By Zoe Lyons, Executive Account Manager at Hatton Garden Metals.

When it comes to investments, there are many options available to those who want to see their money grow. One such investment which has proved popular over the years is gold buying. Purchasing gold has long been seen as a solid investment choice due to its prospering value since the 1970s. Over the past 10 years, although there have been some fluctuations, the price of gold has grown from around £843 to £1,478 per Troy ounce.

Historically, gold has often been able to hold value in financial and economic uncertainty and has regularly outperformed other investment types. Many opt for gold buying as it grants the owner full control over their investment, allowing you to buy and sell as and when you wish.

But if you have never purchased or considered buying gold before, you may be a little confused as to how it all works or how much it can help your money grow. Here, we answer some of the most frequently asked questions regarding buying gold.

How Can I Purchase Gold?
When buying gold, the process is very similar to purchasing anything else of high value. Firstly, consider how much you want to spend or invest, then choose the form of your gold (either bars or coins). Many companies sell gold bars and coins which can be purchased either online or in person. You will then need to decide how you want to store your gold to ensure it is kept secure. The gold will then be under your ownership until you come to sell.

Should I Buy Bars or Coins?
As mentioned above, when purchasing gold, you have the option to choose either bars or coins, each offers its benefits. Those who are more appreciative of the historical value of gold generally opt for coins. They can be very attractive to collectors or investors looking for rare types too. This can sometimes increase the amount that someone is willing to pay, so you may receive a higher price when you come to sell, making the price of gold coins a little more fluid than bars. Gold bars however are not influenced by historical factors and are not seen as a collector’s item. Therefore the price is much easier to estimate as it is based on weight, purity and live gold prices. This can allow for a more streamlined buying and selling process for your gold as the value tends to be easier to track.

Do I Need To Pay Capital Gains Tax?
Capital Gains Tax is exempt on all British Gold Coins that are still considered Legal Tender, most frequently brought in the form of the Gold British Sovereigns and 1oz Gold Britannia coins. The tax benefit makes these coins the most favourable amongst UK buyers. You may need to pay CGT on profit that you make from selling other types of gold. This will be dependent on how much profit you make plus your financial circumstances, such as salary and other income you receive. It is the responsibility of the individual to declare Capital Gains to HMRC and pay any tax which is due. You can refer to the HMRC website, which details information on CGT.

Where Is My Gold Kept?
As previously mentioned, you will need to consider where you store your gold. Ensuring that your gold is safe is worthwhile as it helps to protect your investment. If not properly stored, the security of such can be compromised. Simply keeping it in your home can be a risk. If you are burgled, your home insurance may not cover your losses. Many companies offer secure, insured storage which is a highly recommended practise when investing in gold. You will need to pay a fee to keep your gold within these vaults, but it’s a small price to pay for keeping your investment safe and sound. When looking at storage options, be sure to choose a company that allows easy access to your gold and check to ensure they are covered by insurance.

How Do I Sell Gold?
When you do decide to sell your bars or coins, many companies specialise in the buying and selling of gold who you can sell to and you may be able to sell the gold back to the company from which you purchased it from. Many of these companies will allow you to do this either online or in-person, but this will be dependent on who you are selling to. The price you receive will be based on type, weight, purity and live gold prices.

There is also the option of selling gold to jewellers or pawnbrokers. But they may request to value the gold in-person and you may not always receive the best price.

When Should I Sell Gold?
As you are in sole control of your gold, it is up to you when you feel the time is right to sell. Like any investment, prices can fluctuate at any time. If the live price of gold has increased since your purchase, you may wish to sell to make a profit, or you could hold off on the chance of making more money. If the live price is less than when you purchased, you may want to wait until prices increase at a later date. You will also need to consider your financial circumstances and whether or not you can put off selling.

Is Buying Gold More Beneficial Than A Savings Account?
Many people opt to purchase gold as an alternative to a savings account as rates of interest on savings accounts are currently quite low, so it may not always be the best option if you want to see your money grow. Some may opt for buying gold instead, in the hope that the value increases over time – after which they can sell and receive a profit. Although this does sound more lucrative, you will need to consider risk and the potential of gold prices decreasing, which could incur a loss. It is up to you how you want to invest your money, but gold buying could be a worthwhile option when diversifying your portfolio.

Is Silver A Worthwhile Investment Too?
As well as buying gold as an investment, there is also the option of purchasing silver too. Buying silver is very similar to buying gold, you have the option of choosing either bars or coins. However, the price of silver is often more volatile than gold. Because of this, many opt to invest in silver over a longer period. So while it is a good option for investing, you may want to trade it slightly differently than you would with gold.

Conclusion
Hopefully, the above FAQs have allowed you further insight into buying gold. As with any investment, there are many factors to think about and risk should always be considered. For more information, seek help from gold buying specialists or financial advisors.