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How to invest in Gold Bullion. An Ultimate Guide to Gold Investment

For centuries, gold has been associated with wealth and security, and the reasons for this are as valid today as they were back in the mists of time. Gold is a rare and precious commodity, and around the world financial advisors will recommend you invest in gold bullion.

As currencies rise and fall according to the health of world markets, gold tends to hold its value; in fact, volatile financial markets usually see a corresponding rise in the price of gold. This is why gold is sought after and traded globally, as a safe asset providing protection against uncertainty.

The benefits of gold investment

Gold is about as immune to the vagaries of world financial upheaval as it's possible to get. When recessions hit and interest rates are low, savings accounts will grow slowly or barely at all, yet gold can be relied on to hold and build its value. Even when the trough becomes a peak, gold still maintains a steady price and represents a safe investment.

Why is this? The world has a finite supply of gold, which is challenging to locate and mine. In South Africa's Mponeng mine, miners are now searching for gold veins 2.5 miles below the surface. They may excavate over 5,000 metric tonnes of rock every day, yet only need to find 10 grams of gold per metric tonne for the operation to be profitable. Such is the rarity and value of gold.

Supplies are dwindling, yet demand is still increasing. Gold mines in the main producing countries, which include South Africa, Australia and China, are becoming exhausted. This scarcity means you can be confident that your gold is unlikely to fall in value; if it ever does, it won't be by much or for long.

Frequently Asked Questions

Gold is an investment you can rely on, especially when world markets are volatile. It’s traded and respected globally and scarcity vs demand means it will continue to increase its value.

No, investing in gold bars can be much more affordable than you think. 

You can physically own gold bullion and therefore control it more easily. Other gold investments, such as ETFs, are remote and you only own the contract, not the gold.

Both gold bars and gold coins are good buys, but you’ll avoid paying tax on the purchase and sale of UK legal tender gold coins.

We would recommend Gold Sovereigns and Gold Britannias as they’re recognised and valued worldwide and exempt from VAT and Capital Gains Tax.

Not necessarily. Canny investors hedge their bets by having a mixed portfolio, e.g. shares, property, gold bars and gold coins.