RISK INFORMATION

Risk Information

‍Physical gold can lose value. Before you buy, please read this page in full.


‍Gold is not a regulated investment in the UK


‍Buying, selling and storing physical gold is not a regulated activity under the Financial Services and Markets Act 2000. London Gold Xchange Ltd is not authorised or regulated by the Financial Conduct Authority in relation to this activity.

This has practical consequences. You will not have access to the Financial Services Compensation Scheme if things go wrong, and you will not be able to refer a complaint to the Financial Ombudsman Service. Our complaints procedure is set out on our Regulatory Status page.


‍The value of gold can go down as well as up

‍The price of gold is volatile. It can move sharply and it can remain depressed for extended periods. The value of your holding is variable and you may get back less than you paid, including after costs. Past performance is not a reliable indicator of future results. No forecast of the gold price, including any we may publish, can be relied upon.


‍Gold produces no income

‍Gold generates no interest and no dividends. Any return depends entirely on selling it for more than the total you paid to acquire and hold it. Holding gold typically incurs costs rather than generating income.


Costs reduce your return

‍The quoted gold price is the spot price for large wholesale bars. It is not the price available to individual buyers. The difference between the two includes:

- the premium over spot payable on purchase, which varies by product, weight and availability;
- the spread between our buying and selling prices, which means a holding is typically worth less than the purchase price immediately after acquisition;
- storage and insurance charges, where applicable;
- delivery and insured transit costs, if you take physical possession;
- verification or assay costs that may be incurred when reselling metal that has left professional custody.

All applicable costs are disclosed in writing before you commit to a purchase.


Realising your investment takes time and the price is not guaranteed

‍Gold is widely traded, but it is not a cash equivalent. Converting a holding into cash involves finding a buyer, agreeing a price against a live market, and settlement. Our buy-back commitment is made at a stated spread to the live market price at the time of sale. It is not a price fixed in advance, and it is not the price you originally paid.
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‍Currency risk

‍Gold is priced internationally in US dollars. If you buy or sell in pounds sterling, changes in the dollar to sterling exchange rate will affect your return, potentially more than movements in the gold price itself.


‍Storage carries specific risks

‍If you store gold at home, check your household insurance first. Bullion is commonly excluded or subject to a low cap. An uninsured loss is a total loss.

If you use a third party storage provider, you are relying on that provider. Ask whether the metal is allocated and held in your name, whether it is segregated from the provider’s own assets, what the insurance covers and to what limit, and what happens if the provider becomes insolvent.


‍Tax treatment can change

‍The tax treatment of gold depends on the product and on your personal circumstances, and it can change. Certain UK legal tender coins are currently exempt from Capital Gains Tax; bars are not. Investment grade gold is currently exempt from VAT in the UK. Inheritance tax may apply. We do not provide tax advice. You should consult a qualified tax adviser about your own position.


‍Concentration risk

‍Holding a large proportion of your wealth in a single asset increases your exposure to that asset. Whether gold is suitable for you, and in what proportion, is a decision for you, or one to take advice on from a regulated financial adviser.


‍Fraud

‍Counterfeit bullion exists and so do fraudulent dealers. Buy from established dealers who source from refiners on the LBMA Good Delivery list, insist on full documentation, and be wary of unsolicited approaches, high pressure sales tactics, and offers of guaranteed returns.


‍We do not provide advice

‍London Gold Xchange Ltd does not provide personal financial, investment or tax advice. We explain the options, the costs and the mechanics of ownership and storage. The decision, and the responsibility for it, is yours. If you want a recommendation on whether gold is suitable for your circumstances, consult a financial adviser authorised by the Financial Conduct Authority.