Do gold bars have you laughing all the way to the bank? Or are skyrocketing sales of Banksy's artwork the way to go? In this investment head-to-head, we lay out the pros, cons and did-you-knows of buying and selling gold vs. art.

Gold vs. Art: Which is the Better Investment?

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is fundamental for growing wealth and securing financial stability. 

But when it comes to deciding where to put your money, are you better off

Choosing the right asset class hinges upon your 

has been considered a safe-haven asset. A secure and dependable way of storing wealth in times of market volatility or high inflation. 

With its long-term price stability, it’s an essential part of any 

. Especially if an emerging artist suddenly becomes popular, or an investor picks up a bargain at an auction house.

But deciding on whether to invest in art or gold depends on your investment goals:

Are you saving for a short-term goal like a wedding? 👰

Whatever you’re saving for, it’s important to align any investment choices you make with your individual goals. This way you can track potential returns and effectively manage risk.

we compare gold and art as investment options

Why is liquidity important in an investment?

🌊Liquidity is how easy it is to sell something and get cash in return. 

The more liquid an asset is, the easier (and faster) it is to sell or convert into usable money.

In short: the more liquid your asset, the less likely you are to lose money when selling it. 

Property, land, and machinery are all types of 

. They can be more difficult to sell. Especially at speed.

This is one of the major differences between 

. Available in standardised forms, such as coins and bars, makes it easier to trade in a well-established global market. 

This means that, in general, sales can happen relatively quickly and at

Remember that if you store your gold at home and later decide to sell it to a local gold store, you may face 

This is because buying and selling art often involves a more intricate process, necessitating assessments of the artwork's authenticity, provenance, condition, and market demand.

A man raising a number at the auction

typically take place through galleries, auction houses, or private sales. They can be time-consuming to complete thanks to negotiations and evaluations.💸

What’s more, art investment is considered speculative. The value of art can be driven by external factors like an artist’s reputation, market trends, and individual preferences.

 as an example. Once heralded as the future of art collecting (the tokens use blockchain as a digital certification of the authenticity and ownership of an asset), the price of NFTs collapsed in September 2023. Most are now worthless.

Liquidity issues and high transaction costs in the art market also contribute to its 

Be careful to conduct thorough research and weigh up the 

Gold is generally viewed as a stable investment 

as It offers a reliable store of value and tends to act as a hedge against economic uncertainties.

Art investments, meanwhile, usually carry a higher level of speculation due to their subjective valuation and reliance on market dynamics. This makes them more susceptible to price fluctuations. They can be more challenging in terms of risk, too.

The value of gold tends to rise during economic trouble, making it a reliable asset to protect your wealth.

. Its low correlation with assets like stocks and bonds helps spread risk, enhancing stability.

 The value of gold often rises as the purchasing power of fiat currencies decreases due to inflation.

 Gold has historically maintained its value in the long term, making it a safe way to store your wealth.

Highly liquid, gold can be quite easily bought or sold in various markets worldwide.

Gold can provide potential gains to investors if markets rise. When the price of gold increases in the market, investors who hold gold can sell it at a higher price than what they paid for it, resulting in potential gains. But it’s important to keep in mind that the profit potential in gold is closely tied to market movements, and is different from that of stocks or property. 

Investors save money on taxes when buying investment-grade gold because it's exempt from VAT in many countries.

 Unlike stocks or property, gold does not generate any regular income like dividends or rental yields. It relies on price appreciation for returns.

Storing physical gold securely can incur costs, whether it's stored in a safe deposit box, a vault, or through a third-party storage service. (Unless you choose our

Works by renowned artists or emerging talents have the potential for substantial appreciation in value over time, offering significant returns on investment.

 Adding art to an investment portfolio potentially reduces overall portfolio risk due to its typically low correlation with traditional financial assets.

Just like gold, art is a tangible asset, providing aesthetic enjoyment and cultural value, in addition to its investment potential.

 Owning a piece of art offers a sense of exclusivity. It's unique to you, and not everyone can have the same piece.💍

 In some jurisdictions, such as the UK and the US, buying art can be tax deductible.

The value of art is highly subjective and can be volatile, influenced by trends, tastes, and economic factors, making predicting its appreciation challenging.

 Art is considered illiquid, as selling artwork can be time-consuming and uncertain. Finding a suitable buyer and negotiating a price can take a significant amount of time.

 Buying and selling art often involves high transaction costs, including auction fees, dealer commissions, insurance, transportation, and storage expenses.

 Verifying the authenticity, provenance, and condition of some artworks can be challenging. Forgeries can lead to a loss in investment value.

Owning art does not generate income, such as dividends or interest, and only provides a potential return upon sale.

A well-diversified portfolio including cash savings, property and gold

, a strategy that spreads investments across a variety of assets to 

Not putting all your eggs in one basket, if you will.🥚

By diversifying, investors seek to minimise the impact of adverse events in any one sector or asset, thus enhancing the

 as its market price works upon the fundamentals of demand and supply rather than its correlation with other assets such as oil prices and the weakness of currencies. 

will also potentially strengthen its resilience.

with traditional financial markets, driven instead by factors unique to the art world. That makes it less affected by economic cycles.

, art also has an intrinsic value, which means it can be a store of value independent of the performance of the financial market. 

This can be a good thing during economic downturns. 

A Banksy mural

However, this is not always the case. As artists fall out of favour, the losses can be huge as well. 

‘The Merge', the world’s most expensive NFT, sold for $91.8 million in December 2021.

 In June 2023, research found that 95% of NFTs are now effectively worth nothing.

Whilst that’s an extreme example, even works by the likes of Damien Hirst have lost as much as 30% of their value over time.

So whilst art can yield substantial returns, it’s also seen as a speculative investment.

Tax implications for buying gold vs. buying art

and art will depend on several things, including: 

Here’s an overview of what you need to know about the tax implications for buying gold vs. buying art:

Gold vs. art tax table

Investment-grade gold is not subject to VAT throughout the EU, the UK, and the USA. 

you may be eligible for a capital gains tax rate

 of up to 39.6% if you’ve owned the artwork for less than a year. For works held longer than a year, the rate drops to a maximum of 28%.

A visual representing risk balancing

) is how much you're willing to gain or lose on an investment.

Investments can generally be split into three categories:

such as high-yield savings accounts and corporate bonds;

such as cryptocurrency, and venture capital.

In short: the greater the risk, the greater the rewards – but the greater the chance of losses too.

This is why it’s good to first work out your

 may require more stable and less volatile investments, while

 may allow for higher-risk investments that potentially offer greater returns.

 analyse your capacity for handling losses

. It’s best to only invest what you can afford to lose.

Now it’s time to link your appetite for risk to your investments. 

Gold is historically considered a lower-risk investment 

due to its stability. If you want to invest in an asset but minimise your risk, gold can make a great portfolio choice.

Art on the other hand is more speculative

. Subject to market trends and individual preferences, works tend to have more volatility – and potentially higher risk. 

However, the returns can be much higher if you buy the right painting.🖼️

For balance, aim for a diversified portfolio that includes a mix of assets like gold, art, stocks, bonds, and property to mitigate your overall risk.

are also an essential aspect of buying and selling both gold and art assets.

These costs can impact your overall return on investment, so carefully consider the following ahead of purchase.

From the initial purchase cost and dealer commissions to storage fees, paying for security and covering the price of insurance, there are plenty of things to think about before buying gold.

Each company charges fees in different ways. Some require management fees; others will only ask for a commission when you sell.

To get a true sense of your investment, carefully work out both upfront and ongoing costs.

When buying physical gold, there can be a premium paid over the spot price (the market ‘melt price’) to cover production and operational costs.

Calculate any storage fees. Many are likely to be ongoing.

Essential for protecting your investment from theft and damage. By the way, our free storage solution comes with insurance coverage. ⭐

 Some dealers will charge gold, and you may receive slightly less than the spot price due to market dynamics and the dealer's spread.

When purchasing art as an investment, there are a lot of additional costs to consider, including auction house fees, insurance, maintenance and preservation costs, and much more.

Be sure to work out both the upfront and ongoing costs as well as any fees you’ll need to pay when you sell your art. Things to look out for:

If buying art at an auction, auction houses charge a buyer's premium, typically a percentage of the winning bid, in addition to the bid amount.

The fee added to the sale price by an art dealer or the gallery.

Your art should be insured to protect against theft, damage, or loss. Premiums will vary based on the artwork's value.

 Depending on the nature of the art, you may need to pay maintenance and preservation costs, including restoration 

Unless displaying at your home, expect to stump up for climate-controlled storage.

 Whether you’re selling via an auction house or a dealer, you will also have to pay a fee to sell your artwork.

So if we were to compare the average costs of buying gold on GOLD AVENUE, vs. the costs of purchasing art as an investment at an average, here’s what it would look like:

Gold vs art additional costs

Based on this table, from a cost point of view, it seems like gold might be a better option.

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