Recently, we have seen many new clients come to us, many of whom may have never invested in gold before. For those relatively new to the gold market, you may have questions or would just like a little more information to help you make an informed decision before you take the plunge.
Should I buy gold coins or bars? Pre-owned or new? What is the difference between 22ct gold and fine gold? These are just some of the frequently asked questions we are asked on pretty much a daily basis. In this short guide, we’ll be answering these questions and more, which may help you become a little more savvy in the world of bullion.
The origins of the term “Bullion”
The word “bullion” is of French origin and means “boiling”, a reference to the practice of melting the raw gold to create ingots and bars. This practice would occur in melting houses and the term has remained the umbrella term for gold coins, bars and ingots ever since.
Popular types of bullion:
Gold Coins
The most popular and recognised British gold bullion coins are Britannia and Sovereign coins. Due to them being legal tender in the UK, they are exempt from Capital Gains Tax (CGT). This allows UK investors the freedom to invest & sell as many or as few of these coins as they require, as and when they need, without paying tax on any profit they make.
The value of a gold bullion coin is measured by multiplying its precious metal content with the current gold price, rather than its nominal monetary value. Other popular bullion coins from across the globe include the USA Gold Eagle, Canadian Maple Leaf, and South African Krugerrand.
Gold Bars
Our range of gold bars is extensive, and we have gold bars for investment from 1 gram up to 1 kilo in weight. But we could be excused for saying these are usually not quite as interesting to look at as the coins! A gold or silver bar is just exactly that, a bar of the precious metal produced by varying manufacturers from around the world, to just be a bar of a certain weight and purity, conforming with all international standards.
Gold bars or coins, which is best?
All gold coins and bars are exempt from VAT, and therefore the quoted price you see on our website is the full complete price – including delivery to your door.
In a nutshell, bars generally work out a little bit cheaper to buy than the same weight for a coin, however there are pros and cons to each. Coins can offer greater liquidity, as well as often feature attractive or historical designs stamped with a date, adding a collector element to precious metal investment.
Bullion purity
The purity of gold bullion (or ‘fineness’) is measured in parts per thousand. For example, many gold coins have a fineness of 999.0 meaning it contains 999 parts gold and 1 part of another metal. As 100% pure gold is virtually impossible to achieve, the purest type of gold available is 999.99, and any coin or bar containing 999.0 or above is considered ‘fine gold’.
Some coins, most notably the ever-popular sovereign, are struck in 22ct gold, or 916.7 fineness. This means the coin contains 916.7% fine gold, which has then been alloyed with another metal such as copper, usually making the coin more hard-wearing.
What is gold bullion used for?
A core reason why many choose to invest in gold bullion is to protect their wealth against economic fluctuations. The value of assets like property and shares are heavily influenced by the global economies so they can lose vast amounts of value should an economy crash. Gold is often used to hedge against the forces of inflation and uncertainty on global markets. It often appreciates in value in times of economic slumps where trust in paper money falls and so the value of assets such as gold become a more trustworthy measure of wealth. In this respect, gold is often seen as a positive investment for protecting wealth in the long term.
However, it’s also worth noting that, due to the variety of designs of new coins being bought out each year, gold bullion coins can also be a popular choice as a collector’s item.
Should I buy pre-owned or new?
If you are looking to get the most physical gold or silver for your money, buying pre-owned can often be the best option.
In today’s online market, new coins and bars are constantly sold at competitive premiums. However, these new products often attract costs such as manufacturer’s premiums and delivery, and so are generally more expensive than second-hand ones.
How to buy gold bullion
When it comes to buying gold bullion, it is essential to do your research. World affairs and stock market activity often results in fluctuating gold prices, so it is important to take this into consideration when purchasing. If you are buying bullion online, take a little time to research into the bullion dealers and ensure any payment and delivery options are guaranteed and secure. Trusted bullion dealers will be used regularly by loyal customers and will utilise reviews to show this.
In today’s world, awareness of the impact of climate change is increasingly inescapable, and issues such as sustainability and recycling are high on much of the world’s agenda. One way we as investors could be contributing to helping our planet is through precious metals.
In this article we will cover the process and benefits of recycling precious metals, where recycled gold and silver can be found, and how investors could be helping the planet whilst also planning for their financial future.
How much gold and silver is recycled?
Precious metals are some of the most highly recycled items in the world, with a surprisingly large amount of the annual consumption of gold bullion and silver products being made from recycled material. According to the World Gold Council, gold mine production accounts for around 75% of available gold each year – the rest is made up from recycling, due to demand requiring more gold than is newly mined. Silver recycling is a little lower as, due to its relatively low price in comparison, is more likely to be thrown away or lost.
The benefits of recycled gold and silver
The main benefit of recycled gold and silver is that they are less impactful on the environment. Precious metals mining requires new sources of naturally formed gold and silver, but these are now depleting, and as a result, the environment is being harmed as we search for new sources. Recycling existing gold and silver products lessens the need to source new material, meaning much less harm to the environment.
Recycled gold and silver can be melted down and recycled over and over again without losing their value or purity. These precious metals have always been recycled and therefore there is rarely any actual consumption of the product – ownership is merely transferred from one ‘owner’ to another. Therefore, the gold in those sovereigns you have could have come from anywhere – royalty? Ancient Rome? We can never know.
How are gold and silver recycled?
The recycling process begins with the metals being inspected and separated before they are shredded into smaller pieces. They are then melted in a furnace designed for each specific metal, as each metal requires a different temperature. A purification process is then undertaken to ensure the newly produced metal is free from any contaminants, and is of the required purity, and then the metal is cooled and solidified. The last stage of the process is the moulding of the metal into the finished product – your bar or coin.
Precious metals such as gold, silver and platinum are classed as non-ferrous metals, which means they don’t lose any of their physical or chemical properties during the recycling process. This process can then be repeated as many times as required. Precious metals have a multitude of uses in our everyday lives: not only bullion bars and coins, but also no longer worn jewellery, dental gold, and even many modern technological products.
Are recycled precious metals more ethical and sustainable?
Recycled gold and silver are often seen as more ethical and sustainable than their newly mined counterparts. These metals can be recycled multiple times without losing their quality, which is a much more sustainable solution than mining for new gold and silver.
Recycling helps the future of our planet. The recycling of our old precious metals rather than mining the new, means there is no extravagant use of heavy machinery emitting exhaust fumes, no dammed-up rivers or water pollution, no forests felled, or mountains removed to make way for gold mining. The recovery of old precious metals, and re-melting it in refineries, means far less damage to the environment.
How you can recycle your gold and silver
Many places that sell gold and silver, such as ourselves, will also buy it back from you. This not only includes gold and silver bullion coins and bars, but also scrap gold and silver, such as old jewellery items, which may in turn go back into the system to be recycled and resold or melted down and made into brand new products.