Making the decision to protect your wealth with physical gold is the first step. For a first-time buyer, the next part of the process—navigating the world of bullion—can often feel intimidating. What is a “premium”? Is a coin better than a bar? How do you know what you’re buying is genuine?
As specialists in precious metals, our job is to provide clarity. This guide is designed to cut through the jargon and walk you, step-by-step, through the essential things you need to know before you buy.
Step 1: Understanding the Price (Spot vs. Premium)
This is the most common point of confusion for a new buyer. When you see the “price of gold” on the news, you are seeing the “spot price.”
- Spot Price: This is the live, raw market price for a troy ounce of unrefined gold, traded in large volumes on global exchanges. It is the baseline.
You cannot, however, buy a 1oz gold coin for the spot price. This is where the “premium” comes in.
- Premium: This is the cost added on top of the spot price to cover the real-world expenses of creating and selling that item. This includes:
- Minting and manufacturing
- Assaying (verifying the purity)
- Insured transportation
- Packaging
- Our operating costs and service
The formula is simple: Spot Price + Premium = Your Final Price.
An expert tip: The premium per gram is almost always lower on a larger item (like a 1kg bar) than a smaller item (like a 1oz coin). This is because the manufacturing costs are very similar.
Step 2: The Core Choice – Coins vs. Bars
This is the most practical decision you will make. Both are excellent investments, but they serve different purposes.
Gold Bars
Gold bars are the most cost-effective way to purchase gold. Because their manufacturing cost is low, they carry the lowest premium, especially at larger sizes.
- Best for: The investor who wants to acquire the maximum amount of gold for their money and is focused purely on long-term, high-volume storage.
- Downside: Bars (unless they are from The Royal Mint) are subject to Capital Gains Tax when you come to sell them.
Gold Coins
This is where UK investors have a unique and significant advantage.
- Best for: The vast majority of UK-based investors, for one simple reason: tax.
- The Key Advantage: Gold coins produced by The Royal Mint, such as the Gold Britannia and the Gold Sovereign, are classified as British legal tender. Because of this status, they are completely exempt from Capital Gains Tax (CGT).
This is not a small detail. It means 100% of any profit you make on these coins is yours to keep. For most investors, this tax-free benefit far outweighs the slightly higher premium you pay upfront.
Step 3: How to Guarantee Authenticity (The LBMA Standard)
Your biggest fear is likely, “How do I know it’s real?” The answer is simpler than you think and doesn’t involve any magnets or acid tests.
The professional standard for bullion quality is the LBMA (London Bullion Market Association). The LBMA maintains a “Good Delivery” list of refiners that meet the highest global standards for purity and integrity. Refiners like PAMP Suisse, Metalor, and The Royal Mint are all on this list.
You guarantee authenticity by:
- Buying Bars: Only purchase bars that come sealed in their own “assay card,” which certifies their purity and weight.
- Buying Coins: Purchase from a dealer who sources directly from the mints.
- Buying from a Reputable Dealer: At RAX2 Assets, we only source our new bullion from these elite, LBMA-approved refiners. We will never sell anything we cannot 100% verify.
Step 4: Storing Your Gold (Delivery vs. Secure Vault)
Once you’ve bought your gold, you have two choices.
- Personal Delivery: We can deliver your gold to you, fully insured and in discreet packaging. Once it is in your possession, you are responsible for it. This means you must have a high-quality safe (not just a lockbox) and inform your home insurance provider, which can increase your premiums.
- Secure Vaulting: This is the option most serious investors choose for peace of mind. We offer a fully allocated, high-security vaulting solution.
- “Fully Allocated” is the key term. It means the specific coins or bars you buy are your legal property, held in your name. They are not on our company’s balance sheet and are independently audited. This is the most secure method of ownership.
Your Next Step: Expert Guidance, Not Hard Sells
The world of gold investment is built on trust, not on high-pressure sales. The process should not feel like buying a used car; it should feel like a professional, personal consultation.
As a family-run business, we believe in providing clarity and building long-term relationships. If you have more questions, our specialists are here to help you understand your options in a relaxed, no-pressure environment.
We invite you to contact us or to book a personal consultation at our Royal Tunbridge Wells office to discuss your strategy.
SEO Meta Description: A practical guide for first-time UK gold buyers. Learn the difference between coins and bars, understand spot price vs. premiums, and discover tax-free gold options. Expert, no-nonsense advice.