Should I Keep Physical Gold?
Physical gold purchases – whether jewellery or bullion – can be costly due to dealer commissions, sales tax (in certain instances), storage costs and security considerations. Furthermore, buying physical gold may be less liquid and harder to sell.
Investors purchasing physical gold to preserve wealth and hedge against inflation often opt for storage at home; however, this may not always be the best solution.
1. It’s a form of insurance
Purchase physical gold bars and coins can add an extra level of security to your investment portfolio that ETFs don’t. Physical gold can be quickly sold at its full market value without needing to go through a middleman; whether selling it at a pawn shop or jewelry dealer, your money can arrive instantly.
Physical gold is an irreplaceable investment that cannot be liquidated through bankruptcy proceedings, yet you should plan for storage costs, the possibility of theft and insurance premiums when making this investment decision.
Storage at home poses the risk of theft, while purchasing or renting a safe from a bank can increase fees over time and eliminate savings realized from investing in gold over time.
2. It’s a form of wealth preservation
Physical gold comes with some costs associated with storage and insurance, but is an effective way to preserve wealth. Unlike stocks or bonds that may be difficult to liquidate quickly in an emergency situation, gold is easily traded globally; coins or bars can easily be sold to local jewellers or pawn shops without much difficulty.
Storing bullion at home carries risks. To ensure its safekeeping in an emergency situation, only one confidant must know where your gold is stored and how it can be accessed – this will reduce theft attempts as well. Alternatively, consider storing it with a secure company that offers additional advantages, such as guaranteeing no one has access to your assets even if that company goes bankrupt!
3. It’s a form of investment
Physical gold is an increasingly popular investment option that many individuals hold within their overall portfolios. Due to its long-term stability and value stability, gold makes an appealing alternative investment during times of economic instability.
Investors can purchase physical gold bullion from mints, precious metals dealers and jewelers; however, purchases can be costly due to dealer commissions, sales tax in some instances and storage fees. Furthermore, keeping physical gold at home increases the risk of theft.
Gold mining stocks offer another option for investors looking to diversify their portfolio with gold. These shares invest in companies that mine it, often correlating with its price. But these investments can also be affected by other factors like company management, country stability and production levels – leading to greater levels of volatility than physical bullion investments. A gold IRA is an ideal way for diversifying portfolios without holding physical bullion itself.
4. It’s a form of currency
Physical gold differs from stocks and bonds in that it does not pose counterparty risk – meaning that unlike companies it won’t go back on its promises or default on them if necessary. Furthermore, you have the option of keeping it anonymous by keeping it stored either at a vault or privately at home.
Gold can easily be seen as a form of currency by many. Being non-fiat means it cannot be debased by government manipulation such as deficit spending, quantitative easing and bailouts for financial systems.
Physical gold also allows investors to escape the banking system, though this does not allow for tax evasion – any gains you make must still be reported as gains on physical bullion investments are subject to taxes, though owning physical gold offers you some privacy that many other investments don’t allow for, particularly given how easily stored physical bullion can be at home or in a safe.