Episode Details

At present, I’m probably getting asked this more than anything else. “Should I be buying gold? How do I buy gold?”

We have inflation, war, political discontent and financial instability, so I’m not surprised many are asking. Even if the gold price is stagnant, the case for owning it, for having wealth stored outside the system, is as strong as it has ever been.

So should you be buying gold?

The old Wall Street adage applies: “Put 10% of your net worth in gold, and hope it doesn’t go up.”

Thus today’s piece, which comes at the request of several readers and listeners, explains how to buy gold. This is especially for those in the UK, Europe and North America.

There are five ways to invest in gold.

* You can buy bullion - coins or bars. 

* You can buy gold stored in vaults but allocated to you. 

* You can buy ETFs via your stock broker. These are funds that store gold, and thus the price of the fund tracks the gold price.

* You can buy gold companies - refiners, royalty companies, miners and so on.

* You can buy futures, CFDs or spreadbets. 

I’m not talking today about buying mining companies (if you are interested in mining companies, consider a paid subscription as gold mining companies are one of my areas of expertise).

Nor am I talking about futures, CFDs or spread betting the gold price. This is not safeguarding your wealth outside the financial and political system. It is speculation - and in the right market can make you a lot of money. It can also lose you a lot.

Today I’m talking about old school, physical gold

I’ll put to one side arguments about whether gold is a good investment or not (it is), whether it’s going up or down, and simply explains what is the easiest, cheapest and, perhaps above all, safest way to buy gold.

Which bullion to dealer to use?

ETFs are a simple way to get exposure to the gold price. Easy to buy and sell, they are favoured by institutions. You buy an ETF just as you would buy any stock. London-listed gold ETFs include RMAU.L and PHAU.L The world’s biggest is the NYSE-listed GLD. Baked into the price is usually pay a small premium to the spot price of gold, and a small annual percentage to cover storage and other related costs. But it’s not really the same as owning actual metal, so the purists veer away from ETFs.

To buy an ETF, you just need an account with a broker, such as Interactive Investor. (If you sign up with them, and say I referred you - frizzers@ gmail.com - you will get a year for free and I get a referral fee).

The reason I steer away from ETFs is that they are too easy to get shaken out of. When you buy physical gold, to sell can be a bit of an undertaking, so it’s less likely to be done on a whim. Owning physical tends to turn you into a long-term investor.

In theory, there is not a great deal of difference between an ETF and the store it online with a bullion dealer route. Both are extremely convenient, for buying and selling. Both give you exposure to the gold price. But, as I say, I favour the storing it with a bullion dealer route, as it makes you less likely to sell. ETFs weaken your hands.

So where do you buy gold from? I’ve used many dealers over the years. My current recommended bullion dealer in the UK is the Pure Gold Company, whether you are taking delivery or storing online. In Ireland it’s Goldcore. Both deliver to the UK, US, Canada and Europe, or you can store your gold with them. I have affiliation deals with both.

Where are you going to put it?

Once you’ve decided where to buy it, the next question is: where to put it? Different people with di