Learn
Gold, in plain English
Short guides to the questions readers ask us most. No jargon, no sales pitch.
01The basics
What “the gold price” actually means
When people quote the gold price they almost always mean the spot price: the price for one troy ounce of pure gold for immediate delivery, traded between banks and dealers in London and New York.
It is set in US dollars. The sterling price you see is the dollar price converted at the current exchange rate, which is why gold in pounds can rise on a day when gold in dollars is flat — a weaker pound alone pushes it up.
Twice each business day the LBMA Gold Price is fixed in London. Many contracts, funds and dealers use that fixing as their reference.
02Weights
Troy ounces, grams and kilos
A troy ounce is 31.1035 grams — about 10% heavier than the ounce used for food. Precious metals are always weighed in troy ounces.
A kilo bar contains roughly 32.15 troy ounces. Small coins and bars are often sold in grams, so it helps to check the price per gram when comparing them.
03Purity
Carats and fineness, explained
Purity is written as a carat or as fineness in parts per thousand. 24 carat is pure gold (999.9). 22 carat — used for Britannias and Sovereigns — is 91.67% gold. 18 carat is 75%, 9 carat is 37.5%.
Jewellery is priced well above its gold content because of design, labour and retail margin. Its scrap value is only the weight of fine gold it contains.
04UK tax
Gold and tax in the UK
Investment gold — bars and coins of at least 99.5% purity, and certain coins — is exempt from VAT in the UK.
Coins that are UK legal tender, such as the Sovereign and the Britannia, are exempt from Capital Gains Tax for individuals. Bars and foreign coins are not.
Tax rules change and depend on your circumstances. This is general information, not tax advice — check HMRC guidance or ask a qualified adviser.
05Costs
The real cost of owning gold
Physical gold is bought above the spot price (the premium) and sold back below it (the spread). On small coins the round trip can be 5–10% or more.
Storage and insurance add ongoing costs. Gold pays no interest or dividend, so its return comes only from price changes — which can be negative for years at a time.
06Stay safe
How to spot a gold scam
Be wary of cold calls, social media adverts promising guaranteed returns, pressure to act today, or anyone asking you to move a pension into gold.
Genuine dealers do not guarantee profits. Check that any firm you deal with is properly registered, and look it up on the FCA's warning list before you pay anything.