How to Invest in Gold in the UK: A Beginner’s Guide

Isobel Lawrance 26th Mar 2025 No Comments

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If you’re considering diversifying your investment portfolio, investing in gold can be an attractive option. Gold has long been viewed as a safe haven asset, offering stability during economic uncertainties.

Notably, in 2024, gold prices surged by 28.89% in sterling terms, outperforming both UK and global shares, as well as UK government bonds.

But how do you get started? In this guide, we’ll walk you through everything you need to know about investing in gold in the UK.

You can also learn everything you need to know by listening to our podcast!

Why Invest in Gold?

Gold is popular among investors for several reasons:

Safe haven asset: Gold often retains its value during economic downturns, providing a hedge against market volatility.
Inflation hedge: Historically, gold has maintained its purchasing power, making it a reliable store of value during inflationary periods. In fact, it is one of the most popular investments that hedge against inflation.
Diversification: Adding gold to your investment portfolio can reduce overall risk, as it often moves inversely to stock markets.

Step-by-Step Guide to Investing in Gold

If you think that gold would be a good addition to your portfolio, here’s a simple guide on ho wot invest in Gold.

1. Understand the Gold Market

Before diving in, it’s essential to grasp the factors influencing gold prices.

Geopolitical tensions, economic data, central bank policies, and currency fluctuations can all impact the value of gold. F

or instance, in 2025, uncertainties surrounding global trade relations and inflation concerns have driven gold prices to record highs. However, this has also caused significant volatility.

Read: Is 2025 the Year To Invest in Gold?

2. Choose Your Investment Method

There are several ways to invest in gold:

Physical Gold: Purchasing gold bars or coins allows you to own tangible assets. The Royal Mint offers a variety of gold bullion products, including the Britannia and Sovereign coins, which are exempt from Capital Gains Tax for UK residents.
Gold ETFs (Exchange-Traded Funds): These funds track the price of gold and are traded on stock exchanges. They offer a convenient way to gain exposure to gold without the need for physical storage.
Gold Mining Stocks: Investing in shares of gold mining companies provides indirect exposure to gold prices. However, it’s worth noting that mining stocks can be influenced by factors beyond gold prices, such as operational costs and geopolitical risks.
Digital Gold: Platforms like The Royal Mint’s DigiGold allow you to buy fractional amounts of gold online, which is then stored securely on your behalf. This method combines the benefits of physical ownership with the convenience of digital access.

3. Consider Tax Implications

In the UK, investment gold is exempt from Value Added Tax (VAT). Additionally, certain gold coins, such as the Britannia and Sovereign, are considered legal tender and are exempt from Capital Gains Tax (CGT) for UK residents.

This makes them particularly attractive for investors seeking tax-efficient options.

4. Decide on Storage Solutions

If you opt for physical gold, secure storage is crucial. Options include:

Home storage: While storing gold at home provides immediate access, it requires robust security measures and may affect your home insurance premiums.
Professional vaulting services: Many dealers offer insured storage solutions in high-security vaults. The Royal Mint, for example, provides storage services with 24/7 surveillance.

5. Stay Informed and Monitor Your Investment

Gold prices can be influenced by a myriad of factors, including economic indicators, geopolitical events, and currency movements.

Regularly monitoring these factors will help you make informed decisions about your investment.

Risks of Investing in Gold

While gold offers several benefits, it’s essential to be aware of potential risks:

Price volatility: Gold prices can experience significant fluctuations in the short term – particularly during times of economic uncertainty.
No yield: Unlike stocks or bonds, gold doesn’t provide dividends or interest. Its value relies solely on price appreciation.
Storage and insurance costs: Owning physical gold incurs additional expenses for secure storage and insurance.

Investing in gold can be a great strategy for diversifying your portfolio and safeguarding against economic uncertainties.

By understanding the various investment methods, tax implications, and storage options, you can make informed decisions that align with your financial goals.

If you’re ready to get started, check out our useful guide on How to Buy Gold Stocks.

Do you want to learn more about investing? To keep on top of the latest developments in the wider investing sphere sign up to the fortnightly MoneyMagpie Investing Newsletter. It’s free and you can unsubscribe at any time.

Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here including opinions, commentary, suggestions or strategies are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence. Companies listed above are not necessarily endorsed by Money Magpie. When investing your capital is at risk.