It is not that easy to walk into a shop and throw some coins over the counter and buy gold. Whether you have been doing some research or just talking to other buyers, you would have noticed a lot of controversy around 24kt gold coins. Are they still good as a way of owning gold in the UK? Or better without bars and bullion? As the price of gold makes the headlines daily and savers consider alternatives to safeguarding their hard-earned nest eggs, the question is more topical than ever before.
So What Are 24 kt Gold Coins?
A 24 kt gold coin is produced with the highest purity of gold, which is a 99.9 percent purity and above—think three nines fine. It is as non-indulgent as it can be without getting into a gallon or two of trouble. Examples that are well-known commodities in the UK are the Canadian Maple Leaf, Australian Kangaroo and the Philharmonic of Austria. These are still regularly minted by many of the specialist dealers and mints, and they are frequently much sought after not only as pieces of bullion but also on account of their beauty.
Even the Britannia (UK), which was once a coin of 22 kt value, is now a 24 kt coin; therefore, the Britannia complies with international criteria on its purity. The majority of the 24 kt coins are provided in ounce or smaller weights, which makes them easy to exchange and keep.
Premiums and Pricing: The Reason Why
The premium is another important consideration of the UK purchasers: the price that you are charging over the pure price of gold. With 24 kt gold coins the premium is normally higher as compared to the same weighted gold bars. Why? The final figure includes minting costs, design, collectability and packaging. By June 2024 there is nothing unusual about a 24 kt coin having a 7-12 percent premium above spot, whereas a 100 g bar may have a 3-5 percent premium. That is a significant variation, and it can nibble away at profits when you are purely metal-value-minded.
Would 24 kt Gold Coins Make Good Investments?
Others purchase coins as a source of leisure, others as gifts to the family members, but the biggest question is, do these coins stand as a serious venture of investment?
Liquidity and Recognition
Among the 24 kt coins, one of its good things is that it is internationally recognised. It immediately becomes recognised and quickly disposed of in a tight spot, either with a UK dealer, at an auction, or privately. This will imply that you will not find yourself stranded, twiddling your thumbs, as you continue waiting to find someone to believe in the authenticity of the coin.
On the negative side, there is always a premium to pay, so you will have to pay higher prices before you make a profit, as compared to purchasing bars near spot. When you purchase a coin at a price of 1,900 sterling and your spot price is at 1,770 sterling, you have a gap of 130 sterling to make up before you are in the money.
Tax and VAT Advantages
Now for some good news. VAT The UK is one of the few countries where VAT is not payable on investment-grade gold, i.e., any 24 kt gold coin or bar. It is a huge victory. Better still, British legal tender coins e.g. Britannias and Sovereigns, are not subject to Capital Gains Tax (CGT). This exemption is not absolute for popular international coins, so when tax efficiency matters, then you should look at terms before a purchase.
Permanence and Shelving
Other investors are worried about the malleability of 24 kt gold—a softer scratch and dented item than a 22 kt coin of yesterday (such as Sovereigns or Krugerrands). Will this probably be an issue? Not really, unless you intend to fling them about willy-nilly in a change jar or pocket them. The majority of 24 kt coins that are current are already enclosed in plastic capsules or may also be stored securely in tubes. Treat delicately, and they will hold the lights. In years to come.
Collectability Factor
Purchasing a gold coin has more than one reason. Do you enjoy beautiful design, low mintages or a tale behind a coin? The numismatic aspect may incite you to pay more of a premium. Special years are sometimes rarer; proof editions or a certain special significance may be worth more, usually when in mint state. Just keep in mind, collectability is a lottery; what an enthusiast will get all stuffed about today may not bring forth much in 10 years.
Bars vs. Coins: The a Cosmic Issue Carrying on the Everlasting Debate
But here is the question: Is it enough to do that, just use bullion bars?
Comparing Premiums
Bars virtually always win on a pure gram-by-gram pure investment basis. The larger dealers, the ones such as Baird & Co., The Royal Mint, and Sharps Pixley, deal with 24 kt bars whose premiums and packaging are lower. It implies that your money is invested more on gold and less on shiny bling.
However, coins stand their ground in the market. When there is a reason to panic, it might even be easier to turn coins into cash locally, and UK coins have that useful, convenient CGT exemption. That can offset a larger premium when you have a longer time horizon.
Concluding Words: Is It Worth Buying 24 kt Gold Coins in the UK?
As long as you appreciate the flexibility of owning an asset, the capability of selling at any moment, and the assurance that is available with something internationally accepted, 24 kt gold coins are still viable. They have better tax positions than several foreign facilities available to the residents of Britain. Yup, it will cost a little more than just bars, but easy liquidity, collector upside and the mere bragging factor keep buyers coming back again and again. Even when you store them in a safe or hand them down the dynasty, they simply continue to be one of the biggest luminaries of gold among buyers in the UK who need something more than mere metal to carry the weight forward.
