Tips on buying and selling gold for the short term

GotPrincess

Hey everyone!

I have some disposable income each month, and I’m thinking of putting it into physical gold. The reason I want to invest in gold is that it should be easy to convert back into cash if I need it quickly. Plus, since it's in the form of bars or coins, it’s not something I can easily spend like my regular savings (I admit, I have little self-control!).

I know the general advice is to have 6 months' worth of expenses saved up, which I do, and then invest in stocks and shares along with gold. My plan is to do both, but in the short term, I’d like to build up a small reserve of gold—around £3-5k—that I can access if needed in a pinch.

My question is:

How do I know what the best type of gold to buy is? How can I ensure that I don’t lose too much value if I need to cash it out in the short term (within a year)? Essentially, I’m looking for advice on what kind of gold to buy to avoid taxes and make sure I get as close to the spot price as possible without being taken advantage of by buyers/dealers and getting good prices when I'm buying so I dont over pay for the gold itself in the first place

Hope that makes sense!

InvesterJones

No, it doesn't make sense. If you need access quickly and/or are looking for the short term, then stick with cash-like investments - cash, money market funds, short term bonds etc. Gold price is very volatile, which is the opposite of what you should look at for short term.

GotPrincess

InvesterJones said:

No, it doesn't make sense. If you need access quickly and/or are looking for the short term, then stick with cash-like investments - cash, money market funds, short term bonds etc. Gold price is very volatile, which is the opposite of what you should look at for short term.

I totally get the ups and down of said market and i'm willing to take that into account but I am set on owning a small amount of gold 5k isnt a lot for a rainy day imo so with that in mind I'd rather just be pointed in the right direction however I appriciate your advice im just choosing to disregard it as I am set on having a small amount of gold 

masonic

If you are happy with the prospect of only getting £3k for the gold you bought with £5k a while earlier, then there are plenty of options to buy and sell close to the spot price.

It is a common question on the forum, see:

https://forums.moneysavingexpert.com/discussion/6343947/gold-coins

https://forums.moneysavingexpert.com/discussion/6275772/buying-gold-sovereigns

etc

It would be unwise to buy bars, as these are subject to capital gains tax if sold for a profit.

GotPrincess

masonic said:

If you are happy with the prospect of only getting £3k for the gold you bought with £5k a while earlier, then there are plenty of options to buy and sell close to the spot price.

It is a common question on the forum, see:

https://forums.moneysavingexpert.com/discussion/6343947/gold-coins

https://forums.moneysavingexpert.com/discussion/6275772/buying-gold-sovereigns

etc

It would be unwise to buy bars, as these are subject to capital gains tax if sold for a profit.

Totally get what ya mean however I would not sell it if it dropped in such a chunk in a short time so the ideal is to buy coins over bars 

Emmia

GotPrincess said:

masonic said:

If you are happy with the prospect of only getting £3k for the gold you bought with £5k a while earlier, then there are plenty of options to buy and sell close to the spot price.

It is a common question on the forum, see:

https://forums.moneysavingexpert.com/discussion/6343947/gold-coins

https://forums.moneysavingexpert.com/discussion/6275772/buying-gold-sovereigns

etc

It would be unwise to buy bars, as these are subject to capital gains tax if sold for a profit.

Totally get what ya mean however I would not sell it if it dropped in such a chunk in a short time so the ideal is to buy coins over bars 

Do you have a cash emergency fund already put away in a savings account or cash like savings like premium bonds?

I find having savings with a different provider to my current account means I can't see the money when I log into my online/app banking - so it doesn't "exist" for spending unless I really need it.

I use Chip for this purpose, which takes money out of my account every 4 days building up a savings pot, it uses open banking and AI to work out how much to take. Chip is usually quick to return money to my current account if I want to withdraw.

If you don't have an emergency fund. I'd suggest you get that together (3-6 months worth ideally) before taking a foray into gold.

fwor

You're not likely to get many people on here with much enthusiasm for gold as a short or medium term way to store savings. The first negative is that it's basically a non-productive asset, so you can't rely on it increasing in value due to interest or dividends, so it really is just a gamble as to whether it goes up or down in value.

And of course physical gold is a security liability - someone will try to take it off you if they get the opportunity.

In terms of savings, there are a few ways to avoid having it too easily available to spend (but still available if you really need it). For example Premium Bonds, where you have to jump through a few hoops and wait a short while before the money gets paid back to you, or Notice accounts, where there are a few banks that offer 7, 14 or 30 day notice accounts, depending on how much of an obstacle you want to put in the way of impulse spending!

subjecttocontract

Gold sovereigns are readily available to buy in many places but do you want to buy at the historically highest price it's ever been ?

daveyjp

You may as well go and buy casino chips.  They also produce no investment income, but they can't be spent anywhere and you do at least get back what you pay for them.

wmb194

When I see charts like this my thoughts are to sell rather than buy but gold seems to have gripped people's imaginations recently though they find it hard to explain why beyond central bank buying.

Albermarle

GotPrincess said:

masonic said:

If you are happy with the prospect of only getting £3k for the gold you bought with £5k a while earlier, then there are plenty of options to buy and sell close to the spot price.

It is a common question on the forum, see:

https://forums.moneysavingexpert.com/discussion/6343947/gold-coins

https://forums.moneysavingexpert.com/discussion/6275772/buying-gold-sovereigns

etc

It would be unwise to buy bars, as these are subject to capital gains tax if sold for a profit.

Totally get what ya mean however I would not sell it if it dropped in such a chunk in a short time so the ideal is to buy coins over bars 

You can easily buy and sell ETF's ( investment funds) that follow the price of gold.
So no worries about storing gold coins in your house ( presume you would have to tell your house insurer and buy a safe)