So you want to get into buying precious metals and don’t know where to start. Here are a few things to consider.
What metals to buy? - The gold:silver ratio changes with the prices of the precious metals. Silver is currently considered very under-valued and (at the current gold:silver ratio of 113) you can buy ~78 x Silver 1 oz Britannia coins for the cost of 1 x Gold 1 oz Britannia.
Tax implications? - If you live in the UK, British coins are free of capital gains tax when you want to sell them but CGT is payable when selling bars. Gold coins and bars are also VAT free to buy. VAT is payable when buying silver.
Where to buy? - Always use reputable bullion websites e.g. Bullion By Post or Silver To Go. Don’t buy on eBay unless you’re sure they are from a reputable seller with positive reviews. It has been known for some eBay sellers to sell genuine coins in the main but with the odd fake coin/bar that is only plated. If you are worried you’ve bought a fake coin there are ways you can put your mind at ease. The easiest of these is the ping test. This is where you balance a coin on your finger and tap it with another coin to hear the sound it makes.
Where to store precious metals? - If you have space at home with good hiding places, consider investing in a safe that can be bolted to the wall or floor. The fewer people who know you have a) precious metals and b) a safe, the better. Thieves target safes so if you’re nervous you can buy fake gold bars on eBay to keep in your safe and stash the real metals elsewhere. If holding your metals at home is not appealing you can opt for the dealer you are buying from to store your coins/bullion securely in their vault. Storage may be free for the first 6 months then cost a small monthly fee. This also saves you delivery costs and is a good option if you are purely investing for profit. However, if you are also stacking coins/bullion as a collector it’s preferable to have them delivered so you can fully appreciate the weight, design and quality finish of your stack.
In summary, investing in precious metals is a great way to diversify into a physical store of value with a scarce supply.