Gold price UK: what is the price of gold today, why is price per gram falling - and how to invest in bullion

With inflation rocketing in the UK - as well as in the wider world - and the country on the brink of a recession, you would expect gold prices to be flying.

But despite the economic shocks resulting from the Russia-Ukraine war, the reaction to the Covid pandemic and the continuing impact of Brexit, the price of gold is actually falling.

The precious metal is typically viewed as a safe bet by investors across the globe given it’s not as volatile as stock markets can be.

So what is the gold price today, why is it down - and how can you invest in bullion?

Here’s what you need to know.

What is the gold price today?

The internationally recognised benchmark for gold prices is set by the London Bullion Market Association (LBMA).

The LBMA price is set twice per day at 10.30am and 3pm London time.

Prices are primarily in US Dollars per Troy ounce (31.1g).

Troy ounces are used to judge the weight of precious metals and gems, and are based on a pound of 12 ounces rather than the traditional 16.

According to the LBMA’s afternoon price from Thursday 14 July, gold costs £1,441.51.

This price marks a 4.4% drop compared to June, but is 8.2% above where it was six months ago and is 9.8% up year-on-year.

Why are gold prices down?

Given the record inflation and stock market uncertainty currently being seen across the globe, you would think gold prices should be soaring.

Gold is usually seen as a safer bet than the markets because its scarcity and the difficulty of extracting it remain constant, which means it’s easier for it to maintain its price.

It’s also largely immune to inflationary spikes, meaning it can be used to preserve wealth.

However, as with every other commodity on earth, gold prices can fluctuate depending on supply and demand.

Demand tends to (but doesn’t always) go up when stock markets are volatile, raising the price.

For example, during the 2007/08 financial crisis the FTSE 100 plunged by 44%, while gold rose more than 90% in price.

But if the price of the US Dollar is rising, investors are more likely to move across to the currency markets, which decreases demand and sees the price drop.

Interest rate rises by central banks can also affect gold because when they go up, it indicates that investors can have more confidence when trading in stocks, shares and bonds, thus moving demand away from gold.

It is the rising value of the Dollar against other currencies and the threat of future interest rate rises that is driving the price of gold down at present.

While gold has been falling in price of late, it still remains at all-time record highs.

Investors flocked to the precious metal from February 2022 onwards as a result of the Russia-Ukraine war.

How do you invest in gold?

There are several ways in which you can invest in gold.

Whatever method you choose, you should consider how you will store your gold to maintain its purity, the cost of insuring it, the reputation of the place you’re buying it from, and the purity of the gold.

Here are three simple ways to invest in the precious metal:

Bullion

The gold bars you see in bank heist movies can be bought from the Royal Mint - a government owned company that produces the UK’s currency.

They are available in sizes ranging from 1g (which will currently set you back at least £68.82) to 11.3kg (400 OZ) - a size that costs almost £600,000.

All bullion from the Royal Mint is 24 carat gold with a fineness of 999.9, meaning it is as pure as you can get.

Each bar bears a stamp showing its quality and weight.

If purchasing bullion from the Royal Mint, it’s worth noting that it charges a premium above the current price of gold.

This pricing helps to cover its costs, including manufacturing.

You can opt to store your bullion in the Royal Mint’s vaults outside the town of Talbot Green in Wales (for an annual fee), or store it on your own property.

Coins

The Royal Mint also sells gold bullion coins.

These can be made of pure gold (Britannia) - like the bullion bars - or are available in slightly less pure 22 carat form (Sovereign).

They are measured in Troy ounces, with the smallest Britannia coin (1/10 OZ) currently available from £170.95 and the smallest Sovereign coin - the Quarter Sovereign - costing £112.03.

Perhaps surprisingly, these coins are legal tender in the UK - although banks and businesses don’t have to accept them.

Alongside these coins, the UK - and countries around the world, such as the US and China - sell commemorative gold coins.

There is also a market for historic coins that are considered to be collectable.

Jewellery

Buying jewellery is a way of investing in gold while also being able to enjoy it.

But it is likely to have a greater mark up than bullion or coins given the man hours and other costs the item’s craftsmanship requires.

To work out how much is being charged on top of the price of the raw gold, you’ll need to find out how pure the gold in the jewellery is as well as what it weighs, and then compare that to the spot price of gold.

It’s worth keeping hold of any documentation you get with the jewellery item as it will help you with any future valuation or sales process.