Although the price of gold may be volatile in the short term, it has always maintained its value over the long term. Over the years, it has served as a hedge against inflation and the erosion of major currencies and is therefore an investment worth considering. One of the advantages of investing in physical gold is that, if you need to collect it quickly, you can do it. However, gold coins and ingots are often sold at a higher price and are bought at a discount, so you may not get the market price when you need to sell.
Physical gold serves to protect your purchasing power or, as mentioned above, to ensure your purchasing power. Neither that nor the fact that an ETF is physically backed bring a person closer to owning gold. Unfortunately, some investors don't realize until they make their first purchase that the spot price isn't what you actually pay for physical gold. Investors must clearly understand that buying physical metals is not the only way to expose themselves to the gold market.
I like to think of physical gold and silver as financial insurance against inflation, which provides the ability to “set a specific rate”. However, physical investors in gold must also predict when they will want to sell their gold. Investing in gold, whether in physical metal or in gold-related securities, is a complicated decision and should not be taken lightly. Diversifying internationally sounds complicated, but storing some physical gold outside your home jurisdiction today is not difficult.
The opportunity cost of investing in physical metals instead of dividend-rich stocks could be considered another drawback. Here, Investing News Network explains what it takes to create and manage a physical gold portfolio. Physical metals will only generate revenue when you sell the metals, unlike the quarterly dividends associated with some stocks. Investors are encouraged to consider creating physical gold positions as a long-term investment, possibly even to save for retirement.
Gold values represent physical gold, but you don't have the right to exchange them for real metal.