Best ways to buy and store physical gold

Best ways to buy and store physical gold

From The Royal Mint to BullionVault we look at the different ways to buy and store physical gold

Anna Jordan

Investing and pensions

Anna Jordan
Updated on 5 June 2015

Gold is often cited as a safe haven for investors, something to put your money into which won't be subject to the usual economic volatility of things like stocks and shares.

But just how do you go about buying physical gold? 

The Royal Mint

Last year The Royal Mint launched a trading website which offers a range of different gold and silver products.

This week it has expanded that range with the launch of Signature Gold, which allows you to purchase a fraction of a 400oz gold bar. Prices start at £20 - it's the first time that the Royal Mint has sold gold by price. 

It also differs from the gold and silver coins on sale in that you can't take it home with you - the gold is stored in the vaults at the Ministry of Defence.

Brokers and gold trading sites

There are plenty of other sites besides the Royal Mint which allow you to invest in physical gold.

Established named include BullionVaultCoininvest, ATS Bullion, Chards and GoldCore. If you want it delivered, they’ll get it to your house using tracked, insurable couriers.

Certain coins are free from Capital Gains Tax, with Sovereigns, Kruggerands and Maple Leafs being among the most popular. They’re more suitable for a smaller investment that is a bit more flexible as they are easier to sell in varying quantities, should you ever choose to.

[SPOTLIGHT]Bars may be more suitable if you want to make a bigger investment, as you'll pay a smaller premium over their intrinsic gold value than you do with coins. 

What the investor pays the broker is the spot price. The spot price is the current market price at which gold is bought or sold for immediate payment and delivery. Go for this over forward price, which is the price of gold can be bought or sold in future. You can keep an eye on live spot rates at BullionByPost.

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Where to store it

[SPOTLIGHT]Storage is important when investing in gold, depending on how much you’ve got and in what form. You’ve got a couple of options here: allocated storage or keeping it at home, most likely in a safe.

Allocated storage gives you greater peace of mind, but at a greater cost. With the Royal Mint, for example, it’s kept in a vault which is guarded around the clock by the Ministry of Defence. It does charge a substantial 0.5% of the gold's market value per year plus VAT though. BullionVault will store your gold for you for 0.12% a year and that includes insurance.

You could also go for floor safes, wall safes or hiding a safe in the attic or basement at home.

Though keeping it at home will cut the cost of your gold investment, you are taking a chance in case you are ever burgled. 

If you aren’t storing it in a secure facility, keep the number of people you tell to a minimum because you never know where the information might end up.

A final note about insurance: make sure you add it to your home insurance policy and that you value it accurately so that it’s adequately insured, meaning you’re less likely to be left out of pocket should the worst happen.

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