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Gold was priced at £1,491.25 an ounce as of 9:07 am today. It is the same as yesterday’s closing price of £1,491.25.
Compared to last week, the price of gold has increased by 0.94%, and it has increased by 1.42% compared to a month ago.
The 52-week gold high is £1,506.00, while the 52-week gold low is £1,416.17.
Remember that investing in commodities like gold or investing in stock market funds is inherently risky and doing so puts your capital at risk. You may not get some or all of your money back.
Gold prices today
Gold price over time
How to invest in gold
Many investors consider gold to be the ultimate safe-haven asset. When stock, bond and property prices fall sharply, gold can hold its value — and rise in value as nervous investors rush to buy.
Investing in gold is also a way to add diversification to your investment portfolio. When you have a diversified mix of different assets, including gold, different returns can protect the value of your investment.
There are many ways to invest in gold. Each has its pros and cons…
One option is to buy gold in physical form:
- gold bars. Also known as bullion, gold bars are a popular choice for buying gold. Bullion is usually sold by the gram or 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 the form of bullion.
- Gold jewelry. As with gold coins, you’ll probably pay extra for them when you buy them as jewelry—a premium that can range from 20% to 300%, depending on the manufacturer.
Alternatively, investors can invest in gold indirectly by:
- Gold shares. Another way to invest in the yellow metal is to buy shares of gold mining or processing companies. You don’t get to own physical gold, but you get exposure to the rise and fall of gold prices in the market.
- Gold Funds. There are a range of funds that provide exposure to gold. They can invest in gold stocks or they can trade gold derivatives in options and futures markets.
Should you invest in gold?
If you want to hedge against risk or diversify your portfolio, you should invest in gold. Gold may not be your first choice for long-term capital growth.
Over the past five years, the price of gold has risen roughly 36% while the S&P 500’s total return has been 60%.
Gold prices can be extremely volatile, and that means gold is not a completely stable investment. In fact, you can easily build a fully diversified investment portfolio without gold.
It should also be noted that gold in its physical form, unlike other investments, does not generate income.
Is gold an inflation hedge?
Studies have found that gold can be an effective way to protect your wealth against inflation, but only over the very long term, measured in decades or even centuries.
In the short term, 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, to put it another way, £50 today buys you less than it did 10 years ago. However, gold can provide a way to protect the ‘real’ value of your assets against inflation.
During periods of high inflation, such as currently 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 coincide with rising interest rates and general economic uncertainty. As a result, gold is seen as a safe haven and, in theory, an increase in demand leads to an increase in price.
Over the past 20 years, annual inflation in the UK has averaged 3%, according to the Office for National Statistics. During the same period, gold prices have increased by an average of 9% per year (according to the World Gold Council). While the average base rate (a proxy for the interest rate on savings) during this period was 3%, according to the Bank of England.
Adjusted for an inflation rate of 3%, the ‘real’ value of gold has therefore increased by an average of 6% per year. In comparison, savers would not have experienced any ‘real’ increase in the value of the cash in the savings account due to the effect of inflation.
Is it a good time to buy gold?
Gold can provide investors with a safe haven during times of economic and geopolitical instability. It also provides a way to preserve wealth in a high inflation environment. Like stocks, the price of gold is volatile. However, it has increased in value over the last 30 years.
Investors should also consider the impact of foreign currency movements when deciding whether to buy gold. Gold is generally denominated in US dollars and, as a result, has an inverse relationship to 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 dollar terms has declined by 3% as the US dollar has strengthened against other currencies. However, gold prices rose 10% in sterling as the pound weakened against the dollar.
Overall, it is difficult to assess whether it is the right time to buy gold as its price depends on a number of factors. Although continued current levels of economic and political uncertainty may increase gold prices, investors should also be aware of the volatility of this asset.
Does gold fall in value?
Gold is a finite commodity with a relatively stable supply, meaning the price of gold is highly sensitive to changes in demand. So a fall in demand will lead to a fall in the value of gold.
For example, the price of gold fell by more than 25% from 2011 to 2013. It fell from more than $2,000 per troy ounce in mid-2020 to less than $1,700 in early 2021, down 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 determined by the London Bullion Market Association (LBMA) and there are two different types of gold prices:
- Fixed: LBMA members meet twice daily via conference call to agree on a price to clear their outstanding client orders. This is generally used for large gold orders.
- Place: This is a ‘live’ price that is often used to buy and sell gold bullion.
Is investing in digital gold profitable?
Digital gold (or digigold) is a form of digital currency that allows you to buy fractions of physical gold stored by a seller. Buyers of digital gold will own and hold legal title to the gold by acting as the seller custodian.
Digital gold enables buyers to invest by weight – say, £25 – by weight (as with a 1kg bar of bullion). Buyers can also invest a lower minimum amount than physical assets.
Digital gold also offers savings in terms of storage and insurance. For example, the Royal Mint charges a 0.5% annual management fee for its DigiGold products, compared to 1-2% for physical gold.
Because buyers own the underlying physical gold, their profit (or loss) will depend on the price of gold, which is covered in the questions above.
Which form of gold is best for investment?
You can buy physical gold in the form of bullion, coins or jewellery, or invest in digital gold:
- Boolean bar: These usually range in weight from one gram to 10 kilograms. A premium is usually charged above the ‘spot price’ of gold to cover production costs. The cheapest option currently sold by the Royal Mint is the one gram 999.99 Fine Gold Britannia Bullion Bar, which retails at £70.
- Coins: This bullion is available in weights less than twelve. The main gold coins in the UK are the Sovereign and the Britannia. The Royal Mint is currently charging £122 for the 916.67 Fine Gold Quarter Sovereign 2022. Both coins are legal tender in the UK, and, as such, are exempt from capital gains tax and VAT for UK residents.
- Jewelry: Jewelry, especially antique pieces, is another option. However, you may pay a mark-up of at least 20%, and often much more compared to gold content. This covers design and manufacturing labor costs and retail margins
- Digital Gold: This allows you to buy and hold fractions of physical assets, with a minimum investment amount and savings on storage and insurance costs.
Investors can also consider investing in indirect forms of gold, including:
- Buying shares of gold mining, refining and trading companies: However, although mining company stock prices are correlated with gold prices, their stock prices are also affected by other factors.
- Buying gold and commodity funds: Specialist commodities, mining and exchange-traded funds can provide investors with exposure to gold, without the hassles of trading and storing it in physical form.
*Above provided by gold price data Xyla Labs, which sources asset price data from a wide range of sources. This gold price represents the average of gold prices present on several leading metal exchanges. Prices are updated every working day.
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