Royal Mint launches new website so ordinary people can invest in gold
You know what’s missing from your savings and investment portfolio? Gold. The Gold rush of 2011 saw gold prices rise to a record high of $1,883/ounce in August 2011, and now, three years later, The Royal Mint is encouraging the less wealthy public to become bullion holders with the launch of an online bullion trading service that lets people buy and sell gold coins.
From today, the Mint's vault service will allow anyone to trade gold and silver coins via its website. The aim is, of course, to prevent the elitism that meant only the fabulously wealthy could afford to benefit from the upturn/subsequent dip in gold prices, and the Mint reckons their shiny new website makes investing in gold as easy as putting money in a deposit account. But more exciting.
The Mint's website streams live prices for gold and silver so customers can buy at the best possible price "quickly, and securely, 24 hours a day, 365 days a year". If you have stored your stash in The Vault (which the Royal Mint appear to have trademarked- has anyone told The National Lottery?) the Mint will also give customers a 'competitive' quote to buy back coins bought from its website..
Although there is no minimum investment- customers can buy a single silver Britannia coin, worth about £19.50- but those who want their gold kept under 24 hour Minsistry of Defence guard in The Vault™ will have to cough up a little bit more. Entry to The Vault™ requires a minimum purchase of at least 25 22-carat gold sovereigns – worth about £4,700. The Mint then will charge 1% +VAT of the value of the stored gold per year in storage costs. Otherwise they post the coins to you, with limited time free delivery, for you to keep under your own mattress.
But is it a good investment? If you bought and sold at the right time around the 2011 high, you could have made a fortune, but since 2011, the price has dropped to $1220/ounce, a drop of almost a third. Pundits who had previously said you couldn’t lose on gold were forced to eat their words. Any investment is, of course, bound by its own risks and rewards and you have to weigh up whether you want to keep your wealth in chunks of useless metal, or in intangible electronic numbers somewhere instead.
However, there are two advantages to buying gold coins over some other types of investment, or long-term purchase. Firstly, gold bullion coins were exempted from VAT, which unsurprisingly increased their popularity over other non-financial investment items; coins are also not liable to pay transfer taxes such as Stamp Duties which are liable when buying some company shares.
Secondly, and more importantly, particularly if planning to make an investment killing, Britannia, Sovereign and Lunar bullion coins are actually considered legal tender. Not that you should take one out with you and use it to buy toilet roll or anything (a Lunar coin, for example, is a £100 coin, but costs around £780), but the distinction is important as UK currency is specifically exempt from capital gains tax. Meaning you keep an extra 18%/28% of your profit and don’t have to share it with the taxman.
Shane Bissett, the Mint's director of commemorative coin and bullion, said: "We want to help expand the bullion market in the UK, particularly as coins offer a relatively affordable introduction. The Royal Mint is responsible for manufacturing all UK coinage and has long been trusted with the currencies of other countries too, supplying to more than 60 worldwide. The quality of our bullion coins is of an extremely high standard which cannot be rivalled. We have been a highly respected and trusted source of coins for kings, queens and governments for over 1,000 years, and this proud heritage is means that we are globally recognised as a reliable source for bullion coins."