Precious metals investments have surged in the first half of the year with gold and silver prices in sterling increasing by 13.6% and 19.1% respectively during this period.
These developments have drawn more investors into the market with sales of all investment coins rising 14% year-on-year between April and June 2024 and overall silver bullion sales increasing by 36% compared to the same period last year.
As prices have accelerated against the backdrop of geopolitical uncertainty and global volatility, the UK’s Royal Mint said investors have shifted their focus to precious metals investment products with a lower price point such as quarter ounce gold bullion Britannia coins (current unit price: £500-520) and silver Britannia coins (current unit price ex VAT: £30-32).
Silver coin sales have increased 55% year-on-year in the first quarter of the financial year with gold coin sales increasing by 9% during the same period.
Tax efficient bullion investment
For many investors, these investment-grade bullion coins offer a more accessible and tax-efficient way to invest in precious metals as bullion coins produced by The Royal Mint are classed as Capital Gains Tax (CGT) free investments for UK residents.
From April this year, the annual exemption allowance for CGT has halved to £3,000, leading to more investors favouring CGT-exempt investments such as bullion coins. In the first quarter of this financial year, 59% of gold physical bullion investments were in coins compared to last year, when this was evenly split between precious metals coins and bars.
Largest ever order of bullion coins
In May, The Royal Mint received its largest ever order of bullion coins through a multi-million pound investment order that is being stored in the company’s vaulting facility in South Wales. Earlier this year, research from The Royal Mint found that 44% of UK investors are considering investing in CGT-exempt bullion coins to build their wealth and reduce their tax liability.
Commenting on the data, Stuart O’Reilly, Market Insights Manager at The Royal Mint said: “So far this year, precious metals have been propelled by rising demand and positive market sentiment as the outlook for gold and silver has remained promising. Despite rate cuts remaining on the back burner for major central banks, precious metals have benefited from increasing investor allocations to ‘safe haven’ assets while central bank buying of gold has been the perfect scaffold for elevated prices. It is clear from the data that investors are finding new ways to strengthen their portfolio with gold and silver.”
O’Reilly said that as interest grows in previous metals investing, investors are also being smart in how they invest in gold and silver.
Fractional bullion coins have offered investors a means to invest in a tax efficient through lower sums that protect their future investment gains. Over the last few years, The Royal Mint has produced a range of new investment products, ranging from small bars to fractional coins, enabling investors to buy precious metals in new ways that facilitate their approach to investing. This has gone far in improving accessibility for investors while democratising precious metals investments for first-time and existing investors.