Gold prices are hitting an all-time high of $2,700 – and Royal Mint says buyers are switching from bars to coins for one big reason.

Britons are buying up gold coins instead of gold bars, the Royal Mint says, as prices rise and customers try to avoid rumors of a rise in capital gains tax.

Gold prices breached $2,700 an ounce for the first time today as concerns over the US elections and tensions in the Middle East boosted demand for a safe haven for investments.

The Royal Mint says sales of bullion bars, which are subject to CGT, have fallen by 11 percent annually in the quarter to the end of September 2024.

That is likely to be driven by concerns that the Chancellor will increase CGT on investment gains to 39 per cent in the October 30 Budget, up from 10 to 20 per cent now, depending on your tax band.

However, the Mint has seen tremendous growth in the purchase of gold and silver bullion coins, for which CGT is not liable.

Sales of The Royal Mint bullion coins rose to a record high over the same period, with sales up 110 percent compared to the same period in 2023.

The Royal Mint said most of this came from the sale of gold coins.

What also increases interest in gold is the rising price of the precious metal.

Experts expect the gold price to continue to rise in the coming months.

Stuart O’Reilly, of the Royal Mint, said: ‘The gold price has had several tailwinds in recent months.

“Beneath the surface, the types of assets investors prefer are changing. While gold and silver can help investors strengthen and diversify their portfolios, our record quarter for bullion coin sales reflects the renewed focus on tax-efficient investing.

‘Our data suggests that investors are increasingly looking to protect their future investment gains, preferring CGT-exempt investments such as bullion coins over products subject to CGT.’

How to invest in gold

There are a few ways you can get exposure to the precious metal.

One way is to buy physical bars or coins.

These can be kept at home (ideally with adequate security and insurance cover) or kept in a secure safe, such as that of the Royal Mint, for a fee.

Certain gold coin products issued by the Royal Mint have legal tender status and are therefore exempt from CGT and VAT.

You can invest in gold yourself via Exchange Traded Commodities (ETCs). Tracking the price of gold in this way is no different from holding a passive investment in a stock index.

These are exchange-listed funds that offer investors exposure to the gold price, backed by physical investments in gold bars held in secure vaults.

You can hold ETCs in a Sipp or Isa to protect gains from tax. Investors should be wary of ETFs that gain exposure through derivatives rather than physically holding the precious metal, as these are complex and may incur costs that are not immediately visible to the naked eye.

Another way investors can gain exposure to gold is through multi-asset funds.

> What drives the price of gold and how do you invest?