Gold Bullion vs. Paper Gold

The two types of precious metals are gold bullion and paper gold. Paper gold is essentially a certificate, which is essentially a claim on a specified amount of physical gold stored in a vault. The claim is issued by a private company that trades on a stock exchange. One of the downsides of paper gold is that the value is tied to the price of gold. If the price of gold drops, the value of your paper gold will drop as well.

Both paper gold and gold bullion can be a good choice for investors looking for a safe and secure way to invest in gold.

Paper gold is a form of physical gold which is stored as a tangible asset. It is similar to taking out insurance on your house, only in this case, you are insuring the value of your physical gold. Paper gold has a value equal to the current spot price of gold. If the price of gold increases, the price of your gold will increase as well. If the price of gold decreases, so will the value of your gold.

But there are differences between the two that can affect your decision.

The biggest difference between gold bullion and paper gold is that the former is tangible. You can touch and feel the value of gold bullion in your hands and in your bank safe. When you buy paper gold, you’re purchasing shares in a company, similar to the shares of a stock. If the company goes under, so does your investment.

When you buy gold, you own the actual metal.

There are two types of gold investment products: physical gold and paper gold. Both have pros and cons, and it’s important to consider the differences. First, there’s gold bullion, which is physical gold that’s stored in the form of bars or coins. When you buy gold bullion, you own the actual metal that’s stored in your vault. This means that if you want to sell your gold, you can easily do it whenever you want, and you don’t have to worry about giving up a certain percentage in fees or taxes.

Physical gold is much more valuable than paper gold.

Paper money isn't backed by gold anymore. In fact, it's paper backed by the faith of the government. But the value of physical gold is backed by the value of the metal it contains. While paper money loses value over time, gold does not. If you want to preserve the value of your savings, invest in physical gold.

Since you own the metal, you can also sell it or use it as collateral — this can give you more options for your investment.

Even though physical gold is an investment, there are downsides. In order to keep your investment secure, you will have to store it in a safe (such as a bank vault), and you will be responsible for any loss. If you want to have access to your gold quickly, you will have to pay a storage fee.

With paper gold, you are limited to the amount you purchase.

The main differences between gold bullion and paper gold is that paper gold is an investment and bullion is an actual gold asset that is stored in its physical form. Investment gold is mainly used for hedging and diversification, while bullion is mainly used for making payments.

If you want to trade physical gold, you typically need to go through a broker.

You can either trade physical gold or paper gold. Paper gold consists of gold held in accounts, such as gold mutual funds. Sometimes it’s called “tracker” gold, as it follows the value of the price of gold. But paper gold has its downsides. You have to pay management fees each year, and there’s no guarantee that you’ll get your money back when you sell.

Conclusion

As the price of gold continues to rise, more and more investors are looking to invest in the precious metal. While physical gold is a tangible asset, paper gold is a similar asset but has a different method of ownership and can be stored in a safe location. Paper gold is essentially a loan to the gold market. This means that if you buy paper gold, you are loaning money to the gold market to purchase physical gold. If you want to sell your paper gold, you can do so by returning the loan to the bank or broker that you originally purchased it from.