How to Invest in Gold for Beginners

Do Your Homework!

The most important aspect by far for anyone wishing to start investing in gold is to do your research. Take time to shop around, ask questions and read up on all the different products. A well-informed decision should shield you from any nasty surprises in the future.

Consider aspects such as why to choose gold, price premiums, hidden costs like “free postage”, tax and VAT status, reselling options and the reputation of the business/individual when looking into gold products.

Occasionally we do unfortunately hear horror stories from customers who have got ripped off by dishonest business practices which would make a second-hand car salesman blush. Even worse are the scams on eBay, where unfortunate consumers have been sold fake gold items with no repercussions to the seller. We cannot over-emphasise this point to consumers, be vigilant when investing and do your homework!

Budgets and Timeframes

It makes sense to start small and gradually build if you are starting your gold investment portfolio. Gold investment products come in many different shapes and sizes. Small gold coins such as Sovereigns and half Sovereigns are more affordable than for instance, a 1 oz Britannia, as are small gold bars like these one gram and five gram options. While the premium on smaller gold items may be greater compared to larger gold products, they still represent an inexpensive way to begin investing in gold.

Maximising Your Returns With Gold

Our advice usually follows when purchasing gold items purely for investment purposes, you should compare premiums and try to get the most metal for your money. Whilst this may initially lead to bars over coins due to the premiums involved, there is an additional consideration of capital gains tax to factor in, with UK pound sterling legal tender bullion coins avoiding these extra costs.

You can also make savings at the initial point of investment by taking advantage of quantity breaks and buying in bulk to achieve lower premiums. Additionally, whilst fractional coins such as Sovereigns or 0.5 oz bullion may have a higher premium when purchasing, they can carry higher liquidity and allow you to make more specific returns on your investment when needed, something not possible if only investing in large items such as 1 kg bars.

Diversifying your portfolio across products is key to retaining liquidity and making sure your gold works best for you.

Investment Calculator

If you're looking for a starting point in your investment journey or just want to see how far your money will take you, check out our Investment Calculator. 

The calculator is simple and easy to use, just enter the desired amount your would like to spend and it does the rest of the work, giving multiple options across lowest premium coins, CGT-exempt products and more!

Make Gold Part of a Diverse Investment Portfolio

We can offer basic investment information for those who are interested, and we like to keep any information we give as simple as possible. It should not come as a surprise to anyone that we advocate gold coins and bars as investment assets, but only a fool would invest in only one type of asset. Gold is a great way to start your investment portfolio but be sure to include a wide range of assets over time to spread out risks. 

Identification Requirements

As per money laundering regulations issued by HMRC, we are obliged to ask for two identity documents from anyone purchasing investment gold, so remember to have identity documents handy when looking to buy gold. Generally speaking, the more money is spent, the more checks that need to be fulfilled. Be careful when buying or selling gold to pawnbrokers who may not be fully in tune with the law; we at Chards are fully compliant with regulations set down by government and as such are fully transparent with our buying and selling prices.

You might not get a fair deal from a pawnbroker, but you will definitely get fair deals from us. We do however appreciate that asking for “proof of identity” can be incredibly frustrating and intrusive. In the past, we used to be able to sell 1,000 gold sovereigns for £3,500 and accept payment in cash, with no need to record the buyer's name or other contact details. We would advise those who object to these compulsory “ID checks” to give their elected representatives an earful. After all, why should the government need to know which private law-abiding individuals are purchasing gold?