Royal Mint launches gold bullion trading website
Buy gold and silver coins from Royal Mint.
The Royal Mint has set up RoyalMintBullion.com, a new website allowing you to buy gold and silver coins directly from the Mint.
It is looking to attract new investors to put their money into the "relatively affordable" coins.
What gold can you buy?
You can buy either gold or silver bullion coins from the Royal Mint in line with the global fluctuating price, known as the spot price, plus a premium.
The size of the coins is weighed in troy ounces, which are slightly heavier than standard ounces. This measurement is normally used for precious metals and gems.
A 22-carat George and Dragon 2014 coin, weighing 0.2354 troy ounces, will go for about £199. A one ounce Britannia Bullion coin is priced at around £807.
No VAT is paid on gold bullion coins, but there’s 20% VAT on silver. Britannia, Sovereign and Lunar bullion coins are all free from Capital Gains Tax as they are legal tender in the UK.
You can choose to have your bullion sent to your home or it can be kept in 'The Vault' (unless it’s silver) which is protected by the Ministry of Defence. This storage option is only open to those buying at least 25 Sovereigns or a full tube of ten Brittanias. There is a 1% annual storage fee plus VAT.
There’s no limit on how much investors can buy, but the Mint has set up an advice and storage service for people spending more than £50,000.
The Mint may be able to buy it back from you when you wish to sell. It’s a little precarious as the competitive rate is based on a percentage of the day’s gold price. It’s not such good news for smaller investors either, as the Mint will only buy back full tubes of coins.
Risky business
In the past small investors have been put off of buying precious metals because buying and storing them is too complex. There’s also a widespread fear of being ripped off by a dodgy dealer.
Research from the World Gold Council estimates that an extra £4 billion could be invested in the market if the price of buying or converting gold was made easier.
However, a number of financial experts have called for caution, pointing to the volatile nature of the price of gold (in the last three years the price of an ounce of gold has fallen more than £400). The Royal Mint has also been accused of encouraging a gold rush.
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Aware, The coins you're looking for are called sovereigns and you should expect to pay around 10% above spot price if buying in small quantities. If I were you I'd shop around, https://www.coininvest.com/en/ has a good reputation and can be quite competitive when they're running offers. Jewellers tend to be expensive and I would avoid eBay at all costs - it's become far too dangerous in recent years especially if you're inexperienced. As for selling, lots of places will buy but for small amounts (£5k is a small amount) you'll probably be offered sightly less than spot price. If it were me I'd first find out what the spot price is (http://www.xe.net/ucc) and then try either Hatton Garden in London or sell privately.
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Could someone advise me the cost of purchasing £5000 George & Dragon gold coin also other liability costs buying and reselling. Thank you
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I have to agree with Arblaster below, having the government (in effect) hold your gold for you is a bad idea as it removes one of the most important aspects of gold ownership: actual gold ownership. In the event that there is another financial crisis then there really is nothing stopping the government from "borrowing" your gold for an indeterminate amount of time and if you think that it can't or won't happen then just ask any Cypriot who had more then 100k Euros in the bank. Their equivalent of our Financial Services Compensation Fund (FSCS) was effectively bankrupt by the banks there and so accounts holding more than the 100k limit were seized and converted into government loans.
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24 September 2014