It’s official: the UK has caught gold fever. The Royal Mint is experiencing an unprecedented surge in demand for gold bullion coins, with investors piling into the market like never before. According to new data, revenues from gold bullion sales skyrocketed by 153% in the fourth quarter of 2024, driven by geopolitical uncertainty, falling interest rates, and a growing desire for tax-efficient investments.
But what’s really behind this rush for gold? And is there still room for growth, or have we reached the peak? Jenny Hunter, Senior Financial Journalist at IFA Magazine, spoke with Stuart O’Reilly, Market Insights Manager at The Royal Mint, to get the inside track on what’s fuelling this golden boom.
What’s driving the golden surge?
“The gold market has been on fire,” O’Reilly tells us. “Gold prices hit all-time highs, and investors are responding in droves. We’ve had two consecutive record quarters for bullion coin sales, with demand particularly strong towards the back end of 2024.”
So, what’s behind this surge? O’Reilly points to three major factors: geopolitical uncertainty, falling interest rates, and central bank demand. “2024 was the biggest year for elections in global history. There’s a huge amount of political uncertainty, not just in the UK but around the world. When people don’t know what’s going to happen next, they turn to gold.”
Lower interest rates are also playing a crucial role. “With rates coming down, government bonds start to look less attractive. That reduces the opportunity cost of holding gold, which doesn’t pay interest, making it a more appealing option.”
And let’s not forget the central banks. “Last year, Poland was the biggest central bank buyer of gold, along with countries like Hungary, Georgia, and Serbia. These aren’t necessarily the names you’d expect to be leading gold purchases, but given their proximity to Russia, they’re thinking about economic security.”
A silver lining…
While gold is stealing the headlines, silver and platinum are also seeing a boost. “Silver is often seen as the cheaper alternative to gold, and we’ve seen a knock-on effect in demand,” says O’Reilly. In 2024, silver prices rose by 23%, and platinum is finding new relevance due to its use in hydrogen fuel cells.
Green energy is also playing a role in silver’s resurgence. “Solar panels use a huge amount of silver, and with the rise of electric cars, we’re seeing growing demand for silver in battery technology. Samsung, for example, has reportedly developed a new battery that uses up to a kilo of silver.”
For platinum, the shift is even more pronounced. “Historically, platinum was used in catalytic converters for diesel cars, but with the decline of diesel, there was concern about where demand would come from. Now, hydrogen fuel cells are emerging as a major new market.”
Coins cash in
One of the most surprising drivers of the gold rush? A tax advantage. UK gold coins, like Britannias and Sovereigns, are exempt from capital gains tax (CGT). That means investors can cash in on rising gold prices without paying tax on their profits.
“Coins have been a huge part of the growth story,” O’Reilly confirms. “Sales of gold bullion coins were up 206% in Q4 compared to the previous year. Investors are doing the maths and realising that with gold’s historical growth rate of around 11% per year, CGT exemption makes a massive difference over time.”
The Royal Mint’s recent press release supports this, showing record-breaking demand for tax-efficient products. “Sales of Digital Silver rose 848% year-on-year, which tells us that people are actively seeking tax-efficient ways to invest.”
Gold bar logistics
While investors are watching prices, few are thinking about the logistical challenges behind the scenes. O’Reilly gives us a fascinating look at what’s happening with physical gold shipments.
“There’s been a bottleneck in the market due to gold flowing out of London and into New York ahead of potential US tariffs,” he explains. “Gold is usually traded on paper, but with uncertainty around tariffs, traders are actually taking physical delivery. That means thousands of gold bars are moving from London to New York, needing to be recast into different bar sizes.”
This has led to an eight to twelve-week backlog at refiners. “People are panicking about a gold shortage, but it’s not a shortage—it’s a logistical traffic jam. If tariffs don’t happen, we’ll likely see the reverse, with gold flowing back into London.”
Is it too late to buy gold?
With gold at record highs, is there still room for it to rise? O’Reilly thinks so. “The big question is whether gold will hit $3,000 an ounce. Right now, we’re just under $2,900, but two-thirds of analysts surveyed by the LBMA think we’ll break $3,000 in 2025.”
Silver is another interesting play. “Some analysts predict silver will hit $40, up from its current $32-33. It’s a smaller market than gold, so it tends to see sharper price movements when demand rises.”
The key takeaway? Gold isn’t just a short-term trade—it’s a long-term store of value. “Retail investors and central banks are buying gold for the same reasons: it’s a hedge against inflation, it performs well in a crisis, and it’s a way to diversify a portfolio.”
The future is digital
With the rise of digital investments, how is The Royal Mint keeping up? “We’ve got exchange-traded products (ETFs), and our DigiGold platform lets people buy fractional ownership of gold bars stored in our vaults,” says O’Reilly.
The biggest advantage? Flexibility. “You can buy gold from £25, and unlike physical gold, there’s no need to worry about storage. But while it’s cheaper than buying coins, it doesn’t come with the CGT exemption.”
For silver and platinum, The Royal Mint offers VAT-free digital options. “Normally, if you buy silver in the UK, you pay 20% VAT. But if you buy Digital Silver, you don’t.”
Gold’s enduring allure
Whether it’s political uncertainty, tax efficiency, or the sheer historical appeal of gold, one thing is clear: the UK’s love affair with precious metals is stronger than ever. With central banks hoarding gold, investors looking for safe havens, and even silver and platinum finding new uses in the green economy, the case for investing in precious metals remains compelling.
As O’Reilly puts it, “Gold has been a store of value for over a thousand years. That’s not changing anytime soon.”
For those watching the markets, the message is clear: whether you’re buying coins, bars, or digital gold, the golden era of investing is far from over.
About Stuart O’Reilly
Stuart O’Reilly is The Royal Mint’s Market Insight Manager, where he provides valuable analysis and insights on the precious metals market, competitors, and The Royal Mint’s customer behaviour. Stuart joined The Royal Mint in 2017 after completing his History degree at the University of Oxford and an initial role at HM Revenue & Customs. He played a key role in developing The Royal Mint’s Gold for Pensions offering before transitioning to a broader position within The Royal Mint’s Insights Team. Stuart now leverages his deep understanding of the market and customer needs to inform and shape both tactical and strategic plans for The Royal Mint.
