As the leaves fell, the price of gold rose to a recent high as markets desperately seek a safe haven from political and economic uncertainty – should you do the same with your cash and pension funds?
Check Out The Superb Infographic And Nifty Interactive Gold Map Below
The Gold Price Continues To Rise
With UK coins being completely tax free, buying Sovereigns and Britannias can act as a hedge against political and economic unrest.
Adding gold bullion to your SIPP or SSAS can provide balance and peace of mind to your long term savings plans, though your pension must hold physical gold and not the paper gold discussed below.
The World’s Biggest Paper Gold Market
The term paper gold means you have a piece of paper acting as a substitute for the physical gold.
With paper gold, you don't own the gold; you own a promise to receive physical gold.
It means you’re a creditor of the corporation issuing the paper gold certificate and you’re subject to counterparty risks. Owning the physical gold has no counterparty risk and is fully under your control.
Examples of paper gold are gold certificates issued by banks and mints, pool accounts, futures accounts and the NYSE listed exchange-traded fund.
With these products, you own a piece of paper rather than physical gold. These paper products give you exposure to the gold price; you can make a profit by selling them to someone wishing to own paper gold.
However, if the music stops and nobody wants to purchase paper anymore, it becomes worthless since you may not able to redeem your investment.
London Is Dominant In Global Price Discovery For Gold
Almost all gold (95 per cent) traded in London is unallocated and without legal title.
This makes it easier to trade, but it also raises concerns about a market that is opaque to begin with.
Incredibly, there are 5,500 tonnes of paper gold exchanging hands on paper each day, but there are only 300 tonnes of gold vaulted in London outside of the reserves for ETFs or the Bank of England.
An Inside Look at the World’s Biggest Paper Gold Market
Courtesy of Bullionstar.
The 10 Countries With The Most Gold Reserves
Click the image below to be taken to a lovely interactive illustration showing the 10 countries with the most gold reserves.
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AJ Bell Is Often The Best Value SIPP For Stockmarket Assets
Over time, charges can wipe out a huge part of your fund. We like AJ Bell because there are no set-up costs. If you hold passive funds, which is our preference, or shares, investment trusts, EFTs, gilts or bonds, you pay one small fixed fee no matter how large your fund. And when you come to draw your benefits either as occasional drawdown or UFPLS payments, there's a small charge for the whole year no matter how many times you access your money (many SIPP and SSAS providers charge more than this for each payment). However, you should always compare charges in detail, because AJ Bell could be more expensive than other providers, depending on the type of stockmarket assets you hold.
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As SIPPclub neither advises on, nor arranges, nor recommends specific investments or strategies, we're unable to say whether a SIPP or SSAS or any investment within it is right for you. Ultimately, it’s your money and your decision, and you should only proceed once you're satisfied you've undertaken sufficient due diligence. If you need advice, you should speak to your trusted adviser, or you could find a local adviser from Unbiased.co.uk. Alternatively, we'd be pleased to introduce to a suitably qualified independent financial adviser.
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You should always undertake your own independent due diligence before making any investment decisions. If you require advice about any products marketed through SIPPclub, then you should seek advice from an Independent Financial Adviser qualified to give advice on such investments. Do not invest unless you have carefully thought about whether you can afford it and whether it is right for you and if necessary consult with a professional adviser in accordance with the Financial Services and Markets Act 2000. This product is not regulated by the Financial Conduct Authority or covered by the Financial Services Compensation Scheme, which means you will not have access to the Financial Ombudsman Service. SIPPs are only suitable for individuals that take an active interest in their investments and have the time available to do this on a regular basis. Ordinarily, these individuals are professional investors or high net worth individuals with certified market sophistication which enables them to understand the risks. The value of any investment can go down as well as up and you might not get back what you put in. You may have difficulty selling any investment at a reasonable price and in some circumstances it might be difficult to sell at any price. The information on SIPPclub is intended to give you a general overview of what investment promoters do and what are reasonably believed to be potential investment opportunities. Information is provided as a guide only and is subject to change without prior notice and does not form part of any contract. Whilst every effort has been made to check the accuracy of the statements and historical data provided on SIPPclub, it is possible there may be errors and omissions. SIPPclub does not accept liability for errors, omissions or future changes.