How to Buy Gold in UK – List Few Effective Ways to Buy Gold

Investing in gold can be a good way to add stability and diversification to a portfolio, which is especially important in the current economic environment of high inflation and volatile stock markets.

The following is information that you need to know in order to purchase gold in its physical form.

Keep in mind that investing in a stock market fund or in a commodity such as gold is inherently risky, and that doing either of these things puts your capital at risk. Gold is an example of a commodity. It is possible that you will not get any of your money back, or even all of it.

How exactly is gold priced?

Gold is valued based on its degree of purity as well as its overall weight. After that, the value is calculated by multiplying this by the current spot price of gold.

The price of gold is determined twice a day on the London Bullion Market in order to bring together buyers and sellers or, to put it another way, to strike a balance between supply and demand.

  1. What factors determine the level of gold’s purity?

As a result of the addition of other metals and alloys by the manufacturers, not everything that glitters is necessarily made of gold.

The amount of gold present in a piece of jewelry is expressed in terms of carats. The number of carats, which can range anywhere from zero to twenty-four, is frequently stamped on gold.

The higher the carat, the greater the proportion of gold present in comparison to other metals such as copper, silver, or palladium. Carats range from 24 to 24 carats. Gold that has a carat rating of 24 is considered to be completely pure.

  1. What factors determine the exact weight of gold?

To further complicate matters, the standard method for determining the weight of gold is not one of the more common traditional measures, but rather the “Troy” measure. A Troy ounce has a weight of slightly more than 31 grammes, which is equivalent to approximately 1.1 ounces of UK imperial measurement.

Although its gold bullion bars are now priced by the gramme, the Royal Mint will continue to sell gold coins that are measured in Troy ounces.

How can you get your hands on some physical gold?

You can acquire actual gold from precious metal dealers, banks, or jewellers, and purchase it in the form of bullion, coins, or jewellery.

  1. Bullion bars

Gold bullion bars, which are typically depicted being stacked in bank vaults, can range in weight anywhere from one gramme to more than ten kilogrammes. The bars have a stamp on them that indicates the weight and the level of purity.

Although it is one of the primary sources of bullion bars in the UK, the Royal Mint does charge a premium above the “spot price” of the gold in order to cover the costs associated with manufacturing as well as any other associated expenses.

If you are interested in purchasing 24-karat bullion bars from The Royal Mint, the prices currently range from £80 for a one-gram bar to over £49,000 for a one-kilogram bar. This price range is based on the weight of the bar.

  1. Gold coins

Gold bullion bars typically have a higher percentage of gold compared to gold coins. The Britannia and the Sovereign are the two most famous gold coins to have been struck by the Royal Mint in the United Kingdom.

These coins, which are made of 22-carat gold and feature a portrait of Queen Elizabeth II, have a weight that is expressed in troy ounces. There is also a double sovereign coin, which weighs 0.5 Troy ounces and can be purchased from The Royal Mint for the price of £750. Other options include a quarter sovereign coin, a half sovereign coin, and a double sovereign coin.

Britannia: these 24-carat coins feature an image of Britannia and are available in Troy ounce measures ranging from a tenth of an ounce all the way up to a half ounce. At the moment, a coin weighing one troy ounce from The Royal Mint will set you back £1,590.

Since both coins are considered legal tender in the UK, residents of that country do not have to pay capital gains tax or value-added tax on them.

Commemorative coins are also produced by the Royal Mint, with the Who 24-carat one-kilo coin being the most expensive of these coins, with a current retail price of more than $73,000.

The same tax advantages apply to commemorative coins as they do to Sovereign and Britannia coins; however, because they are not considered to be “circulating,” financial institutions and businesses are not required to accept commemorative coins as legal tender.

There is also a market for historic coins as collectibles on a global scale, and these coins typically fetch a higher price than the value of the gold they contain. The 1933 “Double Eagle,” which was one of the final gold coins to be minted in the United States, was sold at auction for $19 ($16) million in the previous year.

Other well-known gold coins that weigh one troy ounce are the American Buffalo (in the United States), the Maple Leaf (in Canada), the Krugerrand (in South Africa), the Gold Nugget (in Australia), and the Gold Panda (in China) (China).

  1. Gold jewellery

Another way to acquire gold is through the purchase of jewellery, particularly antique pieces. On the other hand, just like with gold coins, the price you pay will typically include a markup relative to the amount of gold it contains.

This mark-up, which typically ranges from 20% and up and frequently goes much higher depending on the manufacturer, compensates for the labour costs associated with the design and manufacture of the product as well as the retail margin.

If you know the weight and carat of the gold as well as the current spot price, you should be able to figure out how much of a markup there is on this price. Having said that, there are some jewellery stores that avoid advertising the weight of their wares because of this reason.

For illustration purposes, the suggested retail price of a luxury designer brand’s 18-carat gold wedding ring is $1,570. The current value of the gold content is £240, which means that you are paying a markup that is over 6 times higher than the cost of the item to account for the retailer’s profit and the value of the craftsmanship.

In comparison, an 18-carat gold wedding ring can be purchased from a retailer on the high street for the price of £350, which represents a markup of two-thirds on the underlying value of the gold, which is £210.

If you are considering making an investment in jewellery, you should keep any documentation from the sale of the item, as this will make it simpler for you to resell the item in the future.

Physical gold.

If you are interested in making an investment in gold, purchasing physical gold in the form of bars or coins is a good place to begin. When it comes to purchasing gold bars, you have a number of different options available to you. The Royal Mint is responsible for the production of some of the most well-known bullion gold coins in the world.

Due to the fact that the Royal Mint British Britannia and the Royal Mint British Gold Sovereign are the only gold bullions that can be used as legal tender in the United Kingdom, purchasing gold coins like these has become increasingly popular. As a result, they are not subject to the Capital Gains Tax (CGT).

You also have the actual gold bullion in your possession, which is another significant benefit of this transaction. The use of these coins or bars grants you full control over the management of your investment. Keeping this in mind, you should always give serious consideration to the location in which you keep your gold coins or gold bars, as doing so may expose you to a safety risk.

Gold bullion bars can be found in a wide variety of shapes and sizes, and some of them can even be purchased online from reputable dealers under names like “bullion by post” for instance.

You can purchase actual gold and silver in the United Kingdom from a gold coin dealer in your neighbourhood, or you can do so from one of the many well-established and trustworthy online gold bullion dealers. These dealers can ship gold bars or coins directly to your home.

There is a day-to-day swing in the price of gold. When taking into account the fact that the price of gold fluctuates on a daily basis, buying and selling physical gold presents a slight disadvantage due to the fact that it is more difficult to do so in a timely manner. The majority of gold investors believe that purchasing gold in the form of bullion is a better long-term strategy.

Online dealers.

A potential source of anxiety for investors is the prospect of having to personally store gold or silver bullion. An additional method for investing in gold is to do so through the services of an online bullion dealer. This type of dealer may give you the option of keeping your gold in a safe vault, from which you can buy and sell it whenever you need to.

Due to the fact that the buy/sell rate is closer to the current spot price, this can be a potentially more cost-effective way to own gold in the UK.

There will probably be the obvious fees associated with storage and insurance, and you need to be aware of the rules regarding any potential capital gains tax liability associated with the investment.

Gold ETFs.

ETFs are traded in the same manner as shares of stock. These follow the price of gold and are typically a more liquid way for investors to buy gold based on the spot price. The gold price is tracked by these.

ETFs involve various broker fees. When considering this choice, it is in your best interest to carry out some background research first. The financial products known as ETFs, ETCs, and ETNs are extremely complicated and typically contain a lot of lengthy legal jargon. Because of this, you need to consider every possibility before making an investment.

Putting money into gold is a matter of individual choice. It is entirely up to you to decide which of the available options you believe will benefit you the most. While some investors favour the tangible bullion in their possession, others favour investing in gold as a means of diversifying the holdings in their existing portfolio.

Some people want to trade more, so they are more interested in the daily spot price rather than the long-term investment or safe haven aspect of buying gold in the UK, which is why many investors do so. Gold is an excellent asset for diversifying any investment portfolio and can be held in the form of bullion bars, coins, storage, or exchange-traded funds (ETFs).

Through its website, BullionVault, individual investors from all over the world are given access to the professional bullion markets. You will incur the fewest expenses possible when purchasing and selling gold and silver, as well as when storing them.

Factors to consider when buying gold

If you choose to acquire gold in its physical form, there are a few things you will need to keep in mind.

  • Gold in its physical form needs to be stored in a secure location, which should ideally not be your own home. When storing it, you should keep it away from wetness, corrosives, and metals like silver that can cause it to tarnish. There is a fee associated with using the storage facilities of a third party. For instance, the Royal Mint levies an annual fee of 1% plus VAT for the use of its vault, and this fee is calculated based on the value of the gold stored there (based on the spot price).
  • Insurance: If you choose to keep your gold at home, you should check to see if the storage of valuables is covered by your homeowner’s insurance policy. In a similar vein, if you are going to use the storage space of a third party, you need to make sure that they have adequate insurance.
  • When it comes to the provenance of the gold you intend to purchase, it is essential to do business with a trustworthy dealer. As was just mentioned, one choice is to purchase bullion bars or coins directly from The Royal Mint. This was mentioned earlier. If you are interested in purchasing from a different source, you should know that members of the British Numismatic Trade Association are required to abide by a strict code of ethics.
  • Value is determined by the amount of pure gold that is contained in the item, whether it be a bar, coin, or piece of jewellery. A high carat is preferred because it contains a higher proportion of gold and is less likely to tarnish. A high carat is defined as 21 carats or higher. Having said that, gold with a higher carat number is less durable than gold with a lower carat number, and it requires more care to be taken so that it does not become scratched or damaged.

Other ways to buy gold

When purchasing gold in its physical form, it can be challenging to verify the metal’s authenticity, find a secure place to store it, and resell it later. Rather than having to deal with the complications of directly owning gold, investors who choose to invest indirectly may be able to benefit financially from an increase in the price of the precious metal.

Keep in mind that investing in funds or directly in shares exposes your capital to risk, and you run the possibility of getting back less money than you invested or losing all of your money entirely.

So, what are the different ways that one can invest in gold? The following is a brief summary:

  • Investing in gold and commodity funds is one way to gain exposure to the gold market. You can gain exposure to gold by purchasing mining, commodity, and exchange-traded funds (ETFs). These include exchange-traded funds (ETFs) that directly track the price of gold and other precious metals as well as mutual funds that invest in gold mining companies.
  • Purchasing shares in gold mining companies: over the course of the past year, businesses that mine gold have seen their profits soar thanks to the rise in the price of other commodities. BHP Group, Rio Tinto, and Glencore are examples of companies that are involved in mining. Additionally, they offer the possibility of income to shareholders through the traditionally high dividend payouts that they make.
  • Any profit or capital gain made from investing in gold, whether directly or indirectly, will, just like profits made from investing in other assets, potentially be subject to taxation on capital gains (CGT). However, since Britannia and Sovereign coins are considered legal tender, the CGT does not need to be paid on them. This was covered in the previous section.

For the current tax year 2022/23, the capital gains tax allowance (CGT allowance) that each individual is entitled to is £12,300. This allowance represents the amount of profit that can be made before additional taxes are owed. However, capital gains tax is not levied on investments based on gold (such as funds) that are held within an individual savings account or self-invested personal pension plan by the account holder.

Is gold a good investment?

You’ve probably come to the wrong place if you’re looking to get rich quick in a gold rush that takes place in the modern day.

Although the price of gold has gone up by 45% over the past decade, the FTSE 100 index has gone up by 58% during the same time period. The question is, why all the fuss?

Gold is the answer to the question of what to do in times of economic instability. Gold is seen by some investors as a haven of safety during times of stock market volatility, as well as a means of wealth preservation in times of high inflation.

For example, during the bear market that lasted from 2007 to 2008, the FTSE 100 fell by 44%, while the price of gold rose by more than 90%. Caution is warranted, however, because despite the fact that the price of gold typically increases during periods of falling stock prices, this has not always been the case historically.

Because of the erratic nature of gold price fluctuations, investing in gold is not a foolproof strategy. If you want some of that golden gleam to shine through in your investment portfolio, you should aim to have it make up only a small percentage of your total investments.

Your investment in gold, like any other type of investment, could go down in value as well as up, and you might not get any of your money back. Seek the assistance of a financial advisor if you are uncertain which choice is most appropriate given your unique set of circumstances.

Should you put your money into gold?

In an environment marked by high inflation, gold may provide investors with both a secure haven and a means of protecting their wealth. The price of gold is highly unpredictable, much like the price of shares; however, over the course of the past three decades, its value has been steadily climbing.

You have the option of investing in physical gold, mining shares, gold-based funds and exchange-traded funds (ETFs), or gold itself, depending on your preferences and level of risk tolerance. However, it is essential that any investment in gold be included as part of a diversified portfolio in order to maximise returns.

Purchasing gold and including it in your portfolio can be a powerful way to add a strong element of stability, particularly during times when the economy is volatile.

The value of precious metals, and gold in particular, is believed to be unaffected by the performance of other investments, and may even go up.

Because of this, gold has even been considered something of a growth asset in recent years, despite the fact that traditionally speaking, it is not considered to be one.

Owning gold as an alternative investment carries with it an undeniable allure, made all the more alluring by the fact that you are free to take physical possession of the bullion if you so choose.

What follows is an explanation of one of the earliest types of financial investments.

What affects the price of gold?

When there is uncertainty or negativity in other areas of the market (such as equities and bonds, or the economy in general), the price of gold tends to rise. On the other hand, the price of gold tends to fall when growth is strong in those other areas of the market. This relationship is by no means a given, but it is, in general, the reason why most gold investors hold this asset – to protect themselves against losses in other areas.

Other factors that may cause an increase in the price of gold include:

  • Demand from consumers – is it being purchased more frequently for uses such as jewellery?
  • Gold prices typically have an inverse relationship with interest rates, so when rates are low, gold prices tend to go down.
  • Weakening US dollar
  • A low supply, which causes prices to rise even if more gold is recycled.
  • Instability in geopolitical relations

Natural occurrences, such as prosperous monsoon seasons, have the potential to drive up the price of gold because the economies of the nations most directly impacted will likely increase their gold holdings in response.

Naturally, the opposite of any of the aforementioned factors will have the effect of bringing down gold prices.

How exactly do you price gold?

Accordingly, the price of gold can either increase or decrease depending on the state of affairs in the world. Who exactly determines the prices, though? The price of gold is determined by consensus reached between a number of banks, an oversight committee, and a panel of chair members drawn from both inside and outside the industry.

What is the distinction between gold that is allocated and gold that is not allocated?

In a nutshell, allocated gold is defined as physical bullion that is held by a specific individual. Owning allocated gold is the only way to legitimately own bullion. Because the price of allocated gold is not dependent on the price that banks give it, it is the most risk-free investment possible. Purchasing allocated gold is the most authentic approach to investing in this commodity; however, doing so may require you to incur slightly higher costs associated with its storage.

Unallocated gold is a form of gold that pretends to be an investment. Buyers of allocated gold are essentially acting as investors in the bank and are entitled to premiums in return for their purchases because the gold continues to be the property of the bank and is backed by the reserves of the bank. This is by far the most common way that money is invested in gold all over the world.

What are the pros and cons of gold as an investment?


Gold, along with other precious metals, is thought to be resistant to inflation because it is able to maintain its relative value for hundreds or even thousands of years. This belief is shared with other precious metals.

Throughout history, gold has served as a “economic lifeboat” in countries that have suffered from the collapse of their currencies and/or stock markets. You are able to protect the wealth that is stored in the gold so long as you are able to physically remove it from the country. Obviously, if the gold is kept as an investment in a foreign country, then there is no need to physically relocate it.

Another advantage of precious metals is that they can occasionally be worn in the form of jewellery, which means that you can derive a benefit from them on an ongoing basis. Because it is less secure, gold held in the form of jewellery will, of course, require a higher level of insurance.


Gold is not an especially dependable source of growth when compared to the stock market. Even though its price has been on a more consistent upward trend in recent years, the returns it offers still do not even come close to those offered by equities.

As a point of reference, in the year 2012, both the FTSE and the price of gold were at highs and exhibiting strong performance. However, gold that was purchased in 2012 would have approximately the same price today, in the year 2020. (and would have been less valuable if you had sold it at any other time in the past eight years).

On the other hand, the value of a diversified portfolio of FTSE 100 shares that was purchased in 2012 would have increased by approximately 8.5% over the course of those eight years, despite the two separate crashes that were caused by the Brexit referendum and the coronavirus lockdown.

To summarise, the purchase of gold is not always motivated by the desire to increase one’s financial standing. Gold is something you purchase because you don’t want to risk losing it.

Is it wise for me to put my money into gold?

If you are new to the market, it is unlikely that this type of investment will be the best strategy for you, as it will not allow your money to grow as quickly as you would like. You will not receive any income from rent or dividends, in contrast to the case with other asset classes such as shares or real estate. And despite the fact that the risk profile of precious metals is low, the price volatility of stocks means that you run the risk of incurring losses if you buy or sell at the incorrect time.

However, precious metals have a propensity to keep their value over the course of a longer time period. Because of this, individuals typically incorporate them into their investment portfolios in order to diversify their holdings and act as a hedge against both short-term economic downturns and political uncertainty.

Do you have to pay value-added tax and other taxes on gold?

Although the purchase of most bullion in the UK is subject to VAT, the purchase of gold bullion is not. When you purchase gold bullion in the United Kingdom, you won’t have to worry about paying any additional VAT price hikes.

The profits made from any asset that has increased in value are subject to a tax known as the capital gains tax. There is a yearly allowance of £12,300, but once you accumulate profits that are higher than this, you will be required to begin paying capital gains tax (CGT). Gold investments are subject to taxation in this manner.

How can I make a profit investing in gold?

There are a variety of approaches to investing in gold, some of which are relatively approachable even with more modest sums of money. The following is a list of the most frequently encountered choices:

Physical gold bullion

You might want to consider purchasing physical gold bullion, coins, or jewellery if you have a significant amount of capital to put to work. You can buy precious metals from dealers, brokers, and banks; however, it is imperative that you do business with a reputable source in order to ensure that the precious metals you purchase are authentic.

There are two primary coins in circulation in the United Kingdom: the Britannia and the Sovereign. It’s possible that there won’t be any capital gains tax on it at all if you choose the right coin. If you go this route, you should definitely get some professional guidance before making any decisions because the value of the coin is determined by its weight, its design, and the date it was minted.

Storage is another important factor to think about when dealing with physical gold. You will also need to factor in the costs associated with the insurance and the storage facility. You also have the option of paying a dealer to keep it for you in their storage facility; however, this will also be an expensive option.

Trading through The Royal Mint

The Royal Mint will sell you physical gold bullion, which you can either take delivery of yourself (and store in any manner you choose) or store in the Mint’s own storage facility, which is known as the Vault. If you choose to take delivery of the gold bullion yourself, you can store it in any manner you choose. This entails a storage fee, which is typically calculated as 1% of the value of the gold plus VAT per year. When purchasing gold, going through the Mint is the most dependable option (i.e. you can be sure that the gold is legitimate and properly stored). One potential drawback is that as a result of this, the cost might be higher compared to that of other sources.

Exchange-traded Commodities (ETCs)

Exchange-Traded Commodities (also known as ETCs) are essentially the commodity equivalent of Exchange-Traded Funds (also known as ETFs). They are traded like shares on investment platforms and are typically much more cost-effective than purchasing physical gold.

You typically keep them in a stocks and shares individual savings account (ISA). To buy or sell using a platform, you will be required to pay a fee; however, you will not be required to pay for storage or insurance of your items.

The ETC monitors the price of gold by either keeping physical gold in a secure vault or by purchasing goods that are related to the precious metal (which can be riskier).

Gold mining and distributing shares

You could also consider investing in companies that are a part of the gold industry, such as those that are involved in mining, production, refining, or distribution of the precious metal. Given the size of the market, there is a diverse range of options available to consumers. Because you are investing in businesses that will pay dividends, the potential returns may be higher than those associated with purchasing physical gold; however, this strategy also involves higher levels of risk. Shares in gold mining companies will have their prices determined by factors such as the demand for the product, the costs incurred by the company, and the price of gold in and of itself.

Personal pension with self-management of investments (SIPP)

If your pension is of a specific type known as a SIPP, you can even keep gold in it as an investment option for the future. Investigate the possibility of including gold in your retirement plan.

You can learn more about SIPPs by looking through our selection of the very best SIPP accounts that the market has to offer, which can be found here.


The Royal Mint is the proprietor of the precious metal purchasing platform known as Digital Gold. You can buy a wide variety of metals, including gold and silver, by creating an account on our website and logging into it. You can begin making purchases at the price of £25, and every purchase you make will be supported by a real, physical bar.

Why Invest in Gold Through an Independent Financial Advisor?

You can choose to go it alone and invest in gold by using an execution-only platform, which will charge you a nominal fee in exchange for the service. However, this is really only a viable choice for you if you have previous investing experience and are confident in your ability to analyze the gold price market.

If, on the other hand, this is your first attempt at investing in precious metals, you might find it more beneficial to work through an independent financial adviser (IFA). They will provide you with access to the market and will be able to manage the process on your behalf.

Even more importantly, they will be able to give you advice on whether or not purchasing gold is truly the best choice for you, explore the other options with you, and assist you in determining how much you should invest if you do decide to go through with the purchase. If you are interested in ethical investing, they can also explain the benefits and drawbacks, measured in terms of environmental, social, and governance (ESG), of each potential investment.

If you found this article to be interesting, you might also be interested in another one of our articles, which compares investing in a pension to investing in real estate.


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