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Dec 24

Investing in gold and other money metals

Reading Time: 3 mins

Ever considered investing in gold or the money metals?

In this episode of the How To Be A Money Magpie podcast, founder Jasmine Birtles is joined by Karina Hicks from The Royal Mint to look at easy and safe ways to invest in gold and the other money metals.

Listen to the podcast below, or read the written summary!

 

Why are money metals so popular?

  • Gold is by far the most popular metal
  • It’s a huge global market, it had liquidity, it’s easy to buy and sell
  • The performance of gold, especially over the last 20 years has improved by over 10%
  • Diversification, gold reacts differently to other investment options, such as stocks and shares
  • Precious metals perform better when the economy goes through a rough patch, whereas stocks and shares fall with the economy
  • Gold can be a safe option for investing

 

Why is gold so appealing?

  • Inflation, low interest rates, monetary and fiscal policy are huge drivers for the price of gold
  • There is a correlation between inflation and the value of gold

 

What about silver and platinum?

  • Silver is a very popular investment choice; it has intrinsic value as a finite resource
  • It can be more volatile than gold, but it is cheaper and more affordable
  • Platinum has only recently started to become more popular as an investment option

 

What is the easiest way to buy gold?

  • It really depends on personal preferences
  • People have different budgets
  • Some people want a physical version of their gold, they want to be able to look at it and touch it
  • There are many different sizes for people of all budgets and all levels of investment experience
  • There are also digital options, which are growing in popularity
  • It is backed by physical gold but is run by a digital online account
  • Digi-gold is stored at The Royal Mint and covered by insurance
  • Try not to tell people about your investment in gold for safety
  • With digi-gold you can decide the monetary value, so it’s more cost-effective

Are there a tax advantages to owning gold?

  • There are tax advantages linked to gold which are slightly different depending on your choice of product and investment
  • In the UK, the bullion coins, the sovereign, the Britannia and a whole host of other coins are available
  • They come with the benefit of capital gains tax exemption for UK residents, as they are actually classed as legal tender
  • All investment gold is VAT free for non-registered individuals too

 

Is digi-gold particularly popular with young investors?

  • Yes, over the past 2 years digi-gold has soared in popularity
  • There is a huge demand from younger investors
  • It may be linked to the cryptocurrency phenomena
  • It has certainly hit a chord with millennials
  • We have seen a 435% increase in millennials investing in the last 12-18 months

 

Is gold a good investment for children?

  • The tax exemptions still apply
  • We have a Little Treasures range, designed for parents and grandparents to be able to build a nest-egg for their child
  • It is similar to other savings methods – you can choose a monthly amount which you can pay into your digital account and the gold is stored in The Royal Mint vault
  • It is worth investing in something like this if you can, as it is left to build and mature which you can gift down the line

 

Can you put gold into a SIPP?

  • You can’t put gold into an ISA but we have an offering called Gold for Pensions
  • This allows your SIPP or SAPP to hold physical gold within your pension scheme
  • For UK residents there is a significant tax relief on this

 

More from The Royal Mint

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