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we are in Business Since 1948
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we are in Business Since 1948
Phone Icon
1800 618 805
Clock Icon
Mon - Fri: 9:30am - 5:30pm
Saturday - Sunday Closed
Location Icon
Level 14, Off 1411
227 Collins Street
Melbourne, VIC 3000


WHICH IS BEST, PHYSICAL GOLD OR PAPER GOLD?

If you are looking to make an investment in gold, then you will need to do some research to find the best platform on which to do this. There are three main ways in which you can make an investment in gold, and each one has both its good points, as well as bad ones.

Physical Gold

ETF’s – Exchange-Traded Funds

Mining Shares

Which is Best, Physical Gold or Paper Gold

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Investing in Physical Gold

Physical gold is seen by many as the best way to invest in this precious metal. When you own physical gold, it will always have an inherent value and is also a very liquid asset which is also a form of currency. If your privacy is important to you, this form of investment is very private with minimal reporting requirements. You will need to make sure that you purchase your gold from a reputable dealer in order to make sure that you purchase good quality gold. Another consideration to take into account is that you will also need to store your gold securely to protect your investment. You can do this by placing it in a safety deposit box in a bank, or if you have a safe at home. If neither of these options is available, you may not want to keep physical gold at your home as your insurance policy may not cover you for gold above a certain value.

Exchange-Traded Funds

ETF’s are a very easy way that people can invest, as well as trade in gold. It is very easy to buy and sell ETF’s quickly, and they can be part of a larger account for means of diversification. If you are looking for a short term investment, then ETF’s may be a good option for you. Unlike physical gold, there are higher transactions fees which you will need to take into account. You will also find that there is no protection regards the volatility of the market, as well as also being little accountability as they do not audit the custodianship of gold holdings. There are also high reporting requirements, so there is little privacy.

Mining Shares

As with ETF’s you can buy and sell mining shares very easily, and there are potentially high rewards for any investment. There are very high reporting requirements and ultimately you hold paper stock, which has no inherent value. The value of the shares is also susceptible to exploration risks, as well as meteorological and geological challenges.

Out of the three options that are above, the safest long-term investment would most likely be physical gold. Mining Shares and ETF’s can be a good option if you cannot hold physical gold, and you can also get a good return on your investment. But as with most investments, the greater potential return, the greater the risk is.