{"id":29633,"date":"2023-10-23T17:00:07","date_gmt":"2023-10-24T00:00:07","guid":{"rendered":"https:\/\/www.advantagegold.com\/?p=29633"},"modified":"2023-10-23T17:00:07","modified_gmt":"2023-10-24T00:00:07","slug":"physical-gold-vs-paper-gold","status":"publish","type":"post","link":"https:\/\/www.advantagegold.com\/blog\/physical-gold-vs-paper-gold\/","title":{"rendered":"Physical Gold vs. Paper Gold"},"content":{"rendered":"<h3><span style=\"font-weight: 400;\">Understanding the Differences Between Physical Gold and Paper Gold\u00a0<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Gold ownership boils down to a battle of paper gold vs. physical gold.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Both have their advantages. Both have their flaws.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">What they have in common is gold\u2014one of the oldest currencies and stores of value the world has ever seen.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This guide will help you decide what kind of gold you should own.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">We will walk you through your options, explain how they work, and teach you how to acquire whichever form of gold you choose.\u00a0<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">What Is Physical Gold?\u00a0<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Physical gold is tangible gold bars and gold coins that you own.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">It is a physical asset\u2014not a representation of it\u2014that you hold in your hands.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">You invest in physical gold in two ways:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Gold IRA<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Direct delivery\u00a0<\/span><\/li>\n<\/ul>\n<h3><span style=\"font-weight: 400;\">Gold IRA<\/span><\/h3>\n<p><span style=\"font-weight: 400;\"><strong><a href=\"https:\/\/www.advantagegold.com\/2023\/06\/01\/what-is-a-gold-ira\/\">The Gold IRA<\/a><\/strong> is an individual retirement account. The account is self-directed\u2014meaning you choose what you want to invest in and how much. Physical gold\u2014bullion bars and coins\u2014is allowed as an investment within an IRA.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Just like a conventional IRA, the self-directed account is available in three forms:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><a href=\"https:\/\/www.schwab.com\/ira\/traditional-ira\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">Traditional Gold IRA<\/span><\/a><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><a href=\"https:\/\/www.schwab.com\/ira\/roth-ira\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">Roth Gold IRA<\/span><\/a><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><a href=\"https:\/\/www.schwab.com\/small-business-retirement-plans\/sep-ira\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">Simplified employee pension (SEP) Gold IRA<\/span><\/a><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\"><strong><a href=\"https:\/\/www.advantagegold.com\/gold-ira-investment\/\">The Gold IRA functions<\/a><\/strong> just like its conventional counterpart, and the same rules apply.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">To help ensure the long-term viability of your retirement account, the IRS enforces strict guidelines on the types of gold allowed. <strong><a href=\"https:\/\/www.advantagegold.com\/approved-precious-metals\/gold-coins\/\">IRA-approved gold<\/a><\/strong> must meet or exceed the following standards:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Bars and coins must meet a purity of 99.5%.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Coins must be minted by governments.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Coins must be new, uncirculated, and in perfect physical condition.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Bars must be manufactured by approved assayers and companies that are traded publicly on exchanges such as the COMEX.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">You must store your <strong><a href=\"https:\/\/www.advantagegold.com\/approved-precious-metals\/\">IRA metals<\/a><\/strong> in a neutral, guarded, and insured location, referred to as a depository.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Depositories are vaults vetted by the IRS and approved to hold custody of IRA assets.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Vaults must meet standards for security, reporting, insurance, and space.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Your gold sits safely and fully insured in the vault until you liquidate it or have it sent to you.\u00a0<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Direct Delivery<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Direct delivery is a cash purchase of physical gold.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Direct delivery is a simple process.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">You decide what you want to buy, remit payment, and the gold ships directly to your door.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">There are no restrictions\u2014outside of budget and availability\u2014to direct-delivery gold.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">After payment clears, your gold typically arrives in a week.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Once you receive your precious metals, it is your responsibility to securely store and insure your gold.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">What you do with your gold, and how you do it, is entirely up to you.\u00a0<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Advantages of Investing in Physical Gold\u00a0<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Many investors turn to physical gold to anchor their portfolio.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The benefits of investing in physical gold include:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Ownership of a tangible asset.<\/b><span style=\"font-weight: 400;\"> Physical gold can\u2019t go bankrupt or become worthless at the push of a button.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Gold acts as a hedge against inflation and economic uncertainty.<\/b><span style=\"font-weight: 400;\"> As the costs of goods and services increase, the price of gold typically rises, too.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Gold helps preserve wealth over the long term.<\/b><span style=\"font-weight: 400;\"> Since the days of ancient civilizations, it has retained its intrinsic value. It is a rare metal\u2014there is a finite amount in existence, and it is in high demand.\u00a0<\/span><\/li>\n<\/ul>\n<h3><span style=\"font-weight: 400;\">Drawbacks of Investing in Physical Gold\u00a0<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Owning physical gold presents some challenges.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Before investing, be prepared to address the following issues:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Gold provides no dividend or income stream.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">You must provide an adequate storage solution.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Acquiring physical gold involves acquisition fees.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Liquidation can take time.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">You can avoid some of these drawbacks by instead opting for the Gold IRA.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Most investors find simple solutions to the other issues.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">But knowing they exist will help you properly prepare and smoothly transition to gold ownership.\u00a0<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">What Is Paper Gold?\u00a0<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Paper gold is a paper-traded asset that reflects the price of gold but is not physical gold.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Usually an exchange-traded fund (ETF), paper gold is traded through exchanges and has no physical counterpart.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The ETF shares don\u2019t convert from paper to physical gold. They only reflect the price of gold.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">There is no way to take possession of your paper gold shares.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Paper gold is more useful for trading purposes\u2014moving in and out of positions\u2014than physical gold. Investors do not typically use it as a long-term buy and hold.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Unlike physical gold\u2014with which ownership means possession of a tangible asset\u2014gold ETF owners are often unsure of what they\u2019re buying.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Most gold ETFs are not fully backed with gold. Some do not require the fund to contain gold at all. Some gold ETFs are investments in mining stocks or other companies tangentially associated with physical gold.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">You must read the ETF\u2019s prospectus meticulously to understand what is truly being traded.<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Advantages of Investing in Paper Gold\u00a0<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">For the short-term investor, paper gold offers:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Quick access to market fluctuations in the price of gold.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Easy online trading methods.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The ability to \u201cown\u201d gold without a large capital outlay.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">No worries about storage, security, and insurance of gold.<\/span><\/li>\n<\/ul>\n<h3><span style=\"font-weight: 400;\">Drawbacks of Investing in Paper Gold\u00a0<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Paper gold exposes you to:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Counterparty risks. With a gold ETF, you enter into a contract with a third party. That company may or may not maintain solvency. There is also a risk that your contract isn\u2019t honored due to market conditions or other factors.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Owning an intangible asset. You do not own real gold when you purchase paper gold shares. There is no conversion to the tangible asset.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Volatility. ETFs expose you to trading fluctuations and market volatility. Price swings and trading volume may not be influenced by gold but by the third parties involved.\u00a0<\/span><\/li>\n<\/ul>\n<h2><span style=\"font-weight: 400;\">Why Choose Physical Gold Over Paper Gold as an Investment Tool?\u00a0<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">There\u2019s an old saying about the Golden Rule: He who owns the gold makes the rules.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The desire to own real, tangible gold is one of many reasons investors prefer physical gold vs. paper gold.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The physical gold that you can hold in your hand today is the same gold that has been a store of wealth and value since the time of ancient civilizations.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Gold is a precious metal\u2014it is rare and has value as a commodity and as a currency.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">They can\u2019t make more gold.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Central banks around the world know this, and many hoard as much gold as they can.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">There is another important factor to consider when comparing paper gold vs. physical gold.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Physical gold helps preserve wealth.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In times of high inflation, gold prices tend to rise in concert with other hard goods.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">As inflation devalues currency, it takes more dollars to purchase things today than it did yesterday. Gold too costs more dollars to purchase during inflationary times, thereby preserving the dollars invested in gold.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Physical gold is universally accepted.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">IRA-eligible bars and coins originate from government mints and approved manufacturers. They are among the finest in the world.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">No matter where you are on planet Earth, chances are you can liquidate or trade with your physical gold.\u00a0<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">Tips and Considerations Before Investing in Gold\u00a0<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Do your homework.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Take the time to research companies, methods, and ramifications of ownership before investing in gold.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">As with any investment, it is best to have a well-thought plan, and stick to it. If buying direct-delivery gold, have your storage and insurance in place before receiving your investment.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">If investing through an IRA, research which depository is close to you, as you may want to make an appointment and visit your metals someday.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Before liquidating, consult your certified public accountant (CPA) or tax advisor.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Have a complete understanding of capital gains and other potential tax liabilities that may come from liquidating your metals.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">A reputable precious metals firm\u2014such as Advantage Gold\u2014can help you invest in IRA gold and direct-delivery gold.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">After nearly a decade of educating and assisting clients, Advantage Gold is the highest-rated precious metals firm.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">We encourage you to <a href=\"https:\/\/www.advantagegold.com\/reviews\/\"><strong>read some of the thousands of<\/strong> five-star reviews from our clients<\/a>.\u00a0<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">Exploring Other Precious Metal Investments\u00a0<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">When comparing paper gold vs physical gold, keep in mind that there are other <strong><a href=\"https:\/\/www.advantagegold.com\/blog\/what-are-the-approved-precious-metals\/\">investment-grade precious metals<\/a><\/strong> worthy of attention.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">All these precious metals are available as coinage\u2014just like gold.\u00a0<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Silver<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Silver<\/span> <span style=\"font-weight: 400;\">is in high demand.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Possibly the most useful precious metal, silver has become a staple for helping products function in the modern world.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In our tech-driven age, silver\u2019s high electrical and thermal conductivity put it front and center in the manufacturing world. Almost every piece of electronics you touch relies on silver to function.<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Platinum<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Platinum, one of the rarest elements, is known for its shine and luster. Many pair it with the rarest gemstones to make beautiful jewelry.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The auto industry relies on platinum for catalytic converters that help clear toxins from vehicle emissions.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The dental profession uses platinum for fillings and other dental prosthetics.<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Palladium<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Palladium<\/span> <span style=\"font-weight: 400;\">is the most expensive of the main precious metals.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Like its cousin platinum, palladium is instrumental in converting atmospheric pollutants into less harmful vapors and carbon dioxide.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">It is also used in dentistry and fuel cells.\u00a0\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Physical precious metals tend to be the best option for long-term investors.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Give yourself the peace of mind that comes with tangible precious metals ownership.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Call us today at Advantage Gold, or <strong><a href=\"https:\/\/www.advantagegold.com\/contact\/\">click the link<\/a><\/strong> and let us know how to contact you.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">We will walk you through all your options and help you make the best decision for your circumstance.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Most of all, we\u2019re happy to help.\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Understanding the Differences Between Physical Gold and Paper Gold\u00a0 Gold ownership boils down to a battle of paper gold vs. physical gold.\u00a0 Both have their advantages. Both have their flaws.\u00a0 What they have in common is gold\u2014one of the oldest currencies and stores of value the world has ever seen.\u00a0 This guide will help you [&hellip;]<\/p>\n","protected":false},"author":18,"featured_media":30237,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[47],"tags":[1333],"class_list":["post-29633","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-gold-archive","tag-physical-gold-vs-paper-gold"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.advantagegold.com\/wp-json\/wp\/v2\/posts\/29633"}],"collection":[{"href":"https:\/\/www.advantagegold.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.advantagegold.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.advantagegold.com\/wp-json\/wp\/v2\/users\/18"}],"replies":[{"embeddable":true,"href":"https:\/\/www.advantagegold.com\/wp-json\/wp\/v2\/comments?post=29633"}],"version-history":[{"count":0,"href":"https:\/\/www.advantagegold.com\/wp-json\/wp\/v2\/posts\/29633\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.advantagegold.com\/wp-json\/wp\/v2\/media\/30237"}],"wp:attachment":[{"href":"https:\/\/www.advantagegold.com\/wp-json\/wp\/v2\/media?parent=29633"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.advantagegold.com\/wp-json\/wp\/v2\/categories?post=29633"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.advantagegold.com\/wp-json\/wp\/v2\/tags?post=29633"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}