How investors are taking a shine to precious metals

INVESTORS are continuing to diversify their portfolios with exposure to ‘ safe haven’ assets such as gold, silver and to a lesser extent platinum.

According to precious metals dealer BullionVault, the number of first-time buyers in the metals over the past three months has been running at five times the level of last year. This is despite a tail-off in the price of all three metals in the past couple of weeks.

Over the past year, gold has performed the strongest, rising in sterling terms by some 28 per cent while silver and platinum prices have increased by 20 and 3 per cent respectively.

Adrian Ash, director of research at BullionVault, says: ‘The number of people seeking the relative price stability offered by precious metals has never been greater.

‘Gold and silver, in particular, are being seen as good hedges if inflation picks up at some stage.’

Investors can buy the metals in various ways. They can buy coins and bars through organisations such as Royal Mint, although 20 per cent VAT is payable on silver and platinum. There is also a spread – anything between 5 per cent and 10 per cent – between buying and selling prices.

Alternatively, they can buy the metals that are then held in a vault, avoiding VAT in the process. Major players include BullionVault and Goldmoney. The final route is via a stock market listed fund: one that either tracks the price of a specific metal (an exchange traded fund) or invests in a portfolio of mining company shares.