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They say that possession is nine-tenths of the law, and this is certainly true when deciding the benefits of physical gold vs. paper gold. Buying physical gold means purchasing rare coins or bullion, and then taking delivery of the actual commodity. Paper gold on the other hand, is purchasing mining stock, gold derivatives or futures, which means investing in the price movement, and not in the actual metal itself. An investor’s objectives is usually the deciding factor between physical gold vs. paper gold.

Two of the deciding factors in the physical gold vs. paper gold debate are logistics and perspective. Physical gold requires that the investor hold his purchase. For people concerned about the state of the economy, this is highly desirable; for investors with large quantities, this can sometimes be a burden.

Perspective in the physical gold vs. paper gold discussion revolves around the objective. Holders of paper gold are only interested in the movement of the price and how to use that price to their advantage. This method has high rewards and risks, depending on the outcome, but generally no burden of gold ownership.

For most investors, it is preferable to own physical gold vs. paper gold. This is because many people use the metal as a hedge against economic crisis. Investors that own large quantities can either invest in bars or large coins, or store gold with a gold exchange at its depository. Either way, investors should work closely with an exchange such as gold-investment.info to determine what they should choose when deciding between physical gold vs. paper gold. 

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Stewart Lawson

Senior Staff Writer - Gold-Investment.info