Owning gold bullion has a number of really potentially positive benefits, including hedging against inflation, maintaining value during a recession, and being freely recognised and traded worlwide.
Most investment or portfolio managers will tell you that investing in a diversified portfolio is a good idea - in otherwords, 'don't put all your eggs in one basket!'.
On this basis, it is always a good idea to put 10%-15% of your portfolio into precious metals, which negatively correlate to the stock market, and therefore gain value during recessions, while also maintaining purchasing power in the long run.
Gold's adjusted high was reached in 1980, when it reached what would today be $2,400 / ounce. This means that there is significant potential for an upswing in the gold price in today's market.
There are several ways you can purchase 'gold'.
1. You can buy into a gold ETF. However, the problem with this is that you do not actually own the physical gold. Therefore, if you need to access the gold or sell it for some reason, it may not always be possible.
2. You can buy into gold mining stocks. However, these are very risky, unless you already know a lot about gold mining and the different mines. Gold mines are notorious for having exceptionally high running costs. This means that a stock rate can go down even if gold prices are rising, due to costs not being managed properly.
3. You can physical gold bars and coins. This is perhaps the most straightforward and easy way to buy gold. If you own physical gold, you can sell your holdings incrementally or all at once, and you can keep your holdings discreetly. You do not necessarily need to disclose that you own physical gold.
Although most people thing of a 1 Ounce Gold Maple Leaf or a 1 Ounce Gold Eagle coin when considering purchasing gold coins, there are a number of European gold coins that should also be considered - these include the Swiss Vreneli, the French Marianne, and of course the British Sovereign.
Of these three, the British gold Sovereign is the most recognised and circulated worldwide. The British Sovereign gold coin, which is produced by the Royal Mint, has been in production continuously since 1837. These coins are not only 'gold bullion' coins, but they also have legal tender value.
The fact that these gold Sovereigns are considered investment grade gold bullion coins means that they have VAT exempt status in the European Union and in the United Kingdom. They also have no capital gains tax payable in the United Kingdom on profits for British residents. These two factors make the British Sovereign very popular in the European Union, and particularly in the United Kingdom.
The gold Sovereign surprisingly has a relatively low purchasing premium, which means that it can be purchased for a small margin over the spot gold price.
A one ounce gold coin sells for a significantly higher price than a gold sovereign. This is because a gold sovereign contains only 7.3 grams of gold. However, both have a similar premium. This makes the Sovereign a more 'affordable' option for gold investors. Many individuals do not have $1300 to purchase a gold coin each month, however they do have $400. This difference in price makes investing into gold coins more accessible to clients buying gold incrementally.
About the Gold Sovereign
Gold sovereigns in their current form have been continuously minted since 1837.
However, Sovereigns have existed as part of the British currency for more than 500 years.
The coin features an image of Queen Elizabeth II (or the current monarch at the time of minting) on the front, and an image of George slaying a dragon on the reverse.
Throughout the 1800's, the British Sovereign gold coin was in high demand both in the United Kingdom and throughout its colonies, as it was known that the coins contained physical gold in them. They were accepted in Canada, India, and in most of the trading posts that the British occupied at that time. The Royal Mint even set up subsidiary mints in some of its colonies, including India and Australia, to manufacture gold Sovereigns for local markets.
Today, these coins are still one of the most popular gold coins available on the precious metals market to physical gold coin enthusiasts.