The Most Popular Ways You Can Invest in Gold

by Kristopher Samuels Writer

Does the state of the world have you wondering if there is anywhere safe to put your money? There’s a lot to worry about at home and abroad. For UK investors worried about the long-term impacts of Brexit, there’s a high demand for safe haven assets.

One great asset for those who are nervous about upcoming economic troubles is gold. It’s a recession hedge, and as the world gears up for the next downturn, the smart money is against stocks and on gold bullion.

You don’t need to go all-in. A more responsible move is to diversify your portfolio and invest in a basket of assets that will be more responsive to all economic turns. Here are the most common ways investors in the UK buy gold:

#1 Open an Account with Bullion Dealers

You want to own bullion, but you don’t want to buy a safe or have to figure out an alternative storage solution. It’s a smart way to invest for those who want a quick and convenient way to buy gold. You can open an account with a bullion dealer, allowing you to buy gold coins and bars and have them placed directly into allocated storage.

You pay a small premium over spot and you always have the option to take delivery if you decide you want to hold onto it yourself, or sell with another dealer. To learn more about allocated storage, click here and explore your options with gold dealers.

#2 Purchase Bullion Directly from Online Dealers

You can also purchase bullion from dealers and have it delivered. If you do this, consider buying a personal safe to protect against theft. High-quality safes are also fire resistant, starting with around 30 minutes of resistance and going as high as one or two hours.

When you get it shipped, it’s sent discreetly without anything to indicate that the contents are precious metals.

#3 Buy Gold Britannia Coins to Avoid Capital Gains Taxes

There is no VAT on gold bullion in the UK – although that was mostly done so that the Royal Mint could compete with other EU jurisdictions. The asset is treated like any other investment, and that goes for tax implications, too. When you sell gold, you typically have to pay capital gains taxes.

There are some exceptions. You don’t pay Capital Gains on legal British currency, and the Gold Britannia, produced by the Royal Mint with a face value of £100, is considered legal currency, even if its true value is much higher than face value. You enjoy tax-free profits from investing in Gold Britannia coins.

#4 Gold Exchange-Traded Funds

Another option is investing in ETFs if you don’t mind not owning the bullion directly. In an ETF, you invest in a fund that owns and trades bullion. Many gold owners prefer direct control and ownership over their bullion and eschew ETFs. Be aware that while some ETFs invest in the metal itself, others invest in gold streaming and mining companies, and their values do not always track bullion prices.

Consider these four options for adding gold into your portfolio and which one was is best for you.