The popularity of gold and silver bullion has been steadily growing in recent years, and with the current economic climate it is hardly surprising. Investors want to be sure that their wealth is protected, and history has shown that gold bullion can be a true safe haven when it comes to safeguarding money for the future. Precious metals have been a significant aspect of the investment market for centuries, and wise investors have long since discovered the benefits of a balanced investment portfolio. As we know, gold is an incredibly low risk asset, due to its having no counter party risk and its ability to maintain a strong price over time. But what is the best way to invest in bullion?
Of course, each individual investor has specific needs depending on their own personal circumstances, but there are certain guidelines that all investors can follow in order to make the most out of their bullion investments. By asking yourself a few simple questions, you can choose the route that will suit you best and allow you to maximise your returns. Begin by asking yourself the following three questions:
Once you have taken time to consider the answers to these questions, you will be in a strong position to take your first steps towards becoming a bullion investor. Then all you need to do is to simply follow our guide to a successful investment process.
There are several steps that you must take before you proceed with your bullion purchase. These will ensure that you make the right decision when it comes to choosing your investment, as well as making your bullion safe and secure. The most vital of these steps is making sure that you have the means to securely store your bullion. If you wish to store it at home, this will require you to have both a safe and the necessary home insurance. If you wish to store your bullion in a safe deposit box or a high security vault, you must consider this and make sure that your supplier can arrange it for you.
It is also vital to do some research before you proceed to your purchase. You should research the supplier whom you are intending to buy from, as well as the different bullion brands and types of bullion. A common dilemma is whether to buy bullion coins or bullion bars, but this needn’t be a complex choice. If you are new to the bullion market and wish to invest a small amount, buying bullion coins is a good way to begin investing. Coins are easier to store and can be sold individually, making them a more flexible choice. Bars, on the other hand, are a better choice for those wishing to invest larger amounts, as they can offer lower premiums if bought in large volumes.
When it comes to the different bullion brands, it’s important to read up on their histories and refinement methods. At London Gold Bullion, we offer gold from a variety of global brands, including Metalor, Sempsa, Heimerle Meule and PAMP. Some brands offer gold of a higher fineness grade than others, which will be priced higher due to its higher gold content. If you have a preference for gold from a particular country, this may also influence your decision. All in all, there is no right answer to these questions, as each is dependent on your individual preferences and situation. It is important to take your time in this stage, though, and not to rush your purchase, as you may later discover that you could have made a more suitable investment.
Once you are ready to buy your bullion, you must wait for the right time to do so. It is tempting to rush straight in and buy, but you must avoid this. Buying at the wrong time may result in you paying a higher price for your bullion, which could affect your returns when you come to sell it. This is particularly important if you are buying silver bullion, as the market in this instance is notoriously volatile. It is wise to watch trends in the market and read the latest bullion news. This will give you a strong idea of which way the prices are heading, and allow you to buy when they are lower.
When you feel the time is right, and you have prepared for storing your bullion, you should proceed with your purchase. Buying bullion online is an incredibly simple process, as all you need to do is add your selected items to your basket and proceed to the checkout. Remember that when you purchase gold bullion in the UK, you do not pay VAT or stamp duty, which makes the purchasing process simpler and quicker. How you pay for your bullion is up to you, as we accept credit and debit card payments, bank transfers and PayPal.
Once you have completed your purchase, you will either be awaiting the delivery of your gold or confirming arrangements to have it stored at a high security vault or safe deposit box. If you are going to store your gold at home or another secure location, it will be shipped to you via safe, fully insured delivery.
At London Gold Bullion we only use the most reputable couriers, so you can rest assured that your parcel will arrive securely. It is then your responsibility to secure your bullion and to maintain this security over time. You should also continue to watch the bullion market in case an opportunity arises and you wish to sell your bullion.
When compiling your investment portfolio, it is important to remember that you are advised to hold between 5% and 15% of you assets in bullion. This will allow you to safeguard your wealth in case of personal or financial crisis. It is also advisable to invest in both gold and silver bullion, in order to take full advantage of the bullion market.
Investing in gold provides you with a steady buffer, while investing in silver can allow you to make substantial gains on your investments. For this reason, it is often suggested that investors should hold both gold and silver bullion in their investment portfolio, in a gold to silver ratio of 2:1.
Recent developments in the global bullion market have seen an increase in the number of investors turning towards platinum bullion, in order to grow their existing portfolios. A lesser known form of investment, with a different set of mitigating factors, platinum bullion is a fine choice for investors who have some experience of the bullion market. Because it is in fact much rarer than gold, and is also used a great deal more in industry and manufacture, platinum has a more limited range of options for investment. Nevertheless, it has been growing in popularity due in part to its decline in price in recent years. But why should you buy platinum bullion? Read our tips below to find out.
Contrary to what many people believe, platinum is actually much rarer than gold. The annual gold mining yield is around 25 times higher than that of platinum, which makes this white sheened metal all the more valuable. In addition to less platinum being mined, the amount available for investment is significantly decreased by the demand for it in industry and manufacture. Platinum is used in car parts, computers, appliances and other electricals. It is also the most valued and sought after metal in the jewellery market.
The high demand for platinum in other markets means that, for investors, a piece of platinum bullion is very special. The only country to ever have used platinum in its currency is Russia, which also happens to be the only country to have stockpiled platinum bars. The number of national mints making platinum coins has steadily increased in recent years, but there is still a limited range of choice compared to gold and silver. Although some might see this as a disadvantage, it actually works in the favour of many investors, who benefit from owning a metal that is so rare and so in demand.
Although platinum is far closer in price to gold, in terms of volatility it can behave much more like silver. Whereas the fluctuations of the gold price are relatively small from week to week, the fluctuations of platinum can be quite dramatic, which allows experienced investors to take advantage of favourable prices. This makes platinum the ideal choice for those who have previously bought and sold silver on the market, and now wish to experience the platinum market in a similar way.
Of course, the factors affecting the platinum price are different to those affecting the silver price, so this is a much more complex market to navigate. In addition to the usual factors of economic and political uncertainty, the platinum price can also be affected by the demands of various industries, particular the automotive and computing sectors. This is something that investors should take into account when planning their purchases and sales, in order to get the most out of the growing platinum bullion market.
Palladium investment may seem like a niche area of the bullion market, but in fact an increasing number of bullion investors are turning to this highly rare metal at a time when other investment vehicles are becoming more and more uncertain. Owning physical palladium in the form of bars and coins is a more secure investment for the same reasons that owning physical gold, silver or platinum is: it is free from counterparty risk and so cannot be lost during an economic downturn. Just as with platinum bullion, though, palladium is affected by additional factors such as the demands of various industries. Read on below to find out why investing in palladium could be beneficial to your investment portfolio.
Palladium is part of the platinum family, and as such is structurally and aesthetically very close to platinum. Due to this, it is often mistaken for platinum by the untrained eye, even though it is often much cheaper than platinum. The reason for this is that is it far less dense, and so cannot be manipulated as much without breaking. Still, palladium is very popular in the same industries that platinum is, especially the jewellery sector where it is alloyed with gold to make white gold.
Both palladium and platinum are mined mainly in South Africa, Russia and the US, and both are highly in demand in the automotive and technology industries. This affects their price and makes them much more volatile than gold, and sometimes even more volatile than silver. Palladium is the rarest of the four investment metals, and it is said that all of the palladium ever mined could fit into a small living room. This may well be one of the reasons that demand for palladium is rising, as many investors are keen to purchase the rarest metals on the market.
As palladium is extremely rare, the variety of palladium bullion bars and coins available is very limited compared to gold and silver. This is not necessarily a problem when purchasing, but it does mean that liquidity is poorer for those wishing to sell. Despite this issue, palladium is gaining prominence in the market due to its impressive price rise in the first quarter of 2017, when it surged upwards more than any other precious metal. This has drawn the attention of many investors, as prices have been relatively low in recent years.
Palladium is likely to become a much stronger contender in the bullion market, due to its growing availability and recent volatility. Palladium bullion coins are growing in popularity, which means that more mints are likely to make them, and a number of suppliers have introduced new ranges of palladium bars. As demand increases, prices are likely to continue to rise in line with the growth of the bullion market in general. Palladium offers a lower cost way to enter the bullion market and benefit from the volatility of the platinum group metals.