Paper gold is just a promise to give you gold. Promises can be broken.
For me even if it will be harder to hold physical gold, I would still prefer it since it is safer to just lock it or get it on a safety deposit box on a bank rater than trust someone who promises to give gold because of some paper gold that I got. Like what the quote above says even if you lose only a little in trading paper gold because the spread is low, there's a chance that the promise will be broke by the one who promised you. 
Topic: Physical or Paper Gold? Why? - page 4. (Read 2351 times)
Paper gold is just a promise to give you gold. Promises can be broken.
Paper gold is just like a banknote. You do not have the gold in your possession but the note/paper entitles you to a fixed amount of it.
When you buy paper gold it is like buying a bond. The paper isn't worth anything but the gold it is attached to is. If you would want to cash out it would be more difficult. If something were to happen to the issuing authority then your paper gold would be worthless.
If you had the physical gold in your possession then you actually have something that is worth its weight in gold according to market prices.
When you buy paper gold it is like buying a bond. The paper isn't worth anything but the gold it is attached to is. If you would want to cash out it would be more difficult. If something were to happen to the issuing authority then your paper gold would be worthless.
If you had the physical gold in your possession then you actually have something that is worth its weight in gold according to market prices.
Good question. If you own gold on paper you don't actually own the gold. You own the rights to someone else's gold (usually an investment company). If that company goes out of business for any reason you could lose your money. If you own physical gold you have complete control over it. You're not at the mercy of the success of the business.
In some countries there are protections for investors if the company goes bankrupt.
Owning physical gold gives you all the control but you also have to find a place to store it, keep it secure, etc.
The same concept applies with Bitcoin.
In some countries there are protections for investors if the company goes bankrupt.
Owning physical gold gives you all the control but you also have to find a place to store it, keep it secure, etc.
The same concept applies with Bitcoin.
I am totally agree. it is not about how safe the gold when you have it in your house or in a paper, but how you control it. I prefer physical gold than paper one because I can see it, but what about paper gold? does the gold really exist?
Good question. If you own gold on paper you don't actually own the gold. You own the rights to someone else's gold (usually an investment company). If that company goes out of business for any reason you could lose your money. If you own physical gold you have complete control over it. You're not at the mercy of the success of the business.
In some countries there are protections for investors if the company goes bankrupt.
Owning physical gold gives you all the control but you also have to find a place to store it, keep it secure, etc.
The same concept applies with Bitcoin.
In some countries there are protections for investors if the company goes bankrupt.
Owning physical gold gives you all the control but you also have to find a place to store it, keep it secure, etc.
The same concept applies with Bitcoin.
Some people says physical gold is more important, I should have physical instead of paper gold. But I dont understand why.
I trade easily in paper gold, spread is low so I lose less while trading. Banking system is powerful in my country, Turkey.
Physical gold can be stolen easily, I dont prefer having gold in my home, it is so dangerous imo, thieves are everywhere in my hood
What do you think?
edit: Guys I have read all your comments but still not satisfied. You all say that paper gold is not gold itself, just a promise; so having physical gold is more trusting even there is a possibility of theft.
Maybe I understand something different when saying paper gold.
Gold account at banks such as HSBC, BNP Paribas or ICBC is really less safer than keeping the gold at home?? And even if these accounts are guaranteed by the government up to $30k in each account?
I trade easily in paper gold, spread is low so I lose less while trading. Banking system is powerful in my country, Turkey.
Physical gold can be stolen easily, I dont prefer having gold in my home, it is so dangerous imo, thieves are everywhere in my hood
What do you think?
edit: Guys I have read all your comments but still not satisfied. You all say that paper gold is not gold itself, just a promise; so having physical gold is more trusting even there is a possibility of theft.
Maybe I understand something different when saying paper gold.
Gold account at banks such as HSBC, BNP Paribas or ICBC is really less safer than keeping the gold at home?? And even if these accounts are guaranteed by the government up to $30k in each account?
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