Buying gold bullion and gold coins is simple at London Gold Bullion. All you need to do is decide on how much you'd like to invest, and then take a look at our selection of gold bullion and gold coins. Whether you are looking to spend £200 or £200,000, there's something here to suit your budget. You may also wish to take a look at our live gold price chart, to give you an idea of recent trends in gold prices.
When you know how much you would like to invest, you can browse our range of gold bullion bars and coins to find out which options would suit you best. You’ll see that we offer bullion bars from a range of refineries and at a variety of prices. Whichever you choose is up to you, as the difference between the brands mainly comes down to the country of origin and, occasionally, the purity of the gold.
The differences between the various bullion coins are slightly more marked, for a number of reasons. Some coins are much older than the rest, like the classic sovereign, and hence have a more limited supply and historical resonance which make them sought after by collectors and investors worldwide. While other gold coins have a particular design that interests buyers, cherished for their artistry, these can have a value that goes beyond their gold content. Before deciding on a particular piece of bullion, it’s wise to do some research on each brand; so that you make the best possible decision for you.
Once you have chosen a piece of bullion, simply select it and proceed to the checkout, where you can pay by debit card, credit card, bank transfer or PayPal. All of our payment methods are secure, and we run additional fraud checks to guarantee complete safety. If you wish to have your bullion delivered, your purchase will be dispatched on the next working day and delivered to you via commercial courier.
We offer free UK delivery, and all of our delivery methods are secure, insured and discreet. If you wish to buy gold bullion but do not have the means to store it securely, we offer a service that allows you to keep it safe in one of our own insured, high-security vaults at the Sheffield Assay Office. This option is available at the checkout. You can also purchase a safe from our hand-picked, approved collection.
Buying gold bullion is an excellent way to invest in your future, allowing you to safeguard your wealth even in economic crises. Unlike many forms of investment, gold bullion carries no counterparty risk and is considered by many to be a low-risk option. As with any form of investment, there are no guarantees, but investing in gold bullion in the long term has been shown to be a robust investment and something of a safe haven when compared to other investments.
By purchasing gold bullion, you become the sole owner of a valuable physical asset, for which there is a huge demand and which you may sell at any time. Owning gold bullion is more than just having a piece of paper; it is about having a physical object in your possession, which you can sell whenever you choose.
It is the latter which makes gold bullion so different to so many other investments, as you have control over your investment at all times. Moreover, as gold tends to maintain its average value over time and has done for hundreds of years, investing in gold bullion is deemed to be a very low-risk venture and a reliable investment.
It is advisable that investors keep between 5% and 15% of their assets in gold and silver bullion, in order to hedge against the risk of other investments and ensure that their wealth is safeguarded, as much as possible. It is often recommended that investors maintain a gold to silver ratio of 2:1. Gold bullion is the perfect choice for pension investors, who may wish to safeguard their pension portfolio with some additional low-risk investments.
Gold bullion makes an excellent investment, allowing you to safeguard your wealth for the future. The price of gold is known to maintain an average value over time, rising and falling, but essentially returning to an average state. So even at times of economic crisis, you can be much more confident that your investment will remain steadfast, holding its value when other investments are losing theirs.
Historically, gold’s performance over time shows it to be a secure long-term investment, making it a robust addition to your investment portfolio. From the depression of the early 20th Century to the banking crisis of 2008, gold has remained the investment in which people have confidence. So, investing in gold is a way of knowing that your money is safe, even when an economic crisis hits. In fact, gold is ideal for your pension portfolio, as it can be used to hedge against the risk of other investments.
Moreover, gold is a valuable physical asset. Gold is a material in huge demand for a range of contemporary industrial and technological processes, utilised as it is in the electrical, space and medical industries. So not only is gold a material treasured throughout history, but it is a substance with an existing and substantial demand. It’s also a precious material with a finite resource, so invest in it while you still can, gold is rare and it is becoming rarer with each moment that passes.
As we know from recent financial events, our money is not always safe with banks, companies or other forms of private investments, but with gold, this is not the case, as it is an asset wholly in your hands. Gold carries no third party risk; you’ll have complete control of your investment at all times and can liquefy it whenever you choose. Moreover, Gold bars and coins come in a huge range of weights and sizes, appropriate for investment portfolios of all size. So gold is an extremely flexible and convenient investment, which you can turn back into to cash whenever you want to.
The choice of whether to invest in gold coins or gold bars is, of course, a key part of the investment process, and the outcome is dependent on the individual needs and situation of each investor. For first time investors who only wish to invest a small amount in gold bullion, buying gold bullion coins may well be the best choice. In this case, stick to official national mint coins, such as the Gold Britannia, the American Gold Eagle, the Canadian Gold Maple Leaf or the Chinese Gold Panda.
These coins tend to be sold at a value that is based largely on their gold content, unlike historical numismatic coins, which can carry an additional value based on their rarity, condition or beauty. Numismatic coins can be sold on for a profit, but only experienced collectors who have a thorough knowledge of gold bullion coins should undertake this venture. First-time buyers are strongly advised to limit the complexity of their purchase by sticking to world-renowned bullion coins, recognised for their quality and purity.
For investors who wish to invest a larger amount, gold bullion bars are an excellent choice. They offer lower premiums when priced per gram, and are available in a broad range of weights, from 1g to over 5kg. When buying gold bullion bars, investors should always consider how they will store their bullion, as home insurance does not always cover such high-value goods. Gold bars should be stored securely in an appropriate safe, vault, bank safe deposit box or a certified or LBMA approved facility.
The gold bullion bars that you choose will depend on a variety of factors, including the level of investment you wish to make and whether you have a particular interest in the gold of a specific country or refinery. Once you have decided on how much you wish to invest, you will be able to see the range of gold bullion bars that are available to you. For investments under £200, 5g bars are most suitable, whereas, for more weighty investments of over £20,000, 1kg bars are available.
When deciding which brand to purchase, it is wise to research each one and consider which appeals most to you. Each refinery uses different purification techniques, has different partnerships and a different history and reputation, which makes it a very personal choice for each investor. If you are in doubt about which gold bullion bars are right for you, please do not hesitate to contact us and we do our utmost to assist you.
When purchasing gold coins, investors should consider whether they wish to buy more contemporary bullion coins or historical numismatic coins and whether they have the knowledge and experience necessary to do the latter. Numismatic coins can be of high value, due to their rarity, condition and beauty, and can provide a way to profit from the gold market, if you have the required experience. Investors with the appropriate expertise, could buy a numismatic coin at a relatively low price and sell it on to the right buyer at a higher price, by watching the market and seeking out collectors – but it takes great skill and knowledge to achieve this.
For those without this experience, it is best to purchase standard gold bullion coins, which are made by national mints around the world, examples of which include the Britannia, the Canadian Maple Leaf, the American Eagle and the Krugerrand. When choosing your coin, consider the purity of the gold, the design you value or appeal to you and whether you wish to buy something of historical significance. It is wise to research the different gold bullion coins available before deciding on your purchase so that you can make an informed decision.
Gold bullion should be purchased only from an authorised supplier that has direct links with gold refineries. Whether purchasing from a national mint or a bullion merchant, you should always research the provider before buying to ensure that their products are authentic and authorised. All official suppliers will state their certified status on their website, but should you have any doubts, contact them directly.
Speaking to your supplier will give you an idea of their reputability, and will also help you to choose the right products for your investment needs. At London Gold Bullion, we are a fully authorised supplier and are happy to respond to customer enquiries by telephone or email. We highly recommend that you take the time to get to know your supplier before making a purchase, so they can help to guide you through the buying and selling processes.
Buying gold bullion and coins online is now one of the most popular ways to invest, as it provides investors with a large variety of choice and a secure, insured means of delivery. Online suppliers can offer first-time investors some of the best possible prices and products, along with the ease of buying online. There is also a wealth of information available online, of which investors should take advantage.
Despite these clear advantages, when buying gold bullion online, you should also exercise caution and only purchase from authorised suppliers. Remember that if a price looks too good to be true, it probably is. If you have any concerns about buying bullion online, please do not hesitate to contact us and we will guide you through the process. Always aim to contact your supplier before buying, to ensure that their reputation and knowledge is of the highest standard.
The advantages of buying gold bullion online include access to a wide range of brands, a variety of storage options and fast, insured delivery. Some suppliers, including London Gold Bullion, even offer free (and insured) delivery. This means that you can be assured that your gold is in safe hands throughout the purchasing, delivery and storage processes.
If you are buying gold bullion or bullion coins for the first time, there are several things you should be aware of before you make your purchase. The first of these is the reputation of the supplier from whom you are buying. You should always purchase from an authorised gold bullion supplier with direct links to gold refineries and national mints. Authorised suppliers will state this on their website, as we have done, but if you are in any doubt, you should contact them by telephone.
Secondly, you should look at the brand in which you wish to invest. Many gold refineries around the world produce their own branded gold bullion, and a variety of these are usually available from suppliers. Before selecting a brand, it is wise to research the ones that you are interested in, to find out more about their history and refinement methods. Investors should always purchase gold made by well-known, reputable brands with an established name in the bullion market.
Finally, when purchasing gold bullion, you should always consider the fineness of the gold you are buying. In the market, the fineness of gold is usually measured in parts per thousand, meaning that .999 fine gold has 999 parts of gold to every thousand parts. The minimum fineness grade for investment bullion is .995, so investors should always bear this in mind when making a purchase.
Thanks to online gold bullion suppliers, the gold bullion market is now available to a broad range of potential investors. Providing that you have the necessary funds, a sufficient means of storing gold bullion and a sound understanding of the gold bullion market, there is no reason why you should not buy gold bullion. This is a significant advancement for both the bullion market and personal investment.
In the past, gold bullion has been a market reserved for those with access to central banks and large sums, but this is no longer the case. Online bullion suppliers aim to open up the market to all potential investors, in order to give them the opportunity to purchase high-quality fine gold from a range of refineries around the world. All you need to do is ensure that you know how the market works before you begin investing.
Gold bullion is an investment safe haven for a great many people, with investment portfolios of all sizes. Whether you are looking to build a pension portfolio, have recently had a bonus at work or are starting a family, gold bullion can be a great choice for a long term investment. For more information about buying bullion, please do not hesitate to contact us.
There are a variety of payment methods you can use to buy gold bullion, which may be different depending on which supplier you use. We offer a wide range of payment options, including credit cards, debit cards, bank transfers and PayPal.
You can pay online instantly with a debit or credit card, for purchases of any amount. We accept Visa, Visa Debit, Visa Electron, Maestro, Mastercard, MasterCard Debit and Delta cards. There is no additional charge for using your debit card, though credit cards are subject to a 2.5% surcharge, which will be applied at the checkout. We also welcome payments by bank transfer either via online banking, telephone or in-branch transfers to our bank account.
Once you confirm your order, you will receive a confirmation email with your order number and our payment details so you can complete the transaction. You will then be able to pay immediately, quoting your order number. If you do not make a payment by the end of the next working day, your order may be cancelled. If we receive your funds by 2 pm, your order will be dispatched on the same day.
We are also happy to process payments through PayPal, which is a fast, secure way to pay. Purchases of any amount can be made through PayPal, although we advise that this is always done through a PayPal account that can be tracked and managed. If you have any questions about our payment options, please do not hesitate to contact us.
You can sell your gold online, providing that you always sell to a trusted, reputed supplier. Selling gold bullion online has never been easier, thanks to a combination of Live Gold Price Charts, secure, insured delivery and our promise to buy back gold bullion at 100% of the spot price. Before selling your gold bullion online, you should research different suppliers to ensure that you find the best price for your gold.
Before you send your gold to any supplier, make sure that you have spoken with them over the phone about the process and that you fully trust them. Always send your bullion by insured, recorded, safe delivery, and retain your delivery receipts in case of loss or damage. If you have any queries or worries about selling your gold online, please do not hesitate to contact us and we will be happy to talk you through the process.
As the gold bullion market is relatively steady and non-volatile, investors can be sure of a good gold price at almost any time, providing that there are no ongoing economic issues. Fluctuations in the gold market are much less marked than those in the silver market for example.
Despite this, gold prices are known to rise during and after economic crises and times of political instability, so investors should ensure that they buy before such an event. By purchasing at a time of economic stability, rather than waiting for an impending crash, investors are more likely to obtain the best possible prices and avoid the rush for gold bullion that often leads to increased prices and less profitable deals.
For first time investors who are inexperienced with the gold bullion market, it is always wise to seek advice before buying gold bullion. For more information on gold prices, and to track current and historical gold prices, see our gold price charts.
If you are worried about the authenticity of gold bullion bars you should have it evaluated by a professional. Assay offices are official locations where precious metals can be tested and hallmarked for authenticity, and there are only four of these in the UK; in Sheffield, Birmingham, London and Edinburgh.
Check to see if your gold bar carries the hallmark of one of these assay houses. If it does, it is more likely to be authentic. When testing gold bullion bars for authenticity, professional assayers firstly scan it using a special machine.
This measures the colour and texture of the bullion bar, and analyses the different particles that are present on its surface. The machine then calculates the percentage of gold in the bar and concludes as to whether it is genuine or not. This is a highly accurate technique, but it should only ever be attempted by a professional.
The weight of a gold bar varies widely, from as little as 1g with a range of options available right up to 12.5kg. The weight of the bar you buy will largely depend on how much you wish to invest and how much you have already invested, as well as the current gold price.
When considering what size of gold bar to buy, remember that larger bars often carry lower premiums and can offer a better deal when priced per gram, than buying many smaller bars. However, buying smaller bars can prove more flexible, as you can take advantage of more than one gold price over time and have greater choice when it comes to liquefying your investment.
In addition to this, smaller bars are attainable and make a great first step on the investment ladder, making them the preferred choice for many investors who are new to the market. These factors must be balanced when making decisions regarding what size of bullion bar to buy.
The cost of a gold bar depends on several factors, including its weight, purity and the current gold price. The weight of a gold bar can be as little as 1g, with a price under £50, with bars available right up to 1kg or 12.5 kg and many options in-between.
The purity, or fineness, of a gold bar will also affect its value, as finer gold bars have a higher gold content and are therefore worth more. All investment grade gold is at least 99.5% fine, but some refineries create gold that is 99.99% fine, or even 99.999% fine, which will often be valued at a higher price.
The price of gold is always changing and is based on the London Fix, which changes twice daily on weekdays. Due to this, the value of a particular gold item can fluctuate over time, and no fixed price can be given for any amount of gold.
Gold bullion bars and all other types of bullion should be stored securely in a safe or vault. Investors who intend to store their bullion bars at home should make sure that they have a sufficiently secure vault to store it in, as well as home insurance that covers the value of the gold bars.
Investors who do not intend to store their bullion at home should store it either at a bank, within a safe deposit box, or at a refinery approved by the LBMA or another certified organisation.
This will ensure the continuing integrity of the bullion bars, and make them much easier to sell on when the time comes. Investors should always take the strictest precautions when it comes to security for their bullion and should ensure that they arrange storage before buying.
Fake gold bars can be difficult to spot, and only a professional can truly identify one using suitable technology. Professional assayers can use a machine to scan the colour, texture and surface of a gold item, analysing the particles that are present in order to determine whether it is authentic.
There are several factors that may allow investors to spot a fake, though, including the colour of the gold bar. Authentic solid gold has a yellow hue that is quite different to some gold plated or gold coloured items, and this is partly what the professionals check for.
The gold should also be hallmarked using a stamp from one of the official assay offices in Birmingham, Sheffield, Edinburgh or London, and should have its own unique serial number. If it does not, it is unlikely to be authentic. If you are unsure of the authenticity of your gold, be sure to contact a professional and have it tested.
Gold is the least reactive of all metals, meaning that it does not react with oxygen or other natural elements. However, this does not mean that it cannot tarnish at all. Gold may form a very thin layer of tarnished material if it is not treated correctly, which is visible as a darkening of reflective surfaces.
Gold may tarnish for many reasons, including contact with the body, contact with substances such as sulphur, contact with cosmetic products or cleaning products, and contact with acids from foods such as onions or citrus fruits. Although tarnished gold can be a worry, it can easily be remedied if polished off by a jeweller, which should restore its natural yellow gold colour.
Gold bars come in a range of different sizes, depending on their weight. The weight of a gold bar varies widely, from as little as 1g right up to 12.5kg, with lots of options in-between. The weight of the bar you buy will largely depend on how much you wish to invest and how much you have already invested, as well as the current gold price.
When considering what size of gold bar to buy, remember that larger bars often carry lower premiums and can offer a better deal per gram, than buying many smaller bars. However, buying smaller bars allows you to take advantage of differing gold prices over time, offering you greater flexibility.
In addition to this, smaller bars may be preferable to investors who are new to the market, offering a lower price point at which to begin investing. So, there are a number of factors you need to consider when making decisions about which bullion bar to buy.
All gold bars that are assayed professionally and entered into the bullion market have a serial number, which identifies them as one of a batch of bars created in a particular year, in a particular place.
The serial number corresponds to the certificate provided with the bullion bar, which allows it to be identified when it is stored within a large vault along with many other bullion bars. It is also a way of confirming that a gold bar is authentic, as those that are not are unlikely to fit with the existing pattern of serial numbers. If you are concerned about the serial number of your gold bar or wish to discuss this topic further, please do not hesitate to contact us.
Although it is possible to store your gold bullion at a bank using a safe deposit box, it is not usually possible to deposit a bullion bar at a bank in place of cash.
This is due to the continually changing value of gold bullion, which a bank cannot account for, as well as the electronic nature of money in the present economic climate.
It is sometimes possible to buy and sell bullion at a bank, but investors should check with their bank before attempting to proceed with this.
No gold bar or coin is 100% pure gold, but all investment grade gold is at least 99.5% pure. The purity, or fineness, of a gold bar affects its value, the finer the gold, the higher the percentage of gold it contains and the more it is worth.
Some refineries create gold that is 99.99% fine, or even 99.999% fine, which is often valued at a higher price. Gold is a highly malleable metal, so the finer it is, the softer it becomes. This is why gold coins often contain a lower percentage of gold so that they can be handled without changing shape too much.
Gold is often mixed with copper and silver to make a stronger alloy, which only has a minuscule effect on its value when it is 99.9% fine or higher. For a piece of gold bullion to be traded on the bullion market, it must be assayed by a professional assay office and certified as a certain level of purity.
For many countries around the world, it is perfectly legal to travel with gold bars, as well as other precious metals. Providing that sufficient security measures are taken; gold investors should be able to take their bullion bars into these countries.
For some countries, however, there are stricter rules that should be researched in advance. When travelling with gold bars, investors must consider the potential duty charges that may be levied on items taken into a country, which can be as high as 20%. It is, therefore, good practice to research the regulations of the specific country you intend to travel to, to ensure that you are aware of and prepared for any possible charges.
It is also worth considering insured shipping companies, which will deliver gold bars to various locations around the world.
It is usually possible to take gold bars onto planes, although regulations will vary depending on the airline. For some, it is necessary to book an extra seat for a bag, while others may allow gold to be carried in hand luggage, providing that it adheres to weight restrictions. As regulations can vary greatly, investors should always enquire with the specific airline before travelling.
Those who wish to travel with gold bullion should also consider the potential duty charges of the country they are travelling to, as these can be as much as 20% of their value.
To avoid such charges, it is worth researching each country's specific regulations in advance. It is also a good idea to consider insured shipping companies, which will deliver gold bars to virtually any location worldwide.
The value of a gold bar can change from day to day, depending on the current gold price. The gold price advertised on our website changes twice daily on weekdays, in line with the London Fix, which sets the gold price for the majority of the bullion market.
The gold price is dependent on many factors, including economic forecasts, political events and the current demand for gold. The price of gold tends to rise when economic forecasts are negative, political events are unstable, and demand for gold is high and can drop when the reverse of this is true.
Although the gold price is not as volatile as the silver price, it can still change from week to week, so investors should always be aware of its current status.
The price of a gold bar changes from day to day, and you can find the current price of gold on our live gold price chart. All of the prices on our site are adjusted depending on the current gold price, so they reflect the most recent price.
The current and future gold prices are dependent on many factors, including the economic outlook, political events and the current demand for gold. Historically, the price of gold tends to rise when economic forecasts are bleak if there is political instability and when the demand for gold is high, however, it can also drop when the reverse is true.
Although the price of gold is not as volatile as the silver price, it can still change from week to week, so investors should always be aware of its current level.
The word ‘assay' means to test or check, and in the context of precious metals, this means testing the purity and authenticity of a particular item. Assay offices use professional methods to test how pure a gold bar or a piece of jewellery is, and then Hallmark the item to confirm its authenticity.
There are four official assay offices in the UK, in Sheffield, Birmingham, London and Edinburgh, and each has its own unique town mark. For Sheffield, this is a rose or a crown, for Birmingham an anchor, for London, a lion and Edinburgh a castle.
The assay offices use state of the art technological processes to test metals, scanning their surface to check for the presence of gold, silver, copper and other elements, and then calculating how pure each item is. This is the only way to be sure that an item is entirely genuine.
A good delivery gold bar is a gold bar weighing 12.5kg, or 400oz, and with a minimum purity of 995, or 99.5%. The dimensions of a good delivery bar are 250mm x 70mm x 35mm, although some allowance is given for variation.
All good delivery bars should have a serial number, the stamp of a refiner, a fineness mark and a mark stating the year of manufacture. This allows them to be easily identified as part of a batch. Good delivery bars are easily traded on the bullion market, providing that they meet the checks and regulations of the London Bullion Market Association.
Bars that have been kept within a chain of integrity, within certified vaults and without being removed to private property do not need to be re-assayed before being traded on the market.
Although gold bars have a value due to their rarity, they are not classed as legal tender for a variety of reasons. The price of gold is constantly changing, and so, consequently, is the value of gold bars.
Governments cannot guarantee the value of a gold bar, and as large gold bars hold a vast amount of gold they would be worth far more than a legal tender coin. Some gold bullion coins are classed as legal tender in the country in which they were minted, but currently, the only bullion bar known to do this is part of the Royal Canadian Mint.
Generally speaking, bullion bars are not legal tender and stand as a valuable commodity, rather than something of intrinsic monetary value.
The value of gold bars changes over time, shifting along with the gold price in times of economic and political tension. Although gold is known for maintaining an average value over time, its value does change, albeit on a smaller scale to that of other precious metals.
The value of gold is dependent on many factors, including economic predictions, political events and the contemporary demand for gold. The gold price rises when economic forecasts are pessimistic when political events are unstable, and demand for gold is high and can drop when the reverse of this is true.
Although the price of gold is not as volatile as other precious metals such as silver, it can change daily, so investors should always be aware of the current market value.
Selling gold bullion with London Gold Bullion is a simple process. All you need to do is get in touch with us to discuss the sale, which you can do via email, telephone or via our contact form. Make sure that you have the key information about your gold, including its weight, brand, fineness and how it is currently being stored.
This will allow us to verify your sale as quickly as possible, and to explain to you how to send us your gold. For gold that was originally purchased from us, we offer 100% of the spot price on the day we receive your gold bullion.
Once your gold has been appraised by our team of experts, we will get in touch to confirm the sale and send your money through bank transfer or PayPal. For bullion coins, which can sell at a higher rate than face value, we will confirm the price with you after we receive your coins. You can contact us at any point during the sale process via telephone or email. For further information, or to request a callback, please visit our Sell Your Gold page.
You should only sell your gold bullion to reputable, authorised merchants whom you trust completely. Many investors sell their bullion back to the supplier they bought it from, which is a good idea, but don't be afraid to also shop around for the best price.
We buy back gold bullion at 100% of the spot price and offer similar high rates for gold not bought from us. You can compare gold prices by telephoning different suppliers and asking them what percentage of the spot price they will buy your gold for.
Before selling your gold bullion, you should research the company that you plan on selling it to and discuss the sale with them by telephone or in person. This may assuage any worries that you have and assure you of their reliability. If you have any doubts about a supplier, it is a good idea to avoid them, even if they are offering you the best price. Remember: if a price sounds too good to be true, it usually is. To discuss the process of selling your gold bullion and find out more about pricing, please do not hesitate to contact us.
How much you receive upon selling your gold depends on a range of factors, including when you sell it and who you sell it to. As the price of gold is constantly changing, the amount you can sell your gold for will change on a daily, if not hourly basis.
This is why it is important to watch the market and always be aware of the current gold price. We buy back bullion for 100% of the spot price on the day we receive your gold or 98% for bullion bought from other suppliers.
Other merchants may buy your gold bullion at a different rate, and many offer less than 100% of spot, so be sure to compare the prices of different suppliers. To gauge how much you may receive for your gold, see our Live Gold Price Charts, or contact us for a more accurate quote. For advice on how to sell your gold, please do not hesitate to get in touch with us by telephone or email.
In today's uncertain economic climate, it is widely acknowledged that gold bullion is a very valuable asset to have and that it can be a strong method of safeguarding wealth for the future. But what is the difference between buying physical gold and buying ETFs, or Exchange-Traded Funds? For newcomers to the bullion market, these two very different ways of investing in gold might appear confusing, but they needn't be such an obstacle. Here are the essential differences, advantages and disadvantages of physical gold and ETFs, so you can be sure that you're making the right decision for your investment portfolio.
Simply put, the difference between physical gold bullion and ETFs is that one involves having a piece of gold bullion while the other involves having an IOU for a piece of gold bullion. When you buy gold bullion, you can have it delivered to your home and hold it in your hands, whereas with ETFs you simply have a piece of paper that says you own a share in gold. This is very different even from having your bullion stored in a vault and having a certificate of ownership, as with this option it is possible to take delivery of your specific piece of bullion, whereas with an ETF it is not.
A gold ETF may hold a range of gold assets, such as stocks in mining companies and actual gold reserves. This way of investing in gold has become extremely popular since the millennium, jumping from several hundred million dollars to over two trillion dollars. This trajectory is expected to continue, with some predicting that 15 trillion dollars will be invested in ETFs by 2023. Physical gold investment is also growing in popularity, as economic and political climates become ever more uncertain in both Europe and the US.
ETF investors cite the main advantage of paper trading as being the ease of transactions, which is preferable for investors who wish to buy and sell multiple times each day. Some investors also see it as an advantage that they don't have to take physical ownership of their gold, so they don't need to worry about storage or security. Investors in ETFs also avoid costs such as markups, delivery costs and storage costs; however, there are other charges that they must consider instead, such as commissions.
The downsides of ETFs are also significant, as this method does not give the investor any physical possession of gold. The investment is theoretical, redeemable for cash, and the investor does not actually own any gold at any point. This means that ETFs are not a secure as buying physical gold, and they are still susceptible to financial downturns, just as banks and businesses are. Because of this lack of security, ETFs are often used as a short-term solution by traders who intend to buy and sell quickly. The threat of counterparty risk is a significant one in the current financial climate, and should not be taken lightly.
The advantages of buying physical gold are quite clear, as the security that this option offers is almost unrivalled by any other investment on the market. Owning a physical asset is a clear advantage, as it cannot be lost through insolvency or an economic downturn. Gold is known for its ability to maintain its value over time and to help investors avoid the financial downfalls that many other markets are vulnerable to. Add to this the long-term possibilities of investing in gold and its reliability as a pensionable asset, and the advantages of this method are clear.
There are many different options for those wishing to invest in gold. Aside from the obvious choice between coins and bars, there are also options relating to purity, origin and size – which all make for a very flexible and personal investment decision.