How to buy gold bullion

For free and impartial information on where and how to buy gold bullion coins and bars, see our comparison of leading gold brokers here.

There are many ways to invest in gold, from exchange-traded funds (ETFs) to gold stocks, but the simplest way is to just buy physical gold – or bullion – outright. But what’s the best way to invest in gold bullion? We look at the options below.

Should you buy coins or bars?

You can buy bullion in two main forms: coins or ingots (bars). The advantage of gold coins over gold bars is that they allow you to be more flexible. After all, it’s easier to sell 20% of your gold if you own ten gold coins rather than if your whole investment is in one gold bar. By the same token, given this flexibility, you’ll probably find that coins are that bit more liquid (easy to sell) than big bars. That said, if you want to buy a sizeable amount of gold, then bars might make more sense from a practical point of view.

Investing in gold coins

There are all sorts of gold coins from the Chinese Panda to the American Eagle. Some coins are more expensive than others because they are rare, beautiful or antiques – these are known as numismatic coins, and they have value as collectibles over and above their value as gold coins.

But if you are simply looking to track the gold price, then ignore these numismatic coins and focus on those that offer the cheapest ‘premium’ over the spot price (this is the current price, the one you’ll usually see quoted on financial websites).

First produced in 1967, the one-ounce South African Krugerrand is the most common gold coin on the planet and so normally trades at the cheapest premium over the spot price. Other good options are the sovereign and the Britannia. Both of these are still officially UK tender (the Britannia has a face value of £100, for example), which means that if you sell them at a profit there is no capital gains tax to pay.

Regardless of how you buy your bullion, there is no stamp duty or VAT to pay.

How to buy

One key thing to consider is costs. Gold dealers make their money like anyone else – by selling for more than the market price, and buying for less. The difference (or ‘spread’) can range widely depending on the quantity and type of bullion you buy, as well as who you buy it from, and the current state of supply and demand.

The worst deals will come from the gold vending machines and ‘gold bars’ now popping up in shopping centres. The latter serve a market for people keen to turn cash into gold fast, but most investors should go nowhere near them.

Hong Kong is widely acknowledged as the cheapest place to buy gold coins. Go to Queen’s Road in Hong Kong’s Central District, and you’ll find well-known banks, such as HSBC, shifting gold coins for as little as 0.2% above the premium.

But given that a flight to Hong Kong isn’t cheap, the best option for most UK investors is to buy from large, established British or European dealers. They will deliver it straight to your house, through trackable insured couriers. It’s better to go with a well-known, large firm with a good track record. There are a range of options, but providers include Baird, ATS Bullion, Chards, and GoldCore.

For free and impartial information on where and how to buy gold bullion coins and bars, see our comparison of leading gold brokers here.

When it comes to selling your gold, you’ll find yourself at the wrong end of the gold dealers’ spreads once again. Depending on the dealer, you could find yourself getting up to 5% less than the market price.

How do I store my gold?

The benefit of owning physical gold is that you have it to hand if you are genuinely concerned about complete financial or societal breakdown. We’ve always described gold as insurance, and if you think things could get to the point where all financial assets are essentially worthless, then having access to gold coins would be useful.

The key problem with taking physical delivery is that you have to look after it. You will need to store it securely. A safe is the most obvious option, or outside the home in a bank safe deposit box. If you do store the gold at home, and you want it to be covered by your home insurance, you will of course need to tell your insurer. Depending on how much gold you have, this could potentially bump up your premium.

Buy gold online and have it stored for you

An alternative way to buy physical bullion, and have it stored conveniently for you rather than taking delivery of it, is via a website which allows you to buy gold online. One of the best known is British firm BullionVault. It offers the option to buy gold which is held in vaults in Switzerland, London and New York. It conducts a daily independent audit of its holdings, and will also allow you to take physical delivery of your gold if you so wish. A similar service is offered by James Turk’s GoldMoney.


34 Responses

  1. 11/10/2011, DoNutReply wrote

    Good advise, but a word of warning. Do you trust the government? They could change the rules tomorrow i.e capital gains, tax on selling gold etc.

  2. 11/10/2011, Steve wrote

    But what about deflation? If credit contracts, won’t prices fall? An article on the deflation v inflation debate would be welcome.

  3. 11/10/2011, Jon wrote

    …i thought that UK gains on all gold other than UK Sterling denominations are already chargeable to CGT ?

    And there’s also the sellers responsibility to notify HM Revenue & Customs of individuals buying investment gold.

  4. 15/10/2011, ktheking wrote

    Another warning : If buying/selling coins ,don’t buy or sell beyond a certain amount (depending what country you’re in). Doing this results in the company having to report the transaction. Thus in case things go bad,the governement can still trace the coin transaction to you. (I can say this applies for Belgium ,not sure about UK and other countries)

    Also buy your coins from well known source.Don’t go in dodgy shop.

    K.

  5. 17/10/2011, Nicholas Wilton wrote

    Atkinsons Jewellers are much cheaper than the people you mention, other than, perhaps, Bullion Vault. Also gold sovereigns do not attract capital gains tax because they are legal tender.

  6. 17/10/2011, Joy wrote

    Bullion Vault charge the smallest investor who can only afford to buy $5000 worth of gold 8 times the storage charge that they charge the larger investor who can afford to buy $1,000,000 worth of gold. This seems rather unfair!! Surely a flat rate of 0.392% PA would be much fairer in that the rich people would pay fees in proportion to their wealth?

  7. 18/10/2011, paul musgrove wrote

    Joy – it is quite fair for someone to get a discount for buying more of a product from a business. Why should “rich” people pay more? I think you should fly over to New York and join the protest with the other socialists. Their confusion stems from the fact that they do not know the difference between capitalism and a mixed-economy. You seem more of a hard-core lefty. If you are not stuck in your ways then you may like to read the book Atlas Shrugged by Ayn Rand. This should sort you out.

  8. 04/11/2011, janes wrote

    Paul – there is a vast ideological chasm between ‘lefty’ and finding that one aspect of business practice is unfair. Capitalist business practices can range from what seems fair to all to totally free market, depending on the company, the markets it aims for, and on factors such as how much a society likes to ensure that funds flow sufficiently through the hands of the less well off as well as those of the wealthy. The latter is not necessarily ‘socialist’. Try reading Adam Smith. That should sort you out.

  9. 02/12/2011, Paul Tustain wrote

    Joy – you’re being very misleading. On BullionVault a $5,000 holding costs $4 per month storage + insurance which is the minimum charge we apply. A $1m holding costs 25 times more at $100 per month. Many services have a minimum fee which reflects the minimum cost of providing the service. We gave you a free gram of gold worth $56 when you signed up. We incurred about $22 administration costs in setting up your account. These costs were the same for you and the $1m customer. On your purchase we charged you 0.8% commission on your $5,000 deal – that’s $40. more below…

  10. 02/12/2011, Paul Tustain wrote

    cont … The $1m customer paid 0.098% which is $980 commission. We incur ongoing storage and insurance costs which are just covered by your $4 so we will finally break even on your account after about 7 months. We are serious about extending accessibility to gold all the way down the retail investor scale, but reducing our very low prices still further would undermine our business. I regret that $4 per month minimum is the best we can do for the time being and hope that it does not break the bank! :)

  11. 02/12/2011, bob d wrote

    What about Perth Mint certificates ? how do you rate them and are they ‘safe’ in your meaning of the word?

  12. 17/01/2012, Ark wrote

    James, I looked and looked for Orchard Road in Hong Kong. Finally took out my GPS and followed the directions. It was quite a swim to get to Singapore…

  13. 17/01/2012, James McKeigue wrote

    Ark – fair point and well spotted. It has now been corrected. Thanks.

  14. 10/02/2012, David Peers wrote

    There is so much junk in this story.

    I am a bullion merchant based in Devon so the speculation of the readers and the misinformation in the article I can rate as accurate or not. And you are well out.

    Gold is, well, gold. You buy your gold from someone you trust. how would you buy a car? Would you pay a lot of cash online for something you haven’t seen? On the recommendation of another site? I doubt it so do your own research. Google for ‘bullion merchant’ or similar and then get on the phone. Even better, drive there and see if they have premises.

    Gold is gold and paper is not so your perth mint certificates are exactly that – bits of paper. Only gold is gold and the acid test is “Can I put my hands on it?” and if you can’t then all you’ve got is a contract.

    You’ll find me in Devon.

  15. 11/02/2012, Brown's bottom wrote

    If you are a UK resident you should only consider buying sovereigns or britannias as they are the only gold not getting taxed on the capital gains. The profits you save here more than offset any premiums initially paid which shouldnt incidently be more than 10%. Buy physical and store in a safety deposit box (not a banks box).

  16. 06/07/2012, Pete from Staffs wrote

    I wouldn’t worry about CGT unless your investing over £10k. If you’ve looking at a more modest investment then buy gold with the lowest margin – 1oz krugerrands are the perfect balance between flexibility and low margin.

    Spending over £10k, then yes capital gains tax free gold sovereigns and britannia coins all day, especially 1oz gold brits which have very low margins if you go to the right place. I’ve been building my british gold britannia stash for 3 years now. Recommended dealer would be bullionbypost .co.uk – large trustworthy dealers with free insurance and p&p. Can do everything online too, order online and get it delivered next day.

  17. 23/07/2012, acp1967live wrote

    There’s only one way to buy gold and that’s physical, not etfs which simply bet on global spot price of gold. If you don’t hold it you don’t own it. UK’s top bullion dealer: http://www.bullionbypost.co.uk/ Been using their guys for 3 years.

  18. 16/08/2012, John A wrote

    All very useful, thank you. Where do you go if you want to sell the stuff in the future?

  19. 05/09/2012, Marksheff wrote

    Bullionbypost will buy the gold they sold you back @2% less than the spot price, seems good to me.?

  20. 25/09/2012, larry wrote

    My understanding is counterfeit gold, coins especially, has become so sophisticated it is hard to detect. Any advice out there?

  21. 25/09/2012, Moderator wrote

    Larry – you may be interested to read “How to spot fake gold”, written by Matthew Partridge earlier this year – http://www.moneyweek.com/investments/precious-metals-and-gems/gold/how-to-spot-fake-gold-tungsten-58127

  22. 14/10/2012, S jones wrote

    been investing in shield back sovereigns for last 3 years had to sell a few recently but only got scrap prices for them put some on eBay and had to pay 10 percent fees so getting just a few pounds more than scrap ,anyone know where to sell shield backs at a fair price?

  23. 23/10/2012, Rupert wrote

    I am a collector of silver coins and I started with commemorative silver coins on both commonwealth and American contemporary designation. Gold bullions are out of my price range.

  24. 24/10/2012, Ali Johnson wrote

    At least I know a few tips on how to save up for my upcoming wedding in long island. This will make things a little less harder for me .

  25. 24/10/2012, Ali Johnson wrote

    At least I know a few tips on how to save up for my upcoming wedding. I’ll have to get some of the finest long island jewelers too. This will make things a little less harder for me .

  26. 15/11/2012, Baylor wrote

    Here is the definitive guide on buying silver bullion uk for beginners. Silver bullion is less risky compared to gold bullions.

  27. 24/12/2012, Jay wrote

    Baylor, been doing some reading myself… great place to start your research is the gold buying guide on the bullion by post site: http://www.bullionbypost.co.uk/info/how-to-buy-gold/

  28. 20/01/2013, Invest In Gold wrote

    Thanks for this wonderful post and hoping to see more of this.

  29. 10/02/2013, Invest In Gold wrote

    Thanks for this wonderful post and hoping to see more of this.

  30. 09/03/2013, JayK wrote

    Baylor, could you re-post the link for the definitive guide to buying silver bullion for UK investors? I’ve just come across these posts so hope you are still logging on to see this! Thanks, Jay

  31. 14/03/2013, Chris Wilkins wrote

    Our current belief is that Gold and Silver prices may bottom here for the shortterm. Buy physical gold and silver bullion, not ETFs.

    Sell Gold Silver NC

  32. 23/03/2013, Funny Mint wrote

    I’m looking at the generic or standard investment in 1 oz gold coins. How can I tell if it’s cheaper in the UK or from somewhere else? I have family members in other countries, to who I can transfer money for them to buy it for me. They have referenced some prices to me but I don’t know the best source of reference for the price of a gold coin in the UK. Your suggestions will be greatly appreciated. Thanks.

  33. 16/07/2013, JohnS wrote

    As with any investment, speculation or purchase it makes sense to average in. This basically means that you shouldn’t buy everything at once. By spreading your purchases over a longer period of time your average will typically be lower than if you would get into the market all at once.

    read an article about spreading deposits here: https://www.saveguards.com/en/news/gold-and-silver-accumulation-benefits-spreading-your-deposits/

  34. 21/09/2013, BULLIONBOY wrote

    I called bullionvault a few days ago…..not impressed.
    1st, unless you are super rich and can afford a full 400oz bar to yourself, you’ll get a share of a 400oz bar. I asked if I bought 100g, can I take delivery.
    Short answer was yes….BUT it’s very expensive, not practical with fees galore and it takes ages as they source a 100g bar for you. It sounded like they were trying to talk me out of thinking about buying and taking delivery. Not saying the gold isn’t there……..it’s just not exactly yours in a shtf scenario. Stick with the real physical that is 100% yours. Bullionbypost have great info on their site……but since the idea is to buy as cheaply as you can, I’ve started using https://www.purametal.co.uk for my cgt free coins, cost averaging end of every month….in theory I try to anyway.

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