Gold price hits record high of $2,700 - and Royal Mint says buyers are turning from bars to coins, for a key reason.
- Gold prices in the UK have risen above $2,700 per ounce due to political and global tensions.
- Sales of bullion bars fell by 11% compared to last year, while gold bullion coin sales surged by 110%.
- Investors are increasingly favoring tax-efficient gold investments as concerns about rising capital gains tax loom.
In the United Kingdom, gold prices recently surpassed the $2,700-per-ounce mark, influenced by rising concerns regarding the US elections and ongoing tensions in the Middle East. This price surge has been driving investors towards gold as a safe haven asset. Despite this increase in demand, sales of gold bullion bars have dropped by 11% during the quarter ending September 2024, potentially due to speculations that capital gains tax (CGT) rates might rise significantly in the upcoming Budget announcement on October 30. Such conditions have prompted investors to reconsider their strategies regarding gold investments. Conversely, The Royal Mint has experienced an unprecedented increase in the purchase of gold and silver coins, which are exempt from CGT. In the same quarter, sales of bullion coins surged, achieving record revenues that were 110% higher compared to 2023. Most of this growth is attributed to sales of gold bullion coins as investors seek tax-efficient investment alternatives. The rising demand for CGT-exempt investment products reflects a broader shift in investor preferences, prioritizing asset protection over traditional investments subject to higher taxes. Experts predict that the price of gold will continue to rise over the following months as global uncertainties persist. This market dynamic indicates a lasting shift in how investors are approaching gold, favoring coins and other tax-efficient options rather than bars, as they seek to protect their future profits. The current gold market exemplifies the impact of broader economic concerns on individual investment decisions. This trend highlights the increasing importance of tax considerations in investment strategies, shifting focus toward assets that can offer long-term security without the burden of taxation.