how to invest in precious metals in uncertain times

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Buying pure gold or silver might seem like an extravagant gesture, but experts agree that purchasing precious metals can be a secure investment during times of financial and political uncertainty.

Many people with real wealth will have some gold set aside, says Damian Matthews, who runs Matthews Auction Rooms in Kells, Co Meath, and acts as a broker for people who want to buy and sell gold privately.

Matthews is fascinated with the trade in gold and, to a lesser extent, silver by institutional investors – particularly central banks of a wide range of countries – to private individuals, keen to cushion some of their wealth against inflation and market volatility.

Central banks also buy gold reserves to provide insurances against international market volatility, but interestingly, even since US president Richard Nixon broke the direct link between the US dollar and American gold reserves in the 1970s, many other currencies – including the euro and the British pound – followed suit. Now, such national and international currencies are known as fiat currencies, which are not backed by a physical commodity such as gold or silver.

This historic change in printing money without the backing of a commodity, according to bullion dealers – that is, those who trade in precious metals – has increased the allure of buying gold and silver, either in bars, coins or jewellery.

The price of precious metals fluctuates daily on international markets but the price of gold tends to rise and fall more slowly, and generally increases in value over time due to the limit of supply and rising demand.

But, it’s a case of buyer beware, because there is a lot of fake gold around. Experts advise people to be careful if buying gold on the high street or from online marketplace websites. “It’s important to go to a reputable dealer to buy gold. And I’ll test everything before I sell it,” says Matthews.

The Dublin Assay Office, which also sells gold bars and commemorative and international coins, will test the purity of precious metals. And if the item conforms with the legal requirement for purity, the office will give it the appropriate hallmark.

If you do opt to buy gold bars, it’s a good idea to buy a number of smaller weights, such as 10g, 20g, 100g, rather than 1kg bars, so that you can sell them over time

Matthews suggests coins are the best way to collect gold and silver. “For example, if you buy an English gold sovereign, you’ll know it is 7.9g of 22-karat gold,” he says. One gold sovereign is worth about €510 now compared with about €400 in 2023. Other highly collectible gold and silver coins include South African Krugerrands, Canadian Maple Leafs, American Eagles, Austrian Philharmonics and Australian Kangaroos.

However, if you do opt to buy gold bars, it’s a good idea to buy a number of smaller weights, such as 10g, 20g, 100g, rather than 1kg bars, so that you can sell them over time. Storage is of course also an issue if you buy gold. Some people opt to keep it in a safe in their home, while others prefer to rent a safe-deposit box in places such as the Merrion Vaults on Burlington Road, Dublin.

Matthews’s next auction on Tuesday, July 16th, will include 350 lots of a single owner’s collection of pure silver coins, medallions and ingots. These include a coin commemorating the seven signatories of the Irish Proclamation (€70-€120) and a 500g pure silver ingot from Switzerland (€350-€550).

“I’m offering many of the lots without a reserve to see whatever they make on the day,” says Matthews. He suggests that many of the items will make a lovely start for new collectors and that silver is a good starting point for small investors.

“A bidder could very easily buy them for less than their scrap value, never mind the additional numismatic value,” he says.

Three-stone 2.5-carat diamond ring, crafted in 18-carat yellow gold (£3,000-£5,000) at Ross’s jewellery auction

An Art Deco inspired bracelet in 18ct white gold with 13ct of diamonds (£22,000-£24,000) at Ross’s jewellery auction

Meanwhile, if you prefer to wear your precious metals, buying fine jewellery is an option. Ross’s Auctioneers and Valuers at 37 Montgomery Street, Belfast, will host an auction of fine jewellery and watches on Thursday, July 18th, from 7pm.

Philippa Harty, from Ross’s jewellery department, suggests a three-stone 2.5-carat diamond ring, crafted in 18ct yellow gold (£3,000-£5,000), as one of the highlights of the 530 lots. Other highlights include an Art Deco-inspired bracelet in 18ct white gold with 13ct of diamonds (£22,000-£24,000).

Seven limited-edition bottles from the Redbreast Dream Cast series

Finally, while it might not be to everyone’s taste, there is a growing interest among investors in purchasing fine whiskeys and spirits. Among the many lots in the current Bonhams online auction of whisky (Scottish spelling) and spirits – which ends on July 17th – is seven limited-edition bottles from the Redbreast Dream Cast series, offered directly from Midleton Distillery in Cork (£8,000-£14,000). A tutored tasting at the distillery and two nights at the five-star Cork hotel, Castlemartyr Resort, is included in the lot.

matthewsauctionrooms.com; rosss.com; bonhams.com