Gold – physical, tangible gold – is an asset that resonates deep in the human psyche.
Ironically, given it is the solidity of physical Bullion that is the source of its appeal. The whole notion of gold bars and ingots, of gold coins, of “gold you can hold”, has assumed almost mythic proportions.
Something similar could be said for the finest gemstones, diamonds in particular. But there is a very big difference. No two precious stones are exactly alike, there is no “standard”. By contrast, gold bars and coins are produced to an identical weight and quality, like the “London good delivery bar”, which has to consist of at least 995 parts per 1,000 fine gold.
The standard is guaranteed, and this means the buyer can purchase with confidence.
Gold can also be sold back into the market with equal confidence. While there is no guarantee of getting back precisely what was paid, the pricing of gold is a model of transparency, with prices published daily in newspapers and on news websites.
Furthermore, there is a competitive market in both the sale and purchase of gold. If you don’t like one price, you can always try somewhere else.
The ultimate store of value and wealth
Gold Bullion is the ultimate store of value for both electronic and physical buyers, but for the latter group gold is also the ultimate in liquidity, able to be transported at a moment’s notice and acceptable anywhere in the world. Here is a world currency that needs no clearing system or credit-card readers. Physical gold combines security with portability.
As to the choice between gold bars and Bullion coins, there ought to be no great difference in price, although larger bars tend to be better value than smaller ones. Commemorative coins will, however, cost more, reflecting the craftsmanship involved.
Buying gold coins in the UK has an edge in terms of tax advantage. The Sovereign, gold & silver Britannia, Queen’s Beasts and Lunar Bullion coins are exempt from UK Capital Gains Tax (CGT) for UK residents only, due to being legal tender.
The Sovereign, gold Britannia, gold Queen’s Beasts and gold Lunar Bullion coins are VAT free for non VAT registered private individuals.
The enhanced appeal of gold
As we emerge from a period of turbulence in which banks have collapsed and governments have seemed almost overwhelmed by events, it is unsurprising that physical gold has retained and enhanced its appeal.
There is something about holding Bullion in the hand that has universal appeal. Centuries after the invention of paper money, decades into the reign of plastic cards and at the dawn of a new era of “contactless” payments, the touch and feel of gold retains its enduring appeal.