We take a look at the best ways to buy gold in the UK, as well as whether it’s a good idea.
Gold has just hit an all time price high – over $5,000 (£3,600) an ounce. Just two years ago it was under $2,000. But does that mean now is the time to buy or are we about to see an almighty collapse?
Owning some gold is something a lot of investors believe in, as the shiny metal has been a store of value for, quite literally, thousands of years.
But how do you go about it, what’s the best way to buy it, and where should you keep it?
More than that, is it actually a good idea in the twenty-first century, or do you have better options?
We take a look.
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Is gold a good investment?
Gold doesn’t rust and even if you leave it buried in the ground for decades it doesn’t tarnish or spoil. There’s also not a lot of it about and it’s expensive to mine.
That rarity and stability means it’s been used as a store of value since at least the time of the Pharaohs.
But it also doesn’t earn you any interest, it doesn’t pay dividends or make you money in rent.
That means the only way to make a profit from gold is to sell it to someone who’s willing to pay more for it than you did. The price is entirely based on demand.
However, there are two good things about the metal as an investment.
Firstly, the limited supply means that it’s seen as “inflation proof”. That is to say, even if the value of the pound in your pocket falls, or the government decides to devalue our money, the amount of gold in the world isn’t affected. So the price should rise in line with inflation.
The second good thing is that gold is seen by many as a “safe haven” in times of economic trouble. That means its value tends to increase when there’s a recession or economic uncertainty, while stocks and shares are falling or when inflation rises.
But keeping gold isn’t free – you either need to pay for storage, or pay for a safe place (plus ideally insurance) at home. Selling it isn’t free either, if you want the best price you’re likely to need to pay a broker.
Finally, there can be tax attached to any profits – depending on what sort of gold you buy (more on that later).
Ultimately, the decision to buy gold is a bet. You’re betting it will go up in value, or at least not fall that much, between when you buy and sell it.
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How to buy gold
The first question you need to ask yourself is whether you want to benefit from the gold price, or actually own the gold itself.
If you’re only interested in the price – the simplest way to get on the gold train is to buy shares in an ETF or ETC (exchange traded fund or exchange traded commodity).
This is where someone has bought a load of physical gold, and lets people buy shares in their holding. The price will rise and fall in line with the price of gold, the shares are easily traded and can be held in a general investing account or even a stocks and shares ISA or self-invested personal pension to avoid tax on any profits.
You’ll also get about the best price possible for the gold – although there may be a small trading fee and can be an annual fee attached for storage.
Just make sure the fund you buy into is legitimate and the the company you’re using to hold the shares FCA registered.
Examples of these funds include iShares Physical Gold ETC, Invesco Physical Gold A and the Royal Mint Responsibly Sourced Physical Gold ETC. You can buy these the same way you would buy any stock or share.
You can read our full guide to ETFs here.
Top Stocks and Shares ISA picks
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- Interest on uninvested cash 3.8%
- Flexible ISA Yes
- Foreign exchange fee 0.15%
- Fund fees If you invest in ETFs, you'll have to pay fund fees depending on the funds you choose
- Offer details To get the offer, you need to open a Trading 212 Stocks and Shares ISA or Invest account and deposit at least £1 within 10 calendar days
- Important details Remember, the value of any money invested, which includes your free share, could go up or down
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Our top pick
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Lightyear Stocks & Shares ISA
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- Annual fee£0
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- FSCS Protected? If Lightyear goes out of business and there is a shortfall in the funds they are holding for customers, they may be able to claim for losses up to the value of £85,000 through FSCS
- Transfer in existing ISA? Yes
- ETF trading fee £0
- UK shares trading fee £0
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Freetrade Stocks & Shares ISA
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- Fractional shares Yes
- Transfer in existing ISA? Yes
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- Foreign exchange fee 0.99%
- Fund fees If you invest in funds, you'll have to pay fund fees depending on the funds you choose
- Authorised and regulated by the Financial Conduct Authority Yes: FRN 783189
- Risk warning Capital at risk. The value of your investments may go up or down
Buying physical gold
Of course, buying stocks and shares somewhat defeats the purpose for many gold enthusiasts.
It becomes abstract and based on another company’s work. You can’t hold the gold in your hands – and one of the attractions of the metal is that it’s free from outside interference.
Governments can’t devalue it or print more, technology can’t fail, companies can’t go bust and no third party can interfere with your assets.
So what about buying physical gold?
Gold bullion
Rather than buy gold to keep at home, you can buy gold that’s already in someone else’s secure warehouse.
There will be a storage fee attached, and a slight difference in the price that the company buys gold for and sells it for. But the price will often be better than you would find yourself.
That said, it’s your gold. You own it and they just store it for you.
Companies like BullionVault, the Royal Mint (through its DigiGold service) and Bullion By Post offer this service.
Gold bars
If you want to hold the gold in your hands, or store it yourself, then gold bars are a decent option.
These come in a variety of weights, and are stamped to say what they weigh and as proof of their purity.
Buying gold bars has a few costs attached. First manufacture, second shipping and – finally – storage. Although the last of these is up to you.
It’s wise to consider insurance too, if you’re keeping it at home, although smaller amounts might already be covered by your home contents policy.
You can buy gold bars in a wide variety of weights from places including the Royal Mint, Bullion By Post and the Pure Gold Company.
Just be aware that if you sell the gold at a profit, that counts as a capital gain so you could have tax applied to it.
Gold coins
Gold coins have one large advantage over gold bars – if you’re buying UK currency, there’s no tax applied to selling them.
That means, as long as it’s a gold sovereign, Britannia or other coin made by the Royal Mint, you can avoid capital gains tax of up to 24% on sales.
Buying gold coins means you lose a little flexibility in the amount you can buy – although there is more than one size available – and they are a little bit more expensive than pure bullion thanks to their manufacture costs.
You have the same concerns over storage, postage and insurance as you do with gold bullion.
That said, beating capital gains tax is a big advantage when it comes to selling for any larger purchase. And, to be completely honest, they’re a lot more fun.
One point to note is that not all gold sovereigns cost the same, even at the same weight. Newer designs, commemorative coins and the like cost more than older ones.
If you’re buying them as a store of value – rather than as a collector’s item – look for the cheapest price for the weight possible.
At the time of writing, a Queen Elizabeth II memorial sovereign can cost £10 more than a 2026 King Charles III one, and both cost more than one from a random year.
Is buying gold a good idea?
James’ analysis
Traditional wisdom says having 5% to 10% of your investment portfolio in gold is a good idea – as it tends to rise in price when stocks and shares fall.
But, honestly, it’s a bet on the future. If you think times are getting worse or there’s instability ahead – gold can be a good idea. And it’s one that’s certainly proven lucrative over the past couple of years.
It can also be a fun gift for children or grandchildren.
But don’t forget that there’s no interest or dividends paid and no guarantee prices will rise.
While the past few years have been good for gold, there was a 20 year period when prices fell, and fell, and fell. Between 1980 and the year 2000 the price of an ounce of gold dropped from $670 to $260.
