Gold prices have soared to near-record highs, yet UK investors appear hesitant to embrace the precious metal, with new data revealing that nearly half of the UK population has never invested in gold.

A survey conducted by The Gold Bullion Company showed this disconnect, as 48.3% of respondents have never made an investment in gold. Despite this lack of participation, awareness of gold as an investment option remains robust across all age groups, with figures ranging from 86.9% to 91.6%.

The highest awareness is found among those aged 65 and over, where 91.6% acknowledge gold's investment potential, while the 45-54 age group exhibits the lowest awareness at 86.9%. Also, younger generations, including Gen Z and Millennials, show similarly high levels of awareness, with around 90% familiar with gold investment opportunities.

Among those willing to invest, Millennials emerge as the most active demographic. They show a strong preference for modern investment vehicles such as gold exchange-traded funds (ETFs), with 42.9% participating, and gold bars, at 19.0%.

In contrast, older generations, particularly baby boomers, tend to favour traditional forms of gold investment, with more than one in five (20.7%) opting for gold jewellery. Interestingly, despite being the most aware of gold investments, a significant portion of older generations remain uninvolved, with two-thirds (65.5%) of those aged 65 and over reporting they have yet to purchase any gold products.

Geopolitical tensions, particularly concerns surrounding Israel and Iran, are lending strong support to gold prices. With these risks unlikely to ease in the near term, analysts suggest that gold may remain near its record levels.

At the time of writing, spot gold was trading at $2,656 per ounce, up 0.1%, while US gold futures was hovering around $2,669

The precious metal is also being buoyed by market expectations of interest rate cuts by the US Federal Reserve. Lower interest rates are generally viewed as a boon for gold, as they diminish the opportunity cost associated with holding non-yielding assets.

Read more: Gold rises to near record highs even as interest rate cut hopes fade

Geographically, awareness levels vary, with Bristol, Glasgow, and London leading the way – more than 90% of respondents in these cities recognise gold as an investment opportunity. This heightened awareness in major urban centres may correlate with their roles as financial hubs.

Even in cities like Southampton (86.7%) and Manchester (88.2%), familiarity with gold as an investment remains high. On the other end, Norwich reported the lowest awareness, with 20.3% of residents unaware of gold investment options.

When it comes to actual investment, London and Manchester are notable hotspots for gold purchases, particularly physical products. In Manchester, nearly a third (31.2%) of respondents have invested in gold bars, and 29.9% have bought gold coins – the highest figures across all cities. London follows suit, with ETFs (20.3%) and gold jewellery (22.5%) proving popular.

However, cities such as Liverpool, Edinburgh, and Cardiff reveal much higher proportions of individuals who have not engaged in gold investments, with more than 60% in each location indicating a lack of participation.

Among investors, gold jewellery remains the preferred choice, with 20.1% of respondents opting for this product. Gold ETFs rank second, attracting nearly one in five (17.5%) investors, hinting at a trend toward accessible gold investment options that do not require physical storage. Gold coins also feature prominently, with 13.4% of respondents having previously invested in them.

The survey also revealed distinct patterns in investment behaviour between genders. Approximately half of both men (49.3%) and women (47.4%) have never invested in gold. However, among those who do invest, men are more likely to purchase physical products like gold bars (14.4%) and coins (17.3%), compared to women at 8.1% and 10.1%, respectively.

Men also show a greater inclination to invest in gold mining stocks (8.4% vs. 3.0% for women). Conversely, women display a preference for gold jewellery (21.3% compared to 18.8% for men) and are more likely to invest in gold ETFs (19.9% vs. 14.6%).

How to invest in gold

As an alternative investment, gold offers a way to diversify portfolios and protect against market volatility. Defined as a departure from traditional assets like bonds and equities, alternative investments can encompass a variety of assets, including art, real estate, hedge funds, and precious metals like gold. For those looking to shield their investments from uncertainty, gold warrants consideration.

When it comes to investing in physical gold, options include gold bars and coins. The Royal Mint reported a 7% increase in gold bullion purchases, signalling a growing interest among investors.

While gold coins are a popular choice — especially among collectors — their premiums for design may not yield a return on investment. Some coins may appreciate in value over time, making them an intriguing option for collectors. For a more straightforward investment, gold bars offer a purer form of metal. When purchasing, ensure that the gold's purity exceeds 99.9% for coins and 99.95% for bars to benefit from VAT exemption.

It's also worth noting the capital gains tax (CGT) advantages of British legal tender coins. "The sovereign and the gold and silver Britannia coins have a unique status as legal tender, meaning profits made on their sale are exempt from CGT," Paul Atkinson, co-founder of Atkinsons Bullion & Coins, told Yahoo Finance UK.

In contrast, profits from selling a gold bar could be subject to CGT rates as high as 28%. While the initial purchase price of a bar may be slightly lower, the potential tax burden makes coins a more appealing option in the long run.

Read more: Pound, gold and oil prices in focus: commodity and currency check

The survey also revealed a broader hesitance among respondents regarding investments in general. Nearly two in five (36.6%) have not made any investments outside of gold, pointing to uncertainty about diversifying into other assets. Among those who do invest, shares (28.4%) and stocks (18.9%) remain the most popular options, suggesting that traditional financial markets continue to dominate the investment landscape.

Cryptocurrency has also gained traction, with over one in six (17.2%) individuals participating in digital currencies, marking a significant shift in investment preferences compared to newer assets like non-fungible tokens (8.2%).

Generational differences further underscore shifting investment trends. While 34% of those over 65 invest in shares, this figure declines among younger cohorts, with only 21.3% of Gen Z investors opting for traditional stocks. Instead, Gen Z shows a marked interest in modern, speculative investments, engaging more actively in cryptocurrencies (17.3%) and NFTs (12.0%) than in traditional assets like mutual funds or precious metals. They also exhibit enthusiasm for real estate (22.7%) and stocks (26.7%), although a significant proportion (29.3%) has yet to make any investments.

Millennials, on the other hand, appear to strike a balance between high-risk and stable investments, leading in cryptocurrency engagement (33.2%) and real estate (28.8%), while also participating in stocks and shares (21.5% each). Their non-investment rate stands at a lower 19.1% compared to Gen Z, reflecting a more active investment approach.

The survey asked 2,000 people in the UK about their familiarity with gold opportunities, the types of gold items they have invested in, and their other investment ventures.

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