Disclaimer: This blog post is for informational purposes only and should not be taken in any way as financial advice…
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Looking For Ways To Protect Yourself In Economic Uncertainty?
Everybody knows that precious metals have historically been used for creating fine jewellery. However, precious metals have long had uses that go way beyond jewellery making. For centuries, precious metals have been used as a hedge against inflation, economic downturn and war by investors looking to protect their wealth.
Bullion is classed as either bars, ingots or coins which are made from precious metals like gold, silver, platinum or palladium. Bullion is made from pure or 99.9% precious metal.
Why Precious Metals?
Unlike fiat currency, precious metals have a limited supply. Currencies like the US Dollar or the Pound Sterling can be printed by Central Banks. The increase in supply of the currency ultimately leads to the devaluation of the currency.
Since precious metals need to be physically mined from the earth and can’t be replicated in its true form, they have the ability to hold their value against a devaluing currency. This is the main reason for these metals being so popular with investors.
How Can You Invest In Gold & Silver?
There are many different ways of investing in gold and silver. Physical bullion, ETF’s and derivatives are just a few of the options available to you.
Personally, we believe that physical bullion is the best way to go as you are able to actually hold your gold or silver in your hand.
It is also possible to buy bullion and have it stored in the seller’s vault. This can be beneficial especially if you are buying large amounts which you don’t want just lying around your house. However it is important to ensure that the seller actually has the metals they are selling you before choosing this option should you want to request your physical metals at a later date. This is why we tend to recommend physical bullion over ETF’s or derivatives.
Storing Bullion in a vault usually comes with fees. With this in mind, it is probably a better option if you are wanting to buy over £2000 worth of bullion. Otherwise the fees can potentially wipe out any profits you can make. You can use a bullion trader like BullionVault to buy and sell precious metals at spot price for storage. A good reason to use BullionVault is that you can request your metals to be sent to you at any time…
The only real downside to owning physical precious metals over an ETF or another paper version, is that it is not as liquid. What I mean by that is, when the time comes for you to sell your metals, with an ETF or other paper trade, you can do so with just a few clicks of a button if you’re using a stock exchange.
Should I Invest In Gold Or Silver?
What you choose to invest in usually depends on your financial situation. Silver is the more affordable option but buying gold can also be affordable if you buy in gram bars.
Many people choose to invest in both gold and silver to diversify their portfolio. There are obvious benefits to buying both metals.
Silver is typically more volatile than gold, mostly due to the metal being used in a wide range of electrical goods for its amazing ability as a conductor of electricity. This means that the prices can fluctuate according to the demand for the metal for manufacturing and production purposes.
Investment gold is free from UK VAT which makes it a much more attractive option for some people. It’s price is much less volatile than silver making it ideal for long term holding. An ounce of gold in March 2003 would have cost you around £209. Today, that same ounce would be worth £1,612 (at the time of writing).
Take a look at the chart below to see the changes in price of both gold and silver over the last decades…
This chart contains affiliate links.
Gold and silver coins like Britannias are actually classed as legal tender. This means that they are also exempt from Capital Gains Tax which makes it even more attractive to investors.
Being a legal tender that holds its value, it would also offer protection against a complete banking system failure. Should a fiat currency like GBP, the Euro or US Dollar become worthless, you will still be able to buy day to day items with your gold & silver coins…
Looking For Gold & Silver Coins?
One of our favourite places to buy gold and silver coins online in the UK is Bullion By Post. They stock a wide range of bullion with the option of delivery or VAT free storage. Plus, if you order £250 worth of bullion using our link, you will also receive a FREE 1oz Silver Britannia…
Do you currently invest in bullion? If so, are you team gold, team silver or own a bit of both? What’s your preferred method of investing in gold and silver? Leave a comment and start a discussion…
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Great post on getting started with gold and silver bullion investing! The three things you mentioned are really helpful for beginners like me. Looking forward to learning more from your site. Thank you!
Thanks, I’m glad you found our blog helpful 😊 hope you enjoy the rest of your day!