In our new regular column, online investment platform Bunker Gold&Silver looks at money matters relating to precious metals.
While many people only think of bars or coins when it comes to gold as an investment, the picture is more complex. Here are some categories of gold you can purchase.
Intangible gold (also known as “paper gold”)
#1 Gold on financial markets:
You can buy several types of products related to gold on financial markets. The most common are the currency (XAUUSD) available on the Forex, futures on the stock exchange like the COMEX, or ETFs (exchange-traded funds) from bank/asset managers, which are trackers replicating gold performance.
#2 Gold from financial institutions such as banks or brokers:
Financial institutions like banks can sell you gold as certificates. This is usually unallocated gold, meaning that the institution can sell more certificates than the number of bars it really owns. If all its clients then want to take their bars, they may be unable to get them – and the cost can be high to convert certificates into physical gold.
#1 Non-investment gold:
Gold comes in a wide range of types, from doré bars to jewels or nuggets. These are all physical but are not recognised as an investment on the financial regulatory framework.
#2 Investment gold:
Investment gold products are those that respect strict standards (purity and form) and are recognised internationally as investment gold. Today, only bars and coins satisfy these criteria – at the same time, not all bars and coins are investment gold!
So, if you’re looking for an investment that you actually own, only physical gold bars or coins are relevant. The next step is to determine the best place to buy and store your investment.
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