The price of gold today, at 9.07am, was £1,610.67 an ounce. That’s up 0.18% from yesterday’s closing price of £1,607.74.
Compared to last week, the price of gold rose 1.04% and 3.61% from the previous month.
The 52-week gold price high is £1,632.50, while the 52-week gold price low is £1,506.69.
Remember that investing in a commodity like gold, or investing in a stock fund, is inherently risky and puts your capital at risk. You may not get some or even all of your money back.
Gold price today
Gold price over time
How to invest in gold
Many investors view gold as the ultimate safe haven. When stock, bond and real estate prices fall sharply, gold can hold its value – and its price can even rise as nervous investors rush to buy.
Investing in gold is also a way to diversify your investment portfolio. When you hold a diverse mix of different assets, including gold, variable returns can protect the value of your investments.
There are several ways to invest in gold. Each has its pros and cons…
One option is to buy gold in physical form:
- Gold ingots. Known as bullion bars, gold bars are a popular choice for buying gold. Bullion is generally sold by the gram or by the ounce. The purity, manufacturer and weight should be stamped on the face of the bar.
- Gold coins. The Sovereign and Britannia are popular collectibles that command a premium over what you would get for the same amount of gold in bullion form.
- Gold jewelry. Like gold coins, you’ll likely pay extra 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 shares. Buying shares of gold mining or processing companies is another way to invest in the yellow metal. You don’t own physical gold, but you are exposed to the ups and downs of the price of gold in the market.
- Gold fund. There is a range of funds that offer exposure to gold. They can invest in gold stocks or trade gold derivatives in the options and futures markets.
Should you invest in gold?
You should consider investing in gold if you are looking to hedge against risk or diversify your portfolio. Gold probably wouldn’t be your first choice for generating long-term capital growth.
Over the past five years, the price of gold has appreciated about 36% while the total return of the S&P 500 has been 60%.
Gold prices can be extremely volatile, meaning gold is not an entirely stable investment. In fact, you can easily build a well-diversified investment portfolio entirely without gold.
It should also be noted that gold in its physical form, unlike other investments, does not produce income or returns.
If you are buying physical gold, you also need to consider where you are going to keep it and if there will be any costs associated with secure storage.
Is gold a hedge against inflation?
Studies have shown that gold can be an effective way to defend your wealth against inflation, but only over extremely long periods of time, measured in decades or even centuries.
Over shorter periods, the inflation-adjusted price of gold fluctuates widely, making it a poor short-term hedge against inflation.
Frequently Asked Questions
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 buys you less than 10 years ago. However, gold can provide a means of protecting the “real” value of your wealth against inflation.
During a period of high inflation, as is currently the case in the UK and US, investors may revert to buying 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 has increased by an average of 9% per year (according to the World Gold Council). While the average base rate (an approximation of the interest rate on savings) was 3% over this period, according to the Bank of England.
Adjusted for the inflation rate of 3%, the “real” value of gold has therefore increased by an average of 6% per year. In comparison, savers would have experienced no “real” increase in the value of cash held in savings accounts due to the impact of inflation.
Is it a good time to buy gold?
Gold can offer investors a safe haven in times of economic and geopolitical volatility. It also provides a way to preserve wealth in an environment of high inflation. As with stocks, the price of gold is volatile. However, it has delivered an increase in value over the past 30 years.
Investors should also consider the effect of currency fluctuations when deciding whether or not to buy 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.
Looking back over the past year, the price of gold in US dollars has fallen by 3% as the US dollar has strengthened against other currencies. However, the price of gold in sterling rose by 10% due to the weakening of the pound against the dollar.
All in all, it is difficult to assess whether this is the right time to buy gold as its price depends on a number of factors. Although the continuation of the current level of economic and political uncertainty may provide a tailwind for 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 that the price of gold is very sensitive to changes in demand. A fall in demand will therefore result in a fall in the value of gold.
For example, the price of gold fell more than 25% from 2011 to 2013. It also fell from over $2,000 per troy ounce in mid-2020 to under $1,700 in early 2021, a decrease 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 settle their outstanding customer orders. This is generally used for large gold orders.
- Place: it 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 lets you buy fractions of physical gold stored by the seller. Buyers of digital gold will own and have legal title to the gold, 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). Buyers can also invest a lower minimum amount than the physical asset.
Digital gold also offers savings in terms of 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.
As buyers own the underlying physical gold, their profit (or loss) will depend on the price of gold, as discussed in the questions above.
What form of gold is best for investment?
You can buy physical gold in the form of bars, coins or jewelry, or invest in digital gold:
- Ingots: these typically range in weight from one gram to over 10 kilograms. A premium is usually charged above the “spot price” of gold to cover manufacturing costs.
- Coins: these are available in lower weights than bullion. The UK’s flagship gold coins are the Sovereign and the Britannia. The Royal Mint is currently charging £122 for a 2022 916.67 Fine Gold Quarter Sovereign. Both coins are legal tender in the UK and as such are free of capital gains tax and VAT for residents. British.
- Jewelry: jewelry, especially antique pieces, is another option. However, you can pay a markup of at least 20%, and often much higher, over the gold content. This covers the labor cost of design and manufacturing and the retail margin
- Digital Gold: this allows you to buy and hold fractions of the 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, while share prices of mining companies correlate with gold prices, their prices are also influenced by other factors.
- Buy gold and commodity funds: Specialty commodities, mining and exchange-traded funds can offer investors exposure to gold, without the difficulties of trading it and storing it in physical form.
*Gold price data above is provided by Zyla Laboratories, which uses asset price data from a wide range of sources. This gold price represents an average of spot gold prices on several major metal exchanges. Prices are updated every business day.