Royal Mint launches bullion trading site

Gold bars

The Royal Mint has launched an online system for buying, storing and selling gold and silver bullion coins.

The new site,, provides live pricing information for gold and silver at a rate linked to the current precious metals price.

Once a customer sets up an account and purchases some coins, they will either be delivered to the person's home or stored on-site in a protected vault. If keeping the gold yourself, you would be responsible for storage, security and insurance.

To have the Royal Mint store your gold you would need to buy at least one 'tube' of coins, meaning paying £4,719.25 for a bundle of 25 gold sovereigns or £7,905.06 for a bundle of 10 of the larger gold Britannia coins. Prices are accurate at the time of writing.

ETF alternative

However, critics have voiced concerns that the price of having the coins stored by Royal Mint - 1% plus VAT for a total of 1.2% annually - is exorbitant.

Laith Khalaf, senior analyst at investment platform Hargreaves Lansdown, says: "At an annual charge of 1.2% this looks like a pricey way to hold gold, when an exchange traded fund can give you the same exposure for around a quarter of the annual cost.

"For those with deep pockets, many banks offer bullion services for around 0.25 to 0.35% a year, but you need to buy at least £1 million worth, and even then you won't ever get to see it.

"Investors need to understand investing in gold is by no means a one-way bet. Gold is notoriously difficult to value, subject to seasonal demand and, unlike shares and bonds, it provides no income for investors. Price movements can be fickle and unpredictable."

According to Khalaf, gold tends to make an effective hedge against "calamity", rising in the wake of the financial crisis and falling sharply when the American central bank hinted at tapering quantitative easing. Because economic forecasts are currently generally positive, he suggested it might not be a good time to buy.

Even investors looking to hedge against unforeseen dips should hold no more than 5% of their portfolio in gold, he concludes.

This article was written for our sister website Money Observer


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