The value of gold has soared to record highs in 2024, with the price reaching £1,936.41 in August – a 22% increase since January.
This has been attributed to hopes of a cut in interest rates and also to geopolitical events, which traditionally strengthen gold as a solid investment during turbulent times.
Is gold a good investment?
If you are considering options for asset management in Cheshire, gold has been a solid ‘safe haven’ investment for centuries, and tends to hold its inflation-adjusted value well over time.
This is in part because stocks are scarce, having already been exhaustively mined. Investment analysts say gold is a reliable portfolio diversifier and a dependable insurance policy that behaves differently to other assets, and equities in particular.
It is not invulnerable, however, and has crashed in value on different occasions over the last century, losing around 60% between 1980 to 1982 and 45% from 2011 to 2015. Moreover, gold is not usually considered a smart investment when interest rates are high, because it does not pay out. It does, however, become more attractive when currency weakens in value and when central banks introduce interest rate cuts.
How to invest in gold
If you think you have the Midas Touch, you can invest in gold via various methods, including Exchange Traded Commodities or through multi-asset funds, tracking their performance on the markets. You can also purchase physical gold bars or coins with necessary security checks for storage in safety deposit vaults. It is worth checking to see if these items are classed as legal tender and exempt from Capital Gains Tax or VAT. Of course, it’s always worth chatting to an independent financial adviser, too.
