The price of gold today, as of 9:08am, was £1,455.59 per ounce. That’s up 0.33% on yesterday’s closing price of £1,450.75.
Compared to last week, the price of gold is up 0.20%, and it’s down 0.22% from one month ago.
The 52-week gold price high is £1,517.35, while the 52-week gold price low is £1,416.17.
Gold Prices Today
Gold Price Over Time
How to invest in gold
Many investors consider gold to be the ultimate safe-haven asset. When the prices of shares, bonds and property drop sharply, gold may hold its value – and its price can even increase as nervous investors rush in to buy.
Investing in gold is 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 pros and cons…
One option is to buy gold in physical form:
- Gold bars. Known as bullion, gold bars are a popular choice for buying gold. Bullion is typically sold by gram or ounce. Purity, manufacturer and weight should be stamped on the face of the bar.
- Gold coins. The Sovereign and Britannia are popular collectables that command a premium over what you would get for the same amount of gold in the form of bullion.
- Gold jewellery. Like gold coins, you’ll probably be paying extra for gold when you buy it in the form of jewellery – a premium that could be anywhere from 20% to 300%, depending on the manufacturer.
Alternatively, investors can invest in gold indirectly:
- Gold shares. Buying the stocks of gold mining or processing companies is another way to invest in the yellow metal. You don’t get to own physical gold, but you do get exposure to the rise and fall of the price of gold in the market.
- Gold funds. There are a range of funds that provide exposure to gold. They may invest in gold stocks, or they may trade gold derivatives in the options and futures markets.
Should you invest in gold?
You should invest in gold if you’re looking to hedge against risk or diversify your portfolio. Gold would not be your first choice to earn 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, and that means that gold isn’t an entirely stable investment. In fact, you can easily craft 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 an income.
Is gold an inflation hedge?
Studies have found that gold may 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 time periods, the inflation-adjusted price of gold fluctuates dramatically, making it a poor near-term hedge for inflation.
Frequently Asked Questions
Is buying gold better than holding cash?
Inflation reduces the ‘real’ value of a currency over time. Or, put another way, £50 today buys you less than it did 10 years ago. However, gold can provide a way 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 holds its value. Periods of high inflation often correspond with a rise in interest rates and general economic uncertainty. As a result, gold is seen as a safe haven and, in theory, increased demand results in a rise in price.
Over the last 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). Whereas the average base rate (a proxy for the interest rate on savings) was 3% over this period, according to the Bank of England.
Adjusting 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 may offer investors a safe haven in times of economic and geopolitical volatility. It also provides a way of preserving wealth in a high inflation environment. As with shares, the price of gold is volatile. However it has delivered an increase in value over the last 30 years.
Investors should also consider the effect of foreign currency movements when deciding whether to buy gold. Gold is typically…
Read More: Gold Price Today UK – Forbes Advisor UK