Best ways to invest in gold

Be it an advert online, an article in a newspaper, or even the recommendation of a friend, investing in gold has become not just a popular investment asset, but a recommended one. What are the best ways to invest in gold though? If you search online for gold coins or bars to buy, you may be overwhelmed by the sheer number of choices you’re faced with.

Investors do have a wide range of options to consider. Gold derivatives or futures, ETFs, even gold mining stocks. At BullionByPost however we believe that physical gold is the best way to invest in gold. Even within the physical gold branch there is a wide range of options to consider. From gold bars to gold coins, and all the variations within, these are some of the best ways to invest in gold.

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Cheapest way to buy gold

For many investors this is the most important question to ask yourself. The cheapest initial purchase will help maximise your profits when you sell. The cheapest way to buy gold, like many things in life, depends on what exactly you want.

Before we look at the options below though it should be noted that, for UK customers, it is highly recommended that you purchase a coin made in the UK by The Royal Mint. Most bullion coins produced by The Royal Mint are classed as legal tender and many are both VAT-free and CGT exempt. This gives coins like the Britannia and Sovereign an immediate price advantage over international coins. The first place to start finding the cheapest investment gold is undoubtedly to buy British.

The cheapest way to buy gold is to find the best price per gram. Fortunately, our website can be sorted in many cases by just such a filter. Using the ‘Sort by’ option located on the top right of our category pages, you can select the ‘Best Price per Gram’ filter. This gives you the cheapest choice of gold straight away.

Manufacturing premiums are a reality when buying physical gold, but one of the best ways to minimise this additional cost is to buy products that enjoy mass production. The more coins produced helps bring the overall cost down for a mint. This makes the Britannia and Sovereign gold coins one of the cheapest ways to buy gold for a UK investor. Premiums have been elevated since the pandemic began in 2020, and even now in 2023 high inflation has driven production and supply costs higher. Coins can still offer one of the best ways to invest in gold, but may now be closer to some international coins and bars.

Beyond this, coins or bars, small or large, new or pre-owned; all are decisions before you, and each choice has their own unique benefits, as discussed below.

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Best gold coins to buy for investment

Pre-owned coins will typically offer the cheapest way to buy a gold coin in the UK. For investors who don’t mind buying second-hand our ‘best value’ gold coins offer lower premiums for the same weight and purity of coin. Remember, these coins aren't used in everyday trade, and even if slightly marked by a previous owner they will weigh the same, and be worth the same as a new coin to a bullion dealer.

If you’re looking for a new coin however, then The Royal Mint’s gold Sovereign is a highly popular coin for investment. VAT-free and CGT exempt, the Sovereign is a world recognised coin and is smaller than the traditional one ounce investment coin, reducing the cost. You can also buy smaller sized coins such as the tenth ounce Britannia. Smaller even than the Sovereign, this coin makes a great first purchase for a budget-conscious investor.

As with many other assets, the economies of scale apply to gold coins too; manufacturing costs become more efficient in larger amounts. If your investment budget can accommodate a bigger coin then the one ounce gold Britannia can be more cost effective than the smaller Sovereign, while still enjoying the same tax benefits. Similarly, buying multiple coins in one order reduces admin and delivery costs, saving you money overall.

While it can certainly vary based over time, and you may have other factors that change your preference, the Britannia or Sovereign are the two most popular coins with our customers and are considered the best gold coins to buy for investment.

For investors with an interest in history, antique gold coins can offer better returns on investments. Old British coins made of gold are very rare and highly sought after, driving their prices much higher than the gold they contain would warrant. If you spot a bargain, are willing to hold on to it long-term, and sell it to a collector, then you could see your money increase significantly. One of the benefits to these coins is they will always be worth at least their gold content. These coins should be considered as collectables however and not a traditional investment. Getting a good price may require a long selling period while finding a keen buyer.

The benefit of a good investment coin like the Britannia or Sovereign is a quick sale for an easy to work out price from a dealer.

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Best gold investment bars

Gold bullion bars work in similar ways to coins but offer an even greater range of options.

Starting from as small as one gram, gold bars are produced in sizes up to 12.5 Kilos (a very large, very heavy ingot). With such a huge range available there are bars to suit any investment size, from the smallest gift to the largest personal investment. At 24 carat, these bars are all classed as ‘investment gold’ and enjoy the benefit of being VAT-free in the UK. The economy of scale should once again be considered; smaller bars are easier to transport and store, but larger bars will see improved premiums.

Particularly at 100g or higher, a gold will often be cheaper than coins of the equivalent weight, so it can be worth checking current prices, whilst considering the tax benefits mentioned above for coins.

Gold bars have two different manufacture types; cast or minted. Minted bars have a finer finish and look smoother, while cast bars typically have a slightly rougher appearance. Both have the same gold content. For investment purposes, cast bars are usually best as they are made in a more cost-effective way. As with coins, gold bars can be bought pre-owned - passing savings on to the customer.

One thing to note with gold bars is the manufacturer. A number of mints across the globe produce gold bars for investment. LBMA-approved companies like Umicore, Heraeus and PAMP are all ethical, reputable producers of bars, but each charge slightly different prices for their product. Manufacturing costs and reputation vary for each (due to the country of origin) and this is reflected in the price.

For investors though, how a bar looks, or who made it, is irrelevant. If a bar weighs one kilo then this is all that will matter when you sell. Buying the cheapest available bar, at the right weight for you, is the best way to invest in a gold bar.

Investors can also try our investment calculator for investment suggestions tailored to their budget. This will check the site for the best ways for you to invest in gold, and will offer a selection of packages for you to consider.

If you have any questions regarding the information here, or queries about ordering from us, then please contact our customer service team via support@bullionbypost.co.uk.