GOLD & SILVER - WHAT'S RIGHT FOR YOU
There are various ways you can buy into gold and silver. They each have their pros and cons and which of them is most suitable for you really depends on what it is you’re trying to achieve buy buying gold and silver.
If you are looking to trade the metals for shorter term profit and you don’t care about physical ownership, then a gold based ETF product with an ultra low premium may be a suitable option.
If you are looking to utilise the gold and silver in the form of jewellery as the primary reason, then buying jewellery may be the answer for you.
Perhaps you like the idea of buying into the physical metal with a 1:1 backing and at a low rate, but you don’t want to receive the actual metal and deal with the security risks, then allocated or unallocated gold and silver might be a good option.
If you’re after ownership of the metal and being able to receive it when you want, then bullion bars or coins could be a good solution.
We’ve put together this table to help you compare the different ways you can buy into gold and silver within the industry.
Note: Not all of these options are 100% physically backed and not all of them offer you ownership of the actual metal.
Form |
Pros |
Cons |
Bullion bars |
• Variety of sizes (1g-1kg+) • Low Premium • VAT free (gold) |
• Less liquid than other options • Storage/security concern |
Coins |
• Different sizes and purity • Collectability • CGT and VAT free options |
• Variety and value can be confusing • Condition affects value • Higher premium • Storage/security concern |
Jewellery |
• Has functional and personal use • Sentimental value |
• Workmanship premiums on top of gold price • Cost of precious stones added not reflected in metal content |
Allocated/ Unallocated metals |
• Cheap way to buy into metals • Physically backed 1:1 • Highly liquid |
• Redemption not always possible • Additional charges for redemption • Storage fees may apply |
ETFs |
• Very low premium • Highly liquid • No storage costs |
• No ownership • Not backed 1:1 • Counter party risk |
Understanding Gold and silver purity levels
Gold is sold in different purities in the market, where the fineness of the gold is measured in Karats. The more pure the gold the higher the value. The same can also be said for Silver.
Gold jewellery is usually made in 9kt - 22kt purity as gold is very malleable and to hold its shape well, needs to be mixed as part of an alloy. Silver in its purest form is actually softer than both gold and silver and for this reason, is also commonly alloyed with a secondary metal to add strength.
We’ve put together a this table to help you understand the most common purity levels in the market and how much gold content each contains.
Karats |
Parts of gold |
Pure gold content |
24kt |
24/24 |
99.9% |
22kt |
22/24 |
91.7% |
18kt |
18/24 |
75% |
9k |
9/24 |
37.5% |
Silver purity
For silver, its purity is expressed as ‘parts per thousand’ meaning for every thousand parts, how many parts are silver vs alloy. If we take .925 sterling silver as an example, it’s 92.5% pure silver and 7.5% alloy. Another popular purity is .958, which means that the metal is 95.8% pure silver and the alloy content 4.2%.