How to Invest in Gold
This blog aims to provide an introduction to the different ways to invest in gold. First and foremost, it is essential to have clear goals for any gold investment, whether short-term or long-term. Understanding the nuances between different gold products can also help you make informed decisions surrounding any associated tax implications and cost efficiencies. In this guide, we’ll provide an insight into different gold products, storage options, and the key factors in determining the gold price - all with the aim of helping you understand the options available to you.
What are the different ways to invest in gold?
There are many ways to invest in gold each with their own characteristics. Typically, investors might lean towards ownership of physical gold to maximise on the safe-haven status of this type of investment, however other methods do exist. Below are the three most common types of gold investment:
- Investment into physical gold bullion; ownership of gold coins or bars often stored at a private vaulting facility, or at home in a safe.
- Exchange Traded Funds (ETFs); allow for gold to be purchased without the need for physical ownership. Whilst many ETFs simply trace the gold price, others offer a more holistic approach, by including investments into the entire industry, such as into mines and refineries.
- Jewellery; investment into high-end jewellery is popular the world over, however, some may be off put due to higher premiums and reduced liquidity compared to gold bullion.
For the purposes of this blog, we will focus on investment into physical, investment grade gold bullion.
Gold Coins or Gold Bars?
Since 1st January 2000, investment grade gold has been exempt from VAT in the UK. To be classified as investment gold, there are specific criteria regarding purity and form. For example, gold bars and ingots must contain at least 99.5% purity, while gold coins must be at least 90% pure. Investment grade gold coins must also be manufactured by a world-renowned mint, for example, The Royal Mint. Here is a more detailed breakdown of some of the differences between gold bars and gold coins:
Coins: Perhaps the most beginner-friendly method of investing in gold, coins come in several denominations. The two most common types of British Gold Coins are Sovereigns and Britannias with the two main differences being their size and carat. Whilst Britannias are 24ct of fine gold, Sovereigns are 22ct, bringing their proportionate gold weight down to 7.32g out of a total 7.98g. There are plenty of options with regards to Sovereigns and Britannias, with denominations as small as ¼ of a Sovereign (1.99g). Due to their status as British legal tender, Britannias and Sovereigns are Capital Gains Tax (CGT) exempt for UK tax payers. Other popular investment coins include Krugerrands, which were the first 1oz gold coin to be produced and are known for their recognisable obverse featuring a Springbok. Lastly, one should not underestimate the collectible appeal of gold coins and the potential value this may bring.
Bars: Like coins, gold bars come in a range of denominations ranging from 0.5g and 2.5g all the way through to 25kg, however 1kg bars often prove one of the most popular weights for larger investments. Bars command a smaller premium over coins, due to being much easier to manufacture. However, whilst providing a more cost-effective entry into the market due to these low premiums, they can take on a less-affordable exit as they are subject to CGT.
For more information on the differences between bars and coins, you may wish to read our blog.
Do Your Research into Gold
Before making an investment, it is important to dedicate some time to understanding the market, and the various forces at play which may influence the gold price. Key factors include economic indicators, geopolitical tensions, interest rates and inflation. Each of these has a bearing on whether the price of gold rises, falls or remains stable. There are plenty of outlets to support understanding of gold price fluctuations, including the Sharps Pixley Newsroom, as well as other news sites and financial commentators. By keeping an eye on the gold price you can begin to understand how it rises and falls over an extended period, and you can base your position in the market accordingly; helping you to decide when is the right time to invest in gold.
Before investing in physical gold, consider what type of gold you would like to buy (coins or bars), where you would like your gold to be stored, and what you want to achieve from your gold investment. From there you can start consulting with experts to decide how you would like to invest.
Lower the Risk by Diversification
The term ‘diversification’ is often associated with gold. In effect, it describes investing in multiple different assets to lower the overall risk of loss. By investing in multiple avenues, the risk of one investment not reaching its goal is offset by the positive performance of others.
Typically, gold is seen as a strong candidate for diversification. Considered a ‘safe-haven asset’, gold built a reputation for its ability to protect against inflation and economic instability: According to the World Gold Council, gold has proven its worth in previous economic downturns, delivering positive returns in five out of the last seven recessions since 1973. As one of the oldest investments in the world, gold’s ability to remain stable in times of economic hardship and instability cannot be underestimated. Over the course of 2024 especially, investors have seen a significant return on their gold investments due to increased instability in Europe, the Middle East and the USA and this rallying in the gold price has been seen again so far during 2025 with gold touching fresh all-time highs.
The addition of a gold investment can benefit any size of portfolio, acting as padding against risk, whilst also having the potential to bring return on investment.
Stick to Your Investment Objectives
Gold can be both a short-term and long-term investment, so ensuring that solid investment aims are made can help to focus your investment journey. Whilst gold is known for its stability and benefits to long-term investors, short-term investments are possible when gold prices significantly increase over a short space of time. If your aim is to make short-term investments, it is important to note the differences in the tax efficiencies of coins, over the cost effectiveness of bars.
For those who wish to invest for the long-term and focus on outcomes such as returns, preservation of wealth, or growing a pension fund, it is again important to consider the differences between different gold products, but also how you might like to diversify your gold investments between coins and bars within the same portfolio.
Contemplate Security & Storage for Your Gold
Of course, as with any tangible asset, it is important to consider storage and security.
Once again, research is needed on how you would like to store your gold - at Sharps Pixley we often advise our investors to consider using our world-class security facilities for storage at competitive prices. Knowing that your precious metal is safely secure in either our Grade 10 Vault facilities, or your own private Safety Deposit Box at our facility, can bring extra piece of mind that your investment is protected.
Vaulting and Safety Deposit Boxes both have different benefits; however, they are both second-to-none in the security they provide and extremely competitive insurance policies. Some investors prefer home storage, in which case investing in a top-tier safe is advisable.
In summary, there are a number ways to invest in gold, each with their own advantages. Physical gold such as gold bars or gold coins provide the investor with a highly liquid, tangible asset that will not rust or fade, cannot easily be faked and holds an intrinsic value not reliant on other assets. Before beginning a gold investment journey, you should consider your investment goals, storage options and how the gold price is affected by economic and geopolitical factors.
If you’d like to find out more, our expert team at Sharps Pixley would be delighted to discuss any questions you may have on T: +44(0) 207 871 0532 or by emailing [email protected].
23 Jul 2025 | Categories: Gold, Coins, Bars, Capital Gains Tax, Investment strategies, LBMA, Beginner's guide