They’re looking toward gold as an alternative to store their wealth. Gold is a great conservative asset. It may not provide dividends as stocks do, but it’s much less risky. It’s also a commonly-used hedge against currency and inflation. When investors get nervous about the US Dollar or their local currency, they may start switching their cash holdings for gold.
Before you start investing in gold bullion, there are a few basics you should understand about it.
Gold Bullion vs. Special Edition Coins
Generally speaking, there are two types of gold coins: special edition coins made primarily for collectors and gold bullion coins that target the investing market first and foremost. Special edition coins have a higher production value and can go for significantly more than spot, especially if they are older and rare. Bullion coins have a less than perfect finish compared to special edition coins, as their condition does not really affect their resale value. Gold content is the main driving factor in the price of bullion coins, and they tend to be closer to the spot price of gold.
Gold bullion coins are ideal for investors who don’t have time to consider the numismatic qualities of each individual coin they buy.
Common Gold Bullion Coins
The most popular gold coin in the UK is the Gold Britannia from the Royal Mint, but there are many options available to you. Some regional markets have marked preferences and it will be easier to sell gold coins of a certain type there. You can also find a wide range of gold coins from around the world at gold dealers like Silvergoldbull.co.uk including international standards like:
- American Gold Eagle Coins, the most popular in the U.S.
- Canadian Gold Maple Leaf Coins, widely used around the world
- Australian Gold Kangaroos, a popular alternative to Chinese Gold Pandas in Asian gold markets
- Austrian Philharmonics, the most popular coin in continental European gold markets
If you’re just beginning as a gold investor, stick to popular coins that will be easier to sell when you’re ready to cash in.
Silver Coins vs. Gold Coins
In the UK, gold bullion is almost always a better investment than silver when it comes to precious metals. In the US, many investors get excited about the growth potential of silver. The metal experiences volatile price changes both up and down. Unfortunately, silver coins in the UK are subject to a 20 percent tax, whereas gold bullion coins are exempt from VAT.
VAT on gold was only lifted in 2000 to make the UK more competitive with EU states that charged no VAT and treated gold like any other investment asset. Now may be the time for British investors to snap up gold, in case VAT on gold makes a comeback post-Brexit.
Use gold as an alternative to currency and stocks. It’s an excellent way to preserve wealth in an age of uncertainty.