It was announced on Wednesday that, according to the Office for National Statistics, the UK’s inflation rate had risen to 3.6% in June.
With the prices of good and services on the up in the UK once more, and to an 18-month high as well, purchasing power for consumers buying everyday items will be decreased.
When it comes to the price of gold, inflation is extremely influential.
Gold typically performs well in economic uncertainty caused by global conflicts and taffis, and inflation is one variable where this is the same.
Because the commodity has a limited supply, the value of gold often rises during longer periods of high inflation, and investors sometimes turn away from stocks and invest in previous metals instead.
When is the best time to invest in gold?
Whilst these small increases to inflation rates won’t necessarily impact the price of gold, inflation helps put gold in a strong position of value. With other geopolictial tensions to keep an eye on as well, many experts believing there has never been a better time to invest in the metal, but any investment choice isn’t to be made lightly.
Gold investment should not be dependent on whether the market is either surging or falling; you should be more focused on whether your financial situation enables you to do so at that particular time. Gold should always be seen as a long-term investment strategy. The time is right if you have the funds, you are in a financially stable position, and you’re looking for an investment that will store value long-term without thought towards any short-term price fluctuations.
What next for gold prices?
We are now seeing expert forecasts of the precious metal reaching more than $3,675 (JP Morgan) by the end of 2025 – a value that is 40% above last year’s end price.
As we progress through 2025, gold could continue to see significant increases, especially if economic instability continues, as this will encourage central banks to keep at it with their aggressive gold-buying strategies. This behaviour from the banks is ultimately contributing to the upward pressure on gold prices.
In the past, gold has been a reliable investment option and safe-haven asset in times of market unpredictability, and by the looks of things, 2025 is going to be another year of just that. To sum up, all indications suggest that gold could have another year of impressive price rises, which gold investors should be happy about as this confirms its value.
What types of gold should you be investing in?
Gold coins are an increasingly important part of the average person’s gold investment plan. These offer a compromise between price and divisibility and liquidating them at gold dealers is relatively easy. In addition, UK coins, including gold sovereigns, half sovereigns and gold Britannia coins are Capital Gains Tax Free which makes them an appealing mid to long-term investment option.
Despite coins being viewed as the obvious choice for first-time value, small and first-time investors should look into both coins and bars. Manufacturing costs for bars are generally lower than those for coins, resulting in lower purchase prices per gram for gold bars. This could help maximise your profits if you go on to sell at a later date.
