Going for Gold – Part 11, 2023 Update

200th Anniversary of the Sovereign

Since my last ‘Going for Gold’ article I have been asked, from time to time, for advice about the best type of gold to buy and where I would recommend buying it from.  I will attempt to answer those questions in this article – before I do I will say this – it’s your money you are spending and I can only offer my recommendations.  Ultimately you must do what you feel is best for your circumstances.

“What type of gold should I buy?”

It rather depends on what you are buying gold for.  I have written this article with an assumption that you want to convert FIAT money into gold as a method of storing wealth and for this I would recommend bullion sovereigns or bullion Britannia coins.  Please note that I deliberately specified bullion as both these types of coins can be bought in proof quality.  Proof coins are more for the collector market and I would not recommend them as a store of wealth.

Sovereigns can be bought in various forms; quarter sovereigns, half sovereigns, full sovereigns and double sovereigns.  Typically, you will pay a premium for anything other than a full sovereign and my recommendation would be to stick with the full sovereign for the best value.  They are also easier to sell when the time comes.

Similarly, Britannia coins come in various forms; 1/10th ounce, ¼ ounce, ½ ounce and 1 ounce.  Again, I would recommend the full ounce as offering the best value, but of course all this will be dependent on your budget.

“Why do you recommend Sovereign and Britannia over other types of gold?”

There are two answers to this question:-

  1. You do not pay VAT on gold purchases
  2. Sovereign and Britannia coins are legal tender and are not subject to Capital Gains Tax

It’s perfectly fine and acceptable to buy gold bars or other types of gold coin but you will lose the benefit of zero CGT if you chose to go down that route.

“Why don’t you recommend buying silver?”

For many people silver is a good choice for purchasing precious metals because it is considerably cheaper than gold.  The downside is that it is subject to VAT so you automatically lose 20% of the value of your purchase (although in practice this is not the case if you can find the right buyer to sell silver to when the time comes around).

Owning some silver probably isn’t a bad idea (just in case the price of silver increases considerably or if SHTF you can swap some silver for something you need) but it comes down to personal choice.

“Where can I buy Sovereign and Britannia from?”

You’ve probably seen adverts on TV from various bullion dealers.  Personally I wouldn’t use any of them as the cost of their adverts has to be paid for somewhere (e.g. by the customer) and there are other dealers offering better value for money.

My personal recommendations (based on prior experience) would be any of the following:-

Remember when comparing prices that some companies include shipping in the price quoted and others do not.  Also, when buying more than one coin most companies offer a discount the more you buy.

I have no association with any of the above companies and other bullion companies are available.

One other place I can recommend for purchasing gold (or silver) is the Silver Forum (https://www.thesilverforum.com/).  It’s a place where private individuals can buy and sell gold from and to each other.  It’s free to sign up and sellers advertise their coins for sale on the market place.  I’ve bought and sold many coins here and never had a single issue.  The forum works on trust and in two years of being a member I’ve never known of anyone paying for an item that failed to arrive or was proven to be a fake.  However, unless you know what you are doing I would not recommend this to someone new to buying bullion.  The main advantage of The Silver Forum is sellers often undercut dealer prices, giving you the best value for your money.  If there is enough interest I can write a separate article on The Silver Forum with hints, tips and recommendations for buying and selling.

“Will there be a new Sovereign design in 2023?”

The short answer is yes.  King Charles will replace Queen Elizabeth on all versions of the Sovereign from 2023 on.  It is also likely that the reverse of the Sovereign will feature a different design from the Pistrucci George & Dragon design that sovereigns usually have.  As soon as I have any news I will be sure to let the Puffins on GP know.

“Will the price of gold change this year?”

Yes.  It could go up or down……

At the time of writing this article an ounce of Gold is £1,543 – the highest it’s been for several months.  Before the Ukraine / Russian war kicked off gold was trading about £1,350 an ounce.  It increased to over £1,500 in short order and has hovered between £1,450 and £1,550 since then.

Some Puffins may recall I posted a link at the end of 2021 for the (then) new 2022 bullion sovereign available from Harrington & Byrne for £329.  That same sovereign is now worth at least £400, representing a 17.5% increase in just over a year.  Not bad…  But, that sort of increase is far from usual and the value of gold could easily fall back again.

My personal prediction is that gold will reach new highs this year, maybe even beaching £1,600 an ounce, before drifting back to the £1,400s.

That’s it for this article.  If any Puffins have any questions they would like answered please do let me know.  If it’s a big enough topic I can answer it via another article.

© text & images Reggie 2023