Gold prices were at £1,511.06 an ounce as of 9.10am today. It is unchanged from yesterday’s closing price of £1,511.06.
Compared to the previous week, gold prices were down 1.06 percent, and down 5.31 percent from a month ago.
The 52-week gold price high is £1,633.43 and the 52-week gold price low is £1,502.20.
Investing in commodities like gold or investing in stock market funds is inherently risky, and doing so puts your capital at risk. You may not get some or even all of your money back.
Gold price today
The value of gold over time
How to invest in gold
Many investors see gold as the ultimate safe-haven asset. Gold can hold its value when the prices of stocks, bonds and assets fall sharply – and its value can rise as nervous investors rush to buy.
Investing in gold is a way to add diversity to your investment portfolio. When you hold a mix of different assets, including gold, different returns can protect the value of your investment.
There are many ways to invest in gold. Each has advantages and disadvantages…
One option is to buy gold in physical form:
- Gold bars. Also known as bullion, gold bars are a popular choice for buying gold. Bullion is typically sold by the gram or ounce. Purity, manufacturer and weight must be printed on the face of the bar.
- Gold coins. The sovereign and the British are popular collectors who command a premium over the price they get for the same gold in bullion form.
- Gold jewelry. As with gold coins, you may pay a premium for gold when you buy it in jewelry form – this premium can range from 20% to 300%, depending on the manufacturer.
Alternatively, investors can invest in gold indirectly by:
- Gold shares. Buying stocks of gold mining or processing companies is another way to invest in the yellow metal. You cannot own physical gold, but you can be exposed to the rise and fall of gold prices in the market.
- Gold coins. There are various funds that offer exposure to gold. You can invest in gold stocks or trade gold derivatives in the options and futures markets.
Should you invest in gold?
If you want to hedge against risk or diversify your portfolio, consider investing in gold. Gold may not be your first choice for long-term capital growth.
Over the past five years, the price of gold has appreciated roughly 36 percent, compared to the S&P 500’s total return of 60 percent.
The price of gold can be very volatile, and this means that gold is not a completely stable investment. In fact, you can easily build a well-diversified investment portfolio without gold.
It should also be noted that gold in physical form does not provide income or yield like other investments.
If you buy physical gold, you need to consider where to store it and the costs associated with safe storage.
Is gold an inflation hedge?
Studies have shown that gold can be an effective way to hedge your wealth against inflation, but only over very long periods of time, measured in decades or even centuries.
In the short term, the inflation-adjusted price of gold fluctuates significantly, making it a poor hedge against inflation in the near term.
Frequently Asked Questions (FAQs)
Is it better to buy gold than to hold cash?
Inflation reduces the ‘real’ value of a currency over time. Or put another way, £50 buys you less today than it did 10 years ago. However, gold can provide a way to hedge the ‘real’ value of your assets against inflation.
During hyperinflation, as is currently the case in the UK and US, investors may revert to buying gold as a real physical asset. Periods of high inflation are often associated with rising interest rates and general economic instability. As a result, gold is seen as a safe haven, and in theory, an increase in demand will lead to an increase in price.
Over the past 20 years, annual inflation in the UK has averaged 3 per cent, according to the Office for National Statistics. During the same period, the price of gold increased by an average of 9% per year (according to the World Gold Council). According to the Bank of England, the average base rate (a proxy for savings interest) during this period was 3%.
Adjusted for inflation of 3 percent, the ‘real’ price of gold rose by an average of 6 percent per year. In comparison, savers would have experienced no ‘real’ increase in the value of cash held in savings accounts due to inflation.
Is it a good time to buy gold?
Gold can provide investors with a safe haven during times of economic and geopolitical volatility. It provides a means of preserving wealth in an environment of high inflation. Like stocks, the price of gold is volatile. However, prices have increased over the past 30 years.
Investors should also consider the impact of foreign exchange movements when deciding to buy gold. Gold is traditionally denominated in US dollars and as a result tends to have an inverse relationship with the US dollar. This means that if the US dollar strengthens against other currencies, the price of gold may fall.
Compared to last year, gold prices fell by 3% as the US dollar strengthened against other currencies. But gold prices rose 10% as the pound weakened against the dollar.
In general, it is difficult to predict a good time to buy gold as the price depends on many factors. Although continued economic and political uncertainty may cause a tailwind for gold prices, investors should also be aware of the volatility of this asset.
Will the price of gold decrease?
Gold is a finite commodity with a relatively static supply, meaning the price of gold is very sensitive to changes in demand. A fall in demand causes the price of gold to fall.
For example, the price of gold fell more than 25 percent from 2011 to 2013. It also fell from over $2,000 per troy ounce in mid-2020 to below $1,700 in early 2021, a 17 percent decline.
How is the price of gold determined?
The price of gold is determined by the level of supply and demand. The daily price is set by the London Bullion Market Association (LBMA) and there are two different gold prices:
- Fixed: LBMA members meet twice a day via conference call to agree on prices for clearing their client orders. This is typically used for large orders of gold.
- Location: This is primarily a ‘straight’ price used to buy and sell gold bullion.
Is investing in digital gold profitable?
Digital gold (or digigold) is a form of digital currency that can be used to purchase fractions of physical gold stored by the seller. Buyers of digital gold own the gold, and have legal title, with the seller acting as custodian.
Digital gold allows buyers to invest by value – say £25 – rather than by weight (like a 1kg bullion). Buyers can invest a lower amount than the physical asset.
Digital gold offers savings in terms of storage and insurance. For example, the Royal Mint charges an annual management fee of 0.5% for its DigiGold products, compared to 1-2% for physical gold.
As buyers own physical gold, their profit (or loss) will depend on the price of gold, which is reflected in the above questions.
Which gold is best for investment?
You can buy physical gold in the form of bullion, coins or jewelry or invest in digital gold:
- Bullion bars These usually weigh from one gram to 10 kilograms. A premium is typically paid above the gold’s ‘spot price’ to cover production costs. The cheapest option currently sold at the Royal Mint is a one gram 999.99 fine gold British Bullion Bar, which retails for £70.
- Coins: These are available in a lighter weight than knee braces. The main gold coins in the UK are the sovereign and the British pound. The Royal Mint is currently paying £122 for a 916.67 fine gold Quarter Sovereign 2022. Both coins are legal tender in the UK, and as such, are exempt from capital gains tax and UK resident VAT.
- Jewelry: Jewelry, especially antiques, is another option. However, you can pay a markup of at least 20% and often much higher depending on the gold content. This covers the cost of design and manufacturing labor and the retail margin
- Digital Gold; This allows for the purchase and holding of fractions of the physical assets with minimal investment and savings on storage and insurance costs.
Investors may also consider investing in indirect forms of gold, including:
- Buying shares in mining, refining and gold trading companies: However, while mining company stock prices are correlated with the price of gold, their stock prices are also influenced by other factors.
- Buying gold and commodity moneyCommodity, mining and exchange-traded funds allow investors to store and store physical assets without the hassle of exposure to gold.
*The above gold price information is provided by Zyla Labs, which sources property price information from multiple sources. This gold price represents an average of spot gold prices on several major metal exchanges. Prices are updated every business day.