The price of gold today, at 9:08am, was £1,586.41 per ounce. This represents an increase of 0.52% from yesterday’s closing price of £1,578.21.
Compared to last week, the price of gold is down 0.05% and up 0.93% from a month ago.
The 52-week gold price high is £1,654.81, while the 52-week gold price low is £1,494.62.
Investing in a commodity such as gold, or investing in a stock fund, is inherently risky, and it puts your capital at risk. You may not get back some or all of your money.
Gold Price Today
Gold Price Over Time
How to invest in gold
Many investors consider gold to be the ultimate safe haven. When stock, bond and real estate prices fall sharply, gold can retain its value – and its price can even rise as nervous investors rush to buy.
Invest in gold It’s also a way to add diversification to your investment portfolio. When you hold a diversified mix of different assets, including gold, varying returns can protect the value of your investments.
There are several ways to invest in gold. Each has advantages and disadvantages…
One option is to buy gold in physical form:
- Gold ingots. Known as bars, gold bars are a popular choice for purchasing gold. Bullion is generally sold by the gram or ounce. The purity, manufacturer and weight must be indicated on the face of the bar.
- Gold coins. The Sovereign and Britannia are popular collectibles that represent a premium over what you would get for the same amount of gold in bullion form.
- Gold jewelry. As with gold coins, you’ll likely pay a premium for gold when you buy it as jewelry – a premium that can range from 20% to 300%, depending on the manufacturer.
Alternatively, investors can invest indirectly in gold:
- Gold stocks. Buying shares of gold mining or processing companies is another way to invest in the yellow metal. You do not own physical gold, but you are exposed to the rise and fall of the market price of gold.
- Gold fund. There are a range of funds offering exposure to gold. They can invest in gold stocks or trade gold derivatives on options and futures markets.
Should you invest in gold?
You should consider investing in gold if you are looking to protect yourself against risk or diversify your portfolio. Gold probably wouldn’t be your first choice for long-term capital growth.
Over the past five years, the price of gold has appreciated approximately 36% while the total return of the S&P 500 has been 60%.
Gold prices can be extremely volatile, meaning that gold is not an entirely stable investment. In fact, you can easily create a well-diversified investment portfolio entirely without gold.
It is also worth noting that gold in its physical form, unlike other investments, does not produce income or returns.
If you are purchasing physical gold, you also need to think about where you are going to keep it and the costs associated with secure storage.
Is gold a hedge against inflation?
Studies have shown that gold can be an effective way to defend your assets against inflationbut only over extremely long periods of time, measured in decades or even centuries.
Over shorter periods, the inflation-adjusted price of gold fluctuates significantly, making it a poor short-term hedge against inflation.
Frequently Asked Questions (FAQ)
Is it better to buy gold than to hold cash?
Inflation reduces the “real” value of a currency over time. Or, in other words, £50 today gets you less than it did 10 years ago. However, gold can be a way to protect the “real” value of your wealth against inflation.
In times of high inflation, as is currently the case in the UK and US, investors may return to purchasing gold as a real physical asset that retains its value. Periods of high inflation often correspond with rising interest rates and general economic uncertainty. As a result, gold is considered a safe haven and, in theory, increased demand leads to higher prices.
Over the past 20 years, annual inflation has averaged 3% in the UK, according to the Office for National Statistics. Over the same period, the price of gold increased by an average of 9% per year (according to the World Gold Council). While the average base rate (an indicator of the interest rate on savings) was 3% over this period, according to the Bank of England.
Taking into account the inflation rate of 3%, the “real” value of gold has therefore increased on average by 6% per year. In comparison, savers would have experienced no “real” increase in the value of cash held in their savings accounts due to the impact of inflation.
Is now a good time to buy gold?
Gold can offer investors a safe haven during times of economic and geopolitical volatility. It is also a way to preserve wealth in a high inflation environment. As with stocks, the price of gold is volatile. However, its value has increased over the past 30 years.
Investors should also consider the effect of currency fluctuations when deciding whether or not to purchase gold. Gold is generally denominated in US dollars and, therefore, tends to have an inverse relationship with the US dollar. This means that if the US dollar strengthens against other currencies, the price of gold may fall.
Over the past year, the price of gold in US dollar terms has declined by 3% as the US dollar has strengthened against other currencies. However, the price of gold in sterling increased by 10% due to the weakening of the pound sterling against the dollar.
Overall, it is difficult to assess whether it is a good time to buy gold, as its price depends on a number of factors. Although continuing the current level of economic and political uncertainty could favor gold prices, investors should also be aware of the volatility of this asset.
Is gold losing value?
Gold is a limited commodity with a relatively static supply, which means the price of gold is very sensitive to changes in demand. A drop in demand will therefore cause the value of gold to fall.
For example, the price of gold fell by more than 25% between 2011 and 2013. It also fell from more than $2,000 per troy ounce in mid-2020 to less than $1,700 in early 2021, a drop of 17%.
How is the price of gold determined?
The price of gold is determined by the level of supply and demand. The daily price is set by the London Bullion Market Association (LBMA) and there are two different types of gold prices:
- Fixed: LBMA members meet by conference call twice a day to agree on a price to pay for their current customer orders. This is generally used for larger gold orders.
- Place: This is a widely used “live” price for buying and selling gold bullion.
Is it profitable to invest in digital gold?
Digital gold (or digigold) is a form of digital currency that allows you to purchase fractions of physical gold stored by the seller. Buyers of digital gold will hold the gold and have legal title to it, with the seller acting as custodian.
Digital gold allows buyers to invest by value – say £25 – rather than by weight (as with a 1 kilogram bar of bullion). Buyers can also invest a lower minimum amount than the physical asset.
Digital gold also offers savings in storage and insurance. For example, the Royal Mint charges an annual management fee of 0.5% for its DigiGold products, compared to 1-2% for physical gold.
Since buyers own the underlying physical gold, their profit (or loss) will depend on the price of gold, as discussed in the questions above.
Which form of gold is best for investing?
You can buy physical gold in the form of bars, coins or jewelry, or invest in digital gold:
- Gold ingots : their weight generally varies from one gram to more than 10 kilograms. A premium is usually charged above the “spot price” of gold to cover manufacturing costs. The cheapest option currently sold by the Royal Mint is the 1 gram Britannia fine gold bar at 999.99, retailing at £70.
- Coins: these are available in lower weights than bullion. The flagship gold coins of the United Kingdom are the Sovereign and the Britannia. The Royal Mint currently charges £122 for a 916.67 fine gold Quarter Sovereign 2022. Both coins are legal tender in the UK and as such are exempt from capital gains tax and VAT for UK residents.
- Jewelry: jewelry, especially antique pieces, is another option. However, you can pay a premium of at least 20%, and often much higher, over the gold content. This covers the labor cost of design and manufacturing as well as the retail margin.
- Digital gold: This allows you to purchase and hold fractions of physical assets, with lower minimum investment amounts and savings on storage and insurance costs.
Investors may also consider investing in an indirect form of gold, including:
- Buy shares in companies that mine, refine and trade gold: However, even though mining companies’ stock prices are correlated with gold prices, their stock prices are also influenced by other factors.
- Buy gold and commodity funds: Funds specializing in commodities, mining and exchange-traded funds can offer investors exposure to gold, without the difficulties of trading and storing it in physical form.
*The above gold price data is provided by Zyla Laboratories, which obtains asset price data from a wide range of sources. This gold price represents an average of spot gold prices on several major metals exchanges. Prices are updated every business day.