Sales of gold bullion are on the rise, reaching record highs at the end of 2024, as investors look to hedge against global uncertainty and make the most of the precious metal’s tax benefits.
The Royal Mint’s revenue from gold bullion sales grew 153 per cent in the last three months of 2024, compared to the previous year.
The sales figures account for gold bars, coins and digital gold.
The Mint said sales revenue for bullion coins alone also saw an increase of 56 per cent on the third quarter of the year, and had increased 206 per cent compared to the fourth quarter of 2023.
The surge in gold purchases from the Royal Mint is driven by ongoing geopolitical turmoil, as well as falling interest rates.
Over the year as a whole, the total number of people buying gold increased 12 per cent, while bullion sales were up 9 per cent, reaching a record high.
Demand: Investors are increasingly purchasing solid gold as a way to diversify their portfolios
Stuart O’Reilly, market insights manager at the Royal Mint, said: ‘A combination of economic uncertainty and geopolitical volatility have led gold prices to hit multiple all-time highs in 2024.
‘At a time when interest rates are gradually subsiding, investors have been drawn in by the capital growth gold has delivered as an asset class, and the protections safe- haven assets provide.’
Meanwhile, The Pure Gold Company said it has seen ‘unprecedented’ growth in its gold sales, which rose by 612 per cent from January last year to the present.
‘This surge is driven by a broad spectrum of customers – from professionals like doctors, lawyers, and teachers to everyday people such as parents, retirees, and labourers – all seeking safety and security in uncertain times,’ Josh Saul, chief executive of The Pure Gold company, said.
Saul said the firm’s customers are not primarily focused on high returns.
Instead, he says: ‘Their focus is on protection against uncertainty, safeguarding their wealth amidst geopolitical tensions, market instability, and the increasing frequency of unpredictable ‘black swan’ events.’
Gold is often seen as a safe haven investment due to the metal’s ability to weather financial and political turmoil, as well as a method of diversifying a portfolio and providing a hedge against inflation.
Over 2024, gold soared more than 26 per cent in value, beating the S&P 500. The yellow metal is up almost 800 per cent since 2000.
Gold hit an all-time high of $2,790 per ounce on 31 October. At the time of writing, it is trading at $2,743 per ounce.
The total weight of platinum sold during the period also increased by 117 per cent year-on-year.
On top of its ‘safe haven’ reputation, gold coin investing is free from capital gains tax.
While CGT is paid on gold bullion, coins that are also accepted as legal tender, such as gold sovereigns and Britannia coins, are exempt from the tax.
This means that these products are an attractive investment option for people who have already made use of their Isa and Sipp investing allowances.
Investors will be looking for ways to reduce their tax liability ahead of the end of the tax year on 5 April.
Gold coins that were not struck by the Royal Mint, such as Krugerrands, are not exempt from CGT.
‘Gold’s tax advantages – such as tax-free growth on UK gold coins – have further driven demand among UK residents looking for portable, unrestricted alternatives to Isas,’ Saul said.
Mr O’Reilly adds: ‘Tax efficiency has also driven investment decision making, with a second consecutive record quarter for sales of bullion coins from the Royal Mint website.
‘The surge in demand for our VAT-free digital metal products also reinforces the idea that investors are adopting a proactive approach.’
Digital gold is a virtual representation of gold purchased from a provider. Buyers don’t actually receive the gold, but own a proportion of gold held in a vault by the seller.
Digital gold is free from VAT, and gold coins can also be purchased in digital form.
The Royal Mint said digital gold sales were up 194 per cent in the fourth quarter.
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