Why Hold Gold
What gold is actually for, what it is not, and the structural advantage British buyers have.
Gold does not pay you anything. It has no yield, no dividend and no earnings, and anyone who tells you it always goes up is selling something. What it has is a four thousand year record of still being worth something when other things were not.
What it is actually for
Gold is not a growth asset and does not behave like one. It is held for the part of a portfolio that is not supposed to grow — the part that is supposed to still be there.
Its usefulness comes from behaving differently to everything else. It is nobody's liability: no government, bank or company has to stay solvent for your gold to remain gold. That is an unusual property, and it is the whole case.
Inflation
The relationship is real over long periods and unreliable over short ones. Gold has comfortably outpaced sterling's loss of purchasing power across decades. It has also had long stretches of going nowhere while prices rose. Treat it as protection over decades, not a hedge for next year.
The honest drawbacks
It yields nothing. It can fall hard and stay down for years — anyone who bought in 1980 waited a very long time. Physical gold costs something to store and insure. And the spread between buying and selling means you start slightly behind.
These are real, and a dealer who does not mention them is not being straight with you.
The British advantage
One thing genuinely favours UK buyers. Investment gold is free of VAT, and UK legal tender coins are free of Capital Gains Tax for UK residents whatever the gain. Very few assets available to a private person are exempt from CGT at any size. That is a structural advantage, not a sales pitch.
General information, not investment advice. The value of gold can fall as well as rise.