The Practicality of Buying and Owning Gold Over Silver

When deciding between gold and silver, practicality plays a huge role. For UK investors, gold offers certain advantages that make it a more practical choice. Here’s why buying and owning gold might be the better option for you.

1. Compact Value

Gold has a higher value per unit of weight compared to silver. A single ounce of gold is worth significantly more than an ounce of silver, meaning you can store a substantial amount of wealth in a much smaller space. For investors with limited storage, this is a clear advantage.

For example, while both metals are often stored in bars or coins, you’d need 90 ounces of silver to match the value of just one ounce of gold. This compactness also makes gold easier to transport and secure.

2. Lower Storage Costs

Because gold is so valuable in small quantities, it takes up less space than silver, and thus, its storage costs are generally lower. Whether you're storing your gold in a home safe or using a professional vault service, you'll find that the expense is much lower than it would be for silver. Additionally, gold's dense value means fewer worries about transporting large quantities, reducing logistics costs.

3. VAT Exemptions

One key benefit for UK buyers is that gold bullion is exempt from VAT, while new silver attracts a 20% VAT charge. This makes gold not only a more compact store of value but also a tax-efficient one. Investors purchasing gold bullion coins or bars, such as Britannia or Sovereign coins, can keep more of their investment intact without the added cost of tax.

4. Liquidity and Market Demand

Gold is traditionally seen as a safe-haven asset, particularly in times of economic uncertainty. It tends to be more liquid than silver, meaning it's easier to sell gold at market value, with less of a gap between buying and selling prices (often referred to as the "spread").

Gold’s high demand, both as an investment and in industries such as jewellery and technology, helps maintain its liquidity. Silver, while also in demand, is more volatile and often sees higher spreads, making gold the safer bet for those looking for ease of sale.

5. Long-Term Stability

Gold has historically proven to hold its value over the long term. While both metals experience price fluctuations, gold's movements tend to be less erratic. It is considered a hedge against inflation and currency devaluation, making it ideal for those looking to preserve wealth over time.

6. Reputation and Security

In the UK, gold has always been viewed as a prestigious and reliable store of wealth. Whether it’s through coins, such as the famous Sovereign and Britannia, or through gold bars, owning gold has cultural and historical significance that adds to its reputation as a solid investment. While silver has its own merits, gold remains the preferred metal for serious investors, both for its ease of ownership and its long-term security.

Conclusion

When considering practicality, gold stands out as the more efficient, cost-effective, and reliable investment compared to silver. Its compact value, lower storage costs, and VAT exemption make it an appealing choice for UK investors. While silver has its place in a diversified portfolio, gold offers the practicality and stability that many are looking for when safeguarding their wealth.