Gold hit a record high last week, breaking the $2,800 (£2258.86) per troy ounce level.
That was partly thanks to Donald Trump’s threats to impose tariffs. New York investment professionals quickly called in a lot of gold bullion just in case Trump went ahead with his plan. They didn’t want to pay extra to bring it into the country.
In the last two years gold has risen 40 per cent against the pound – and that’s without a threat of tariffs. It has also increased at an average rate of over 10 per cent a year over the last 25 years.
If you believe that this bull run will continue – and there are a lot of good reasons to assume it will– then a really good way to start is to buy gold sovereigns.
When you buy sovereigns there is no VAT charged on the sale and when you sell them you don’t have to pay Capital Gains Tax (CGT) on any profit you make, because sovereigns are still considered legal tender. Note, though, that this only applies to coins that have been produced by the Royal Mint.
Gold hit yet another all-time high last weekGETTYAnd there is an added reason why more and more older people are now buying even more of them. In a recent MoneyMagpie Invest podcast, Andrew Foster from sovereign traders BullionClub told me that a number of their clients collect gold sovereigns because there is no official register for them in the UK.
He says on the podcast “a lot of people are preferring to place some of their estate into gold coins because there’s no public register for gold, unlike property where, when you buy property in the UK it gets registered at the Land Registry, and HMRC can view that, but there is no registry for gold so it makes it a little bit more invisible so to speak!”
Not that anyone here is advocating tax evasion, of course, but it’s interesting to know that those who are concerned about inheritance Tax (IHT) are looking to gold sovereigns to protect their wealth for future generations.
You can make even more money from sovereigns by investing in collectible ones. With collectible sovereigns you have not only the value of the metal, but also the increased desirability of rare coins as time moves on which pushes their price up even more.
BullionClub itself buys and sells rare coins and currently has the most valuable coin available on the market. It’s a Victorian sovereign which is worth over £525,000.. For coin enthusiasts this is the top coin to get your hands on.
It is the 1889 ‘Uno and the Lion’ minted to commemorate the start of Queen Victoria’s reign, with a likeness of the young Queen on the front. IIt is graded at 65+ – almost the top grade that a gold coin can have. It’s also, of course, VAT free and CGT free when you sell it as it’s a sovereign.
Harry Thorne, CEO of BullionClub says “It’s a chance to own a piece of history. It’s not only about the fact that you’re buying an incredibly rare coin – the sort that never normally comes to market, but it’s the opportunity to have something that’s also increasing in value in a safe haven market. You really can’t go wrong with gold.”
John Butler, author of The Golden Revolution Revisted, agrees with this estimate. He says “over the past few decades, gold going up has really been about the pound and other currencies going down.
“That has accelerated in recent years because everyone ramped up spending for Covid and they never really took their feet off the gas.”
Jasmine Birtles looks at investing in goldJASMINE BIRTLES
If you’re interested in investing in gold, there’s a good choice of ways to do it. Not only can you buy sovereigns or simply lumps of gold, you can also invest in digital gold through companies like Bullionvault, TallyMoney or Glint.
All worth a look if you would like to invest in gold without physically storing it in your home.
In fact, you can find out everything you need to know about how to start, where to go and what profit you could expect to make with my free ebook here on how to invest in gold. Download it for free and get into gold!
Jasmine Birtles is the founder and editor of MoneyMagpie.com