Investing in physical gold is often seen as the most straightforward way to invest in this precious metal. Gold can be purchased in various forms, including jewelry, coins, or gold bars. “Gold bullion” usually refers to gold ingots or bars with a minimum purity of 99.5%. Coins that are officially minted for investment purposes, such as the American Gold Eagle or the Canadian Maple Leaf, are also widely accepted.
Advantages:
Physical Asset: Physical gold is a feeling of security since it is a physical asset that you can hold.
No Counterparty Risk: Physical gold eliminates the risk from financial institutions or market volatility.
Liquidity: Gold is quite liquid and can be sold in various markets.
Disadvantages:
Security and Storage:Physical gold must be stored securely, which incurs an additional expense.
Illiquidity: While it can be traded, physical gold may be slow and labor-intensive to liquidate into cash.
Premiums: Acquiring physical gold usually accompanies premiums over the spot price due to manufacturing and distribution costs.