Why Physical Bullion?
As the market of any product is open, many will have the chance to buy the wrong product or commodity. Many have argued that having an account in gold and other precious metals in paper/certificate will be blown up with the physical bullion market. Hence, buy the real thing and get out of any investments that give your paper instead. To have a sound investment in physical gold, listed below are few of the things you need to know.
Banks and brokerage houses are the major holders of the precious metals and thus contribute in the precious metal exchange traded funds (ETF).
What are the risks?
Risks in gold investment lie on those that deal with paper substitute. However, if you invest in physical bullion the counterparty risk is decreased.
The holdings of the physical bullion is determined by the skills of the manager, it doesn’t reflect on the gold itself after market timing, averaging and hedging are introduced.
Liquidity of Gold
Bullion can be traded any hour of the day; it has a high level of trading activity. It can be easily bought and sold. Thus, bullion held in papers or certificates must be avoided.
To be sure that you will own what you bought, ensure that title is transferred under your name before securing its storage vault. Any bullion must be stored in allocated basis for it not to be used in any way possible. Ownership of gold certificates alone is not redeemable in physical gold, so, invest in the real thing.