Despite the price of gold reaching record highs in 2025, UK investors have been hesitant over the past three months, with the number of searches for ‘invest in gold’ dropping by 42%.
Rick Kanda, Managing Director at The Gold Bullion Company, has shared insight into why Brits are reluctant to invest in gold currently and whether silver could be a better option.
“Gold is currently hovering around $4,500 per ounce, which is slightly lower than May’s high of $4,700.1 The precious metal reached record highs in 2025, and despite many experts still predicting the price of gold could reach $6,000 per ounce by the end of 2026, investors have appeared reluctant to add gold to their portfolios over recent months.”
“Below, I have outlined several factors that could be causing reluctance to invest in gold right now.
- Geopolitical unrest – The conflict in the Middle East has had a more complicated effect on gold than many would expect. Prices jumped at the outset as investors moved into safe-haven assets, but they have since fallen back, and gold is now lower than it was when the conflict began. The spike in oil prices has stoked inflation fears, which has pushed expectations of central bank rate cuts further out and kept the dollar firm, and both of those work against gold. That tension is part of why buyers have held back rather than chasing the rally.
- US dollar performance – As gold is priced in dollars, the value of the precious metal can be influenced by how strongly the dollar is performing. Right now, the dollar is considered to be relatively strong, which can make gold more expensive for international buyers, resulting in reduced demand.
- Bond yields & interest rates – Investors will always look to generate additional funds, and gold can be impacted when interest rates and government bond yields are high. High interest rates will result in high street savings accounts offering strong and secure returns, while gold pays no interest, so it often struggles to compete during such periods.”
Is now the time to invest in silver as gold demand softens?
“Like gold, silver can play an important role in a well-balanced investment portfolio. Silver coins and bars offer investors a tangible asset that can help hedge against inflation and diversify holdings during periods of economic uncertainty. While silver tends to be more volatile than gold due to its strong industrial demand and smaller market size, this volatility can also create opportunities for long-term investors.”
“One of silver’s key attractions is its affordability, despite being subject to VAT at 20% in the UK. With a significantly lower price point than gold, silver coins and bars can provide an accessible entry into precious metals investing, making them particularly appealing to first-time buyers and those looking to build their holdings gradually.”
“For UK investors, silver Britannia coins offer an additional tax advantage. As legal tender produced by The Royal Mint, Britannia coins are exempt from Capital Gains Tax (CGT), meaning any profits realised on disposal are free from CGT liability. This unique benefit can make silver Britannias especially attractive compared with many other investment assets.”
Rick adds: “Investing in Silver Britannia coins allows you to benefit from the potential advantages of owning a physical asset that can act as both an inflation hedge and portfolio diversifier. Their lower entry cost compared to gold provides an excellent opportunity to gain practical experience in buying, storing and managing bullion, while also taking advantage of the CGT-free status available to UK investors.”
