Solomon Global: Golden Opportunities for UK Private Investors
The gold market has had a remarkable run, with 2024 seeing repeated all-time highs and 2025 already following suit. On February 11th of this year, the price of gold reached its highest level ever recorded in sterling terms – £2,383.82 per troy ounce – driven by a combination of global economic trends and UK-specific factors.
Gold is up 45% against the pound in just 12 months. To put this meteoric rise into perspective, the UK’s FTSE 100 index increased by 12% over the same period1. While global macroeconomic influences have fuelled much of gold’s spot price increase, domestic economic challenges and political uncertainty have also played a role in the historic rise of gold against the pound. The factors that propelled the metal in 2024 remain key influences this year.
Solomon Global Explains Why Gold is Rising Globally
Last week, gold hit a new all-time high in dollar terms and continued upwards to an unprecedented and psychologically important level of $3000 [Read more here: Gold soars to $3,000 as Trump ramps up trade war – and one expert predicts price will hit $4,500].
Global uncertainty continues to shape the economic and geopolitical landscape. A fragile financial system, ongoing conflicts, and shifting political dynamics—most notably caused by the return of Donald Trump—have created a volatile situation that shows no signs of stabilising. The Trump administration’s aggressive stance on trade, with its imposed and threatened tariffs, and its unpredictable foreign policy are unsettling markets, while concerns grow over potential escalations in global tensions. According to the Atlantic Council’s Global Foresight 2025 survey, 40% of global strategists and foresight experts anticipate a world war within the next decade—one that could involve nuclear capabilities. On the economic front, global inflation is expected to remain high until at least 20282, likely exacerbated by the uncertainty surrounding Trump’s economic policies and their potential repercussions on global trade and financial stability.
Amid this turbulence, gold remains a safe-haven asset. Heightened geopolitical risks, economic slowdowns, and inflationary pressures have only reinforced its strategic role. Central banks worldwide continue to increase their gold reserves, further strengthening demand and reaffirming gold’s position as a critical store of value.
UK Investors Turning to Gold
“Up 45% against the pound in the last twelve months; if you don’t have gold as part of your portfolio, why on earth not?” – Jim Mellon, Chairman of Master Investor
Over the past 12 months, Solomon Global has seen a surge in new gold investors and existing clients increasing their holdings. The driving force behind this trend is preserving wealth in the face of global uncertainty and deep-rooted domestic challenges.
Here, we examine why the price of gold is increasing and why UK private investors are increasingly turning to this time-tested asset.
Inflation and Economic Challenges
The UK’s inflation rate recently hit a 10-month high of 3%, reigniting concerns over prolonged price pressures. Food inflation has reached a five-month peak, prices at the pump are now at a six-month high and energy bills will rise again in April. The UK economy continues to grapple with sluggish growth and fiscal pressures underscored by The Bank of England halving its growth projection for 2025 to 0.75%. With the looming risk of stagflation, investors are turning increasingly to gold as a hedge.
Legally Avoid Paying Capital Gains Tax (CGT) with Gold
The tax burden is increasing in the UK, and tax-free benefits are being gradually eroded. However, gold can still offer a tax-efficient strategy for investors. All Solomon Global’s British legal tender coins are exempt from capital gains tax (CGT), allowing investors to keep 100% of all profits and preserve wealth in a way that remains largely untouched by government policy changes. Gold coins also have the benefit of being exempt from VAT.
Interest Rates and Weakening Sterling
Interest rates are at their lowest level for 18 months. Subsequently, as a non-yielding asset, gold becomes more attractive.
Lower interest rates generally weaken a currency; if sterling weakens, gold priced in GBP naturally becomes more expensive. With the potential for more interest rate cuts this year, we could see a depreciation of the pound pushing the GBP price of gold higher, even if global gold prices remain stable. At the same time, inflation remains a concern, which adds extra pressure on the pound while further reinforcing the role of gold as a store of value.
The Outlook for Gold in 2025
As the UK navigates economic challenges, Solomon Global continues to see private investors turn to gold as a more stable and reliable investment. This trend highlights the enduring appeal of gold as a hedge against uncertainty and a means to safeguard wealth.
With no likely immediate – or even medium-term – prospect of anything on the domestic or international scene settling, we feel it is highly probable that gold’s historic run will continue home and away. The strong performance of the precious metal in 2024 and the start of 2025 underscores its enduring appeal as a wealth preservation tool. It remains a compelling option for UK investors looking to diversify and protect their portfolios.
1 FTSE 100 close at February 23rd, 2024: 7,706.28 – FTSE 100 close at February 24th, 2025: 8,658
Gold v GBP close at February 23rd, 2024: £1606.60 – Gold v GBP close at February 24th, 2025: £2337.65 (source: ADVFN)
2 https://www.ifo.de/en/press-release/2025-01-14/experts-expect-inflation-remain-high-until-2028
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