The Beginner’s Guide to Gold Bullion

Recently, we have seen many new clients come to us, many of whom may have never invested in gold before. For those relatively new to the gold market, you may have questions or would just like a little more information to help you make an informed decision before you take the plunge.

Should I buy gold coins or bars? Pre-owned or new? What is the difference between 22ct gold and fine gold? These are just some of the frequently asked questions we are asked on pretty much a daily basis. In this short guide, we’ll be answering these questions and more, which may help you become a little more savvy in the world of bullion.

The origins of the term “Bullion”

The word "bullion" is of French origin and means “boiling”, a reference to the practice of melting the raw gold to create ingots and bars. This practice would occur in melting houses and the term has remained the umbrella term for gold coins, bars and ingots ever since.

Popular types of bullion:

Gold Coins

The most popular and recognised British gold bullion coins are Britannia and Sovereign coins. Due to them being legal tender in the UK, they are exempt from Capital Gains Tax (CGT). This allows UK investors the freedom to invest & sell as many or as few of these coins as they require, as and when they need, without paying tax on any profit they make.

The value of a gold bullion coin is measured by multiplying its precious metal content with the current gold price, rather than its nominal monetary value. Other popular bullion coins from across the globe include the USA Gold Eagle, Canadian Maple Leaf, and South African Krugerrand.

Gold Bars

Our range of gold bars is extensive, and we have gold bars for investment from 1 gram up to 1 kilo in weight. But we could be excused for saying these are usually not quite as interesting to look at as the coins! A gold or silver bar is just exactly that, a bar of the precious metal produced by varying manufacturers from around the world, to just be a bar of a certain weight and purity, conforming with all international standards.

Gold bars or coins, which is best?

All gold coins and bars are exempt from VAT, and therefore the quoted price you see on our website is the full complete price - including delivery to your door.

In a nutshell, bars generally work out a little bit cheaper to buy than the same weight for a coin, however there are pros and cons to each. Coins can offer greater liquidity, as well as often feature attractive or historical designs stamped with a date, adding a collector element to precious metal investment.

Bullion purity

The purity of gold bullion (or ‘fineness’) is measured in parts per thousand. For example, many gold coins have a fineness of 999.0 meaning it contains 999 parts gold and 1 part of another metal. As 100% pure gold is virtually impossible to achieve, the purest type of gold available is 999.99, and any coin or bar containing 999.0 or above is considered ‘fine gold’.

Some coins, most notably the ever-popular sovereign, are struck in 22ct gold, or 916.7 fineness. This means the coin contains 916.7% fine gold, which has then been alloyed with another metal such as copper, usually making the coin more hard-wearing.

What is gold bullion used for?

A core reason why many choose to invest in gold bullion is to protect their wealth against economic fluctuations. The value of assets like property and shares are heavily influenced by the global economies so they can lose vast amounts of value should an economy crash. Gold is often used to hedge against the forces of inflation and uncertainty on global markets. It often appreciates in value in times of economic slumps where trust in paper money falls and so the value of assets such as gold become a more trustworthy measure of wealth. In this respect, gold is often seen as a positive investment for protecting wealth in the long term.

However, it’s also worth noting that, due to the variety of designs of new coins being bought out each year, gold bullion coins can also be a popular choice as a collector’s item.

Should I buy pre-owned or new?

If you are looking to get the most physical gold or silver for your money, buying pre-owned can often be the best option.

In today’s online market, new coins and bars are constantly sold at competitive premiums. However, these new products often attract costs such as manufacturer's premiums and delivery, and so are generally more expensive than second-hand ones.

How to buy gold bullion

When it comes to buying gold bullion, it is essential to do your research. World affairs and stock market activity often results in fluctuating gold prices, so it is important to take this into consideration when purchasing. If you are buying bullion online, take a little time to research into the bullion dealers and ensure any payment and delivery options are guaranteed and secure. Trusted bullion dealers will be used regularly by loyal customers and will utilise reviews to show this.

If you are looking to buy or sell new or pre-owned gold bullion, Atkinsons offer the very latest prices to ensure we are competitive within the market. Our experts are on hand to answer any questions you may have in regard to gold and silver bullion and also offer secure, free delivery within the UK.

This blog represents one person’s opinion only. Please note, gold and silver prices may go down as well as up. Atkinsons Bullion & Coins accepts no responsibility for any losses based on information we have provided. We do not offer investment advice. Please carry out your own research before making an investment decision.