With traditional savings vehicles such as cash ISAs and rental property facing tighter margins, and inflation steadily eroding the purchasing power of money held in the bank, many investors are reassessing where their capital is truly secure. This shift has led to renewed interest in gold.
Why Invest in Gold?
Gold has been valued for thousands of years. From ancient civilisations to modern central banks, it has consistently been regarded as a store of wealth. Unlike many financial assets, gold's appeal is not tied to a single economy, government or currency. It is globally recognised, finite in supply and highly liquid.
Gold's Strength During Economic Uncertainty
One of gold's defining characteristics is its independence from traditional financial markets. Historically, during periods of economic stress or market downturns, gold has often remained resilient — and in some cases delivered significant gains.
Following the financial crisis of 2008–2009, gold prices rose sharply and remained elevated even as global economies began to stabilise. Gold has also tended to perform well during periods of rising inflation, when investors seek protection against the declining purchasing power of cash.
Unlike fiat currency, which can be created through monetary policy and quantitative easing, gold is a finite resource. Limited supply, combined with growing demand from emerging markets and the technology sector, supports its long-term value proposition.
Investing in Gold Bars
Gold bars are a popular alternative to gold coins for investors looking to maximise the value of their investment. Due to their simpler designs and typically larger unit sizes, gold bars often carry lower premiums than coins, making them one of the most cost-efficient ways to invest in gold.
Like gold coins, investment-grade gold bars are VAT-free in the UK. However, unlike British legal tender coins, gold bars are not exempt from Capital Gains Tax (CGT) when sold. For more information, see our Capital Gains Tax guide.
Should I Invest in Gold?
Gold is widely regarded as a reliable store of value and is often used by investors to help protect wealth during periods of economic uncertainty. We generally suggest that investors consider allocating up to 10% of their liquid wealth to gold as part of a diversified portfolio.
Diversification helps reduce overall risk by spreading investments across different asset classes. By including gold in your portfolio, you may help protect against volatility in financial markets and safeguard your wealth against broader economic fluctuations.