Listen to Episode 536
On this week’s show we discuss what is driving the rally in gold and the current investment bank predictions for where the price of gold might go. We then explain the different ways that you can invest in gold, along with the pros, the cons, the costs and the risks.
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Episode 536 Podcast Summary
The rise and fall of Gold: Key drivers and predictions
Summary:
We analyse the record-breaking performance of gold, which saw a 65% increase in 2025 and continued momentum into 2026. We explain how factors such as national debt, a weakening US dollar, and geopolitical uncertainty- particularly surrounding US trade policies - have created a "perfect storm" for the precious metal. While some banks predict prices could reach $6,000 per ounce, we urge caution regarding "recency bias" in these forecasts.
Key Insights:
- A "Haven" Asset - Investors are moving toward hard assets like gold as a hedge against currency devaluation and record levels of national debt.
- The Dollar Connection - Gold is priced in US dollars; as the dollar weakened by 12% in 2025, gold became more attractive to international buyers.
- Central Bank Activity - Many central banks are shifting away from the US dollar toward gold to protect national wealth from inflation and trade disputes.
- The Volatility Factor - Recent 10% corrections serve as a reminder that gold can be highly volatile, requiring a disciplined approach to portfolio weighting
How to invest in gold
Summary:
We break down the different methods for investing in gold, catering to different budgets and risk appetites. We compare physical ownership with financial instruments like ETCs & ETFs. We look at the tax implications of each method and the difference between physical, synthetic, and sampled funds.
Key Insights:
- The CGT Advantage - British bullion coins (Sovereigns and Britannias) are exempt from Capital Gains Tax because they are considered legal tender.
- Physical vs. Paper - Physical ETCs hold actual gold in vaults, while synthetic ETCs use financial contracts (swaps), introducing counterparty risk.
- Gold Mining Shares - These are impacted by "operational leverage," meaning profits can rise and fall significantly faster than the gold price, but they also carry higher business and geopolitical risks.
- Digital Gold (DigiGold) - An accessible way to buy fractional amounts of gold, though this is unallocated and subject to Capital Gains Tax
The insurance trap
Summary:
The soaring price of gold has a direct impact on home insurance. Many people who own jewellery or gold items may find that their current insurance limits are no longer sufficient to cover the replacement cost at today’s market rates.
Key Insights:
- Underinsurance Risk - If your gold jewellery has doubled in value, it may now exceed the "single item limit" on your home insurance policy.
- Action Required - Homeowners should review their policy and obtain up-to-date valuations to avoid a shortfall in the event of a claim
Resources
Links referred to in the podcast:
- How to invest in gold
- Sign up to our weekly newsletter
- Take out a free trial of 80-20 investor
- Which is the best & cheapest Investment Platform
- Ep 523 - Investing in Gold Miners
- Ep 471 - Investing in Physical Gold
- Royal Mint
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