A checklist for gold, silver and platinum
Many people choose to invest in gold, silver or platinum, opting for such investments for a plethora of reasons. However, investing in such metals involves taking a number of factors into account.
Why should you buy gold, silver or platinum?
There is certainly something unique and tangible about holding a bar or coin that has been formed from precious metals, but an investment decision is clearly about much more than simply considering how gold, silver or platinum would look in the palm of your hand.
Investing in precious metals could provide a useful means for diversifying your investment portfolio, with gold, in particular, often being seen as a safe haven during times of economic uncertainty.
Is this a realistic investment option?
It may be tempting to think that gold, silver and platinum bullion are the preserve of the super-rich, as you picture movie scenes of gold bars piled high in warehouses or vaults. Fortunately, the reality is rather different to those imagined scenes.
The gold and metal markets have probably never been more accessible than they are today. Some smaller gold coins produced by The Royal Mint, as well as our RMR bars, for example, provide a relatively inexpensive means of entering the market. DigiGold also allows anyone to purchase gold from as little as £25, and store it within The Vault – our on-site, secure precious metal storage facility.
Are values guaranteed to increase over time?
As with any investment, there can be no guarantee that gold, silver and platinum prices will increase over time. Although historic price charts can provide some insight into what’s happened in the past, the future is always unpredictable.
Should you opt for gold, silver or platinum?
The rarity of gold and platinum means that they are more expensive to purchase than silver, ensuring that you may appear to get more for your money when buying silver. But the situation is somewhat more complex: purchases of gold in the UK do not currently attract VAT, for instance, whereas silver and platinum purchases do.
Gold prices tend to move more slowly than the price of silver and platinum, with the latter two seen as being more volatile, in part because of their wider use within industry. The best option for your own circ*mstances is likely to depend upon your attitude to risk and whether you are seeking a long-term investment.
Where will you store your bullion?
If you’re intending to take delivery of your bullion, then you’ll need to consider how it will be stored in a safe and secure manner. This may mean using a safe in your own home, or taking advantage of safety deposit boxes that are offered by banks and other financial institutions.
The Royal Mint, in common with other precious metal providers, are able to offer secure storage facilities, meaning that you need not take physical delivery of your purchase.Our secure facility, known as The Vault, is constructed and secured to the highest standards and is guarded by trained security staff, 24/7.
How much does it cost to store precious metals?
This depends on your chosen storage solution. If you elect to store your investment in a safe, either at home or at a bank, these costs can vary. In terms of storing with The Royal Mint, we offer atransparentpricing structureand a cost-effective storage solution.
What form of bullion should you buy?
Your options essentially consist of coins, bars or digital precious metals. Each of these forms have both advantages and disadvantages, and the choice is very muchdependent on the requirements and individual circ*mstances of the purchaser. With this said, the decision between coins and bars is often dependent on the funds which are available to the buyer; coins tend to be cited as beingmore suitable for those making a modest outlay while bars offer a more straightforward means of acquiring larger quantities.
Furthermore, some of the other considerations which are often cited are:
- Resale
When investing in bullion, one of the first questions asked by many is “how do I resell it?”,as if you choose to take delivery of your purchase, at some point you may wish to liquidate it.As bullion coins also have a certain numismatic quality (they may also be desirable to coin collectors for example), they may be easier to sell than bars, as bars tend to be sold for their intrinsic value only. If you choose to store your gold purchase with us in The Vault, you may sell it back to us at any time using the website. Similarly,digital precious metals can be sold back to The Royal Mint whenever you choose, aswe are also able to store it on your behalf, meaning that this is an attractive option for many investors.
- Capital Gains Tax
An important consideration for some investors is Capital Gains Tax (CGT). As all of our current range of bullion coins have legal tender status, they are exempt fromUK Capital Gains Tax for UK residents. This applies to gold, silver and platinum coins, but the same exemption does not apply to any bullion bars or digital precious metals.
- Purchase premium
In terms of the cost, it is usually the case that as the quantity of bullionincreases, the purchase premium decreases. Bars are likely to carry a lower premium as you move upwards from 1 g, though the premium for coins tends to be higher. However, due to the lower storage and manufacturing costs, our lowest priced premium product is currently digital precious metals.
- VAT status
A wide range of bullion products are exempt from VAT and are classed as VAT free for non-VAT registered private individuals. These include all of our gold coins (such as The Sovereign & Britannia) and bars (such as our RMR & Britannia bar ranges). In contrast to this, silver and platinum bullion coins and bars are both sold subject to VAT at the standard rate.
It's easy to get started. Simply create an account and start investing in bullion right away.
Investing with The Royal MintCreate an account
I'm quite familiar with the intricacies of investing in precious metals like gold, silver, and platinum. I've had the chance to delve into the market trends, factors influencing prices, and various forms of bullion available in the market.
The article you provided touches on several critical aspects of investing in precious metals. Let's break down the key concepts and information:
Reasons for Investing in Precious Metals
- Diversification: Precious metals offer a way to diversify an investment portfolio, especially during economic uncertainty.
- Tangibility: There's a unique appeal in physically holding bars or coins made from these metals.
Realistic Investment Options
- Accessibility: Contrary to the misconception of being exclusively for the super-rich, markets for these metals have become more accessible. Smaller coins and digital platforms (like DigiGold) have lowered the entry threshold.
Price Trends and Considerations
- Price Movement: Gold tends to have slower price movements compared to silver and platinum, which are more volatile, partly due to their industrial usage.
- Purchase Costs: VAT (Value Added Tax) can differ among these metals. Gold purchases in the UK don't attract VAT, unlike silver and platinum.
Storage Options
- Secure Storage: Whether at home or using secure facilities like The Royal Mint's Vault, storage considerations are crucial for physical bullion.
Costs Associated with Storage
- Transparency: Costs for storage vary based on the chosen solution, but options like The Royal Mint offer transparent pricing structures.
Forms of Bullion Available
- Coins vs. Bars vs. Digital: Each form has its pros and cons, depending on individual preferences, funds available, and ease of purchase.
Resale, Taxes, and Premiums
- Resale Value: Bullion coins might be easier to sell due to their numismatic quality, while bars are often sold for their intrinsic value.
- Capital Gains Tax: Certain bullion coins (with legal tender status) are exempt from Capital Gains Tax in the UK.
- Purchase Premium: Premiums tend to vary based on quantity; bars often have lower premiums compared to coins.
- VAT Status: VAT exemptions differ across metals, with gold generally exempt in contrast to silver and platinum.
This comprehensive checklist covers various aspects, from why one should invest to considerations regarding storage, costs, forms of bullion, and taxation implications. It emphasizes the need for a personalized approach based on individual circ*mstances when venturing into precious metals investment.
