The Royal Mint has just swung open its vault doors to gold bar investors – selling solid ingots for about £50 each.
Its move demonstrates how gold is no longer the preserve of the super-rich – as portrayed by James Bond villain Goldfinger.
Nor is it necessary to have your own security vaults to hoard your gold as in Harry Potter’s Gringotts Bank.
As well as cut-price gold bars you can invest in collectable coins, jewellery and gold investment funds.
A key appeal of gold is that it is a physical asset you can hold and touch – not just a piece of paper that will (hopefully) make you money. This is why it is usually popular in times of economic turmoil such as the 2008 financial crisis.
Other benefits of holding gold – in bars or coins – are generous tax breaks. Investment-grade gold escapes VAT thanks to a 2000 EU Gold Directive. There may also be no capital gains tax on certain British gold coins sold by UK residents at a profit, such as Britannia and Sovereign coins, as these qualify as legal tender.
Gold can even be put into a self-invested personal pension, if done correctly.
Gold is measured in troy ounces – slightly heavier than a normal ounce. Even though it is often portrayed as a safe haven in difficult times, in recent years it has lost a lot of its lustre as its price has slumped. In the decade to 2011 its value soared almost eightfold from $250 (£170) to $1,900 (£1,260) a troy ounce.
But today, gold trades at around $1,265 (£840) an ounce.
A traditional gold bar – as defined by the London Bullion Market Association – is made from 400 troy ounces of gold. This 12.5-kilogram doorstop is worth about £340,000.
But to woo more investors, The Royal Mint last month started selling mini-gold bars weighing no more than a gram – the size of a thumbnail and costing about £50.
Gold coins are minted in various countries, but the most popular include the South African Krugerrand and the British Britannia.
The Kruger is a 22-carat gold coin. It contains an ounce of pure gold but it is also comprised of a copper alloy to harden it. The Britannia is one ounce of pure 24-carat gold.
Source This Is Money
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