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Physical Gold vs Paper Gold

You are ready to dive into the gold market, but you aren’t sure if you should choose paper gold or real gold. Once you compare paper gold vs. real gold, the decision will be clear. Let’s take a closer look at the paper and physical gold markets.

Paper Gold Market vs. Physical Gold Market – An Overview

The paper gold market refers to stocks or shares in exchange-traded funds (EFTs). People generally invest in paper gold for one of two reasons. They either want to gain exposure to gold or use it to hedge physical holdings.

The physical gold market is just as it sounds. You actually invest in real gold. You can keep the gold yourself or use a secure storage facility to house it for you.

Perth Mint Gold bar

Comparing Paper and Physical Gold — How Do They Stack Up?

When you invest in physical gold, you have the control and assurances that come with physical ownership. That’s not the case with paper gold. Many companies that issue paper gold don’t have enough assets to back all the gold. That means if everyone were to cash out at the same time, there wouldn’t be enough gold to go around.

You know exactly what you’re paying for with physical gold

The physical gold market provides a natural hedge against a banking or monetary crisis and systemic collapse. If such a collapse occurs and all confidence is lost in paper money, gold will retain its value and can still be used to purchase items. However, if institutions no longer have confidence in paper, people who have paper gold might be out of luck. They might not be able to trade it in for real gold. They could lose all their assets if such a collapse were to occur.

Finally, the cost is also worth exploring when comparing paper gold vs. real gold. You know exactly what you’re paying for with physical gold. You will spend money on the cost of the gold, storage, and insurance. That’s not the case with paper gold. You can expect different fees, including management fees, built into the price. That means you’ll end up spending more for less when you choose paper gold.

Protect Your Investment with Physical Gold

With the defined relationship between gold and economic uncertainty, its benefits are well documented. Choosing physical bullion investment provides distinct benefits, when compared to alternatives. If you are interested in physical bullion investment and storage, enquire with us today.

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