Why Should I Keep Physical Gold at Home?
Many people choose to store physical gold at home in either their own vault or safe, for various advantages it brings.
Note, however, that storing gold bullion at home requires time and effort – as well as restricting your ability to sell quickly if there’s an unexpected price drop.
1. It’s a form of wealth preservation
Physical gold investing provides direct access to its value, making it an excellent form of wealth preservation in an increasingly political climate. Holding assets that protect against potential economic changes or total system collapse are essential steps toward safeguarding wealth for your own survival and protecting future generations.
Physical gold doesn’t require trusts and you don’t rely on third parties to safeguard it for you; something which cannot be said for investments such as Gold Exchange Traded Funds (ETFs) and stocks.
Physical gold can also be held anonymously if desired, though this comes at an added cost and needs to be stored safely; options include home safes or storage vaults. Furthermore, you may require purchasing insurance on these precious metals which wouldn’t apply with other investments.
2. It’s a hedge against inflation
Gold can act as a valuable inflation hedge, protecting purchasing power in times of rising prices and inflationary pressures. Gold’s price often tracks closely with inflation (although no scientific proof can back this claim up).
But the actual data around inflation is often contradictory and unclear – and gold doesn’t always match inflation’s pace – as we saw with inflation rising by 5% between 2021-2024 but gold not doing its part to protect purchasing power. For instance, CPI rose 5% but gold did not increase similarly.
Gold’s price depends on its measurement; if inflation measures go beyond CPI, gold may not serve as an adequate inflation hedge. Furthermore, owning physical gold may be costly due to dealer commissions, sales tax and storage costs; ETFs that track gold can offer more cost-effective and liquid solutions – however it’s still essential that you evaluate whether investing in physical gold suits your individual needs before making a final decision.
3. It’s a form of diversification
Gold has long been seen as an investment with high returns during times of economic volatility and uncertainty, offering diversification for portfolio managers looking to reduce risk in their overall investments.
Investors can purchase physical gold directly from mints, dealers or jewelers at a premium above its spot price; investors should take note when making these purchases as this can diminish returns significantly. Furthermore, storage costs for physical gold can be prohibitively costly; investors may require purchasing a fireproof home safe or renting one at their bank as well as working with a third-party custodian in order to safeguard their investments properly.
Physical gold offers an extra level of investment security not available through paper assets, particularly during times of political unrest when government interference may lead to seizure and confiscation of bank account funds for citizens. Gold can act as an extra line of protection from this potential overreach from government authorities.
4. It’s a form of insurance
Physical gold provides important insurance against economic crisis and instability, just like homeowner or car policies would. By keeping some physical gold on hand, investors can protect their investments from sudden market shifts that arise out of nowhere.
Gold as an emotional commodity can provide an emotionally fulfilling investment option; however, its inherent risks should not be overlooked. Unlike investing in businesses which may generate cash flow and dividends, buyers of gold depend solely on its price rising to see any return from their purchase.
Additionally, buying physical gold can be costly for investors; investors must cover shipping, security and storage expenses when purchasing physical gold, which can add up. When it comes time to selling an investment gold investment it is also important to remember all associated costs – fees from “we buy gold” companies may eat into your returns considerably and it is always advisable to search out competitive prices when selling precious metals.