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How does gold investment work?

For a new investor, a question we are often asked is how does gold investment actually work? Many investors are used to more in-depth investments with annual yields, or actively managing stocks etc. While there are several different ways to invest in gold, some of which can be more complicated, at BullionByPost we focus solely on physical gold.

Physical gold is one of the simplest assets to invest in. Other investments, even including other commodities, are often much more complicated. The introduction of management funds and banks increases third-party risk, and takes control away from you.

A private investor looking to put money into a commodity, such as oil for example, would never buy a physical barrel. Physical gold is much more feasible as an investment, and more accessible: it can be bought easily, is controlled solely by the investor, and historically has performed very well (as the chart below shows).

Chart showing the gold price for the past 20 years.

Gold investment is generally considered a long-term venture; prices move based on global economic and political factors, but over long periods of time gold holds its value, and historically makes gains as well. This is because gold is considered a safe-haven asset. Gold is not linked to financial trends in the way many other investments are; negative interest-rates, and stock-market crashes, actually tend to benefit gold. This makes gold ideal for diversification of portfolios, and protection of wealth. Learn more about why you should buy gold.

How gold investment works

At it's simplest, physical gold investment works as follows:

  • Buy physical gold bullion (bars or coins)
  • Keep it safe over however long you wish to keep it
  • Sell it at a later date when you wish to realise the funds

Making a gold investment is easy when you buy physical bullion from companies such as BullionByPost, and anyone can do it. Physical gold can be bought virtually as easily as any other online product. With just a few minutes you can set up an account, choose your item, and place your order. Read more about how to buy gold from BullionByPost.

Once you have received your gold you can store it somewhere safe, then simply leave it to protect your wealth, and potentially accrue value. There's no hassle of deciphering investor summaries, nor any meetings with banking advisors - you can just sit back with the peace of mind that your wealth is protected. For those making a large investment who do not feel comfortable storing at home, we even offer a simple storage service starting from just £10 a month, giving you peace of mind.

When you feel it’s the right time to sell your gold this is just as simple a process, and BullionByPost are happy to assist with this too. You can sell your gold to us at competitive rates; this can be done via post or in person. Our experienced team can be contacted on 0121 634 8060; they will give you a quote for your items, and talk you through the process of selling them to us. Items can be sent to us via post or – for customers who prefer a more personal experience – our trade desk is open five days a week, and is located conveniently in Birmingham city centre.

Though there are decisions to be made over what products to buy, how to store it safely, and when to sell, that is how gold investment works, it truly is that simple. Buy, store, sell. This simplicity is one of the reasons so many investors choose to invest in gold to protect their wealth.

Gold Bars

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Gold Coins

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Gold Britannia

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Gold Sovereign

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