Why Do Investors Prefer Physical Gold and Silver Bullion?
Learn why it’s better to buy tangible gold and silver bullion vs. mining stocks, ETFs, and other paper investments
Coin collectors commonly buy gold and silver bullion for numismatic purposes. Bullion coins such as the American Gold Eagle and Silver Eagle have artistic designs, making them great collector’s items as well as an excellent investment.
Such bullion coins can be easily purchased online at Provident Metals or other trusted precious metal dealers, and come in many different sizes and designs. Most of the designs represent something significant from our history, making it a more valuable investment.
However, buying physical bullion isn’t just for hobbyists and collectors. Savvy investors are also keen on physical metal. Why?
For starters, investors can easily monitor the spot price of gold or silver to decide when to sell if going with a short-term strategy. For long-term investors, the consistently rising prices of these precious metals helps provide financial stability and security in their portfolio.
There are many other benefits that come from investing in gold and silver bullion. Here are a few that stand out above all.
Physical Bullion Over ETFs
Investing in Exchange Traded Funds (ETFs) is technically just purchasing shares of a commodity through an internet platform. It has no real gold or silver basis—only ones and zeros with no substantial physical existence.
This means that your investment asset is tied up across a platform on the internet with no way of seeing or touching it firsthand. If there were a shortage and you wanted to withdraw your asset, there’s no guarantee that you would be able to access it.
This is one reason why investors typically trust physical gold or silver bullion over ETFs.
Physical Metal Guards Against Market Crashes
Another reason savvy investors prefer to put their money into physical gold or silver bullion is because of protection. For instance, a market crash could wipe out their investment portfolio or lower it significantly. If you only have investments in things such as bonds, stocks, and mutual funds, you will be taking a pretty big gamble on your assets and future security.
However, if you choose a more long-term investment in gold and silver bullion, there is less to fear if a global financial crisis should occur. In fact, the value of gold and silver typically goes up during a global market meltdown, which is why purchasing diverse metals such as physical gold or silver is a smart investment.
There is also considerable demand for precious metal bullion right now in India and China. These countries continue to expand their population and economies. As national wealth rises in these countries, the price of bullion is also predicted to increase.
In short, disregarding the stock market, bonds, or mutual funds and instead investing in something substantial like gold and silver bullion is a better way to protect your portfolio from unforeseen events.
Simplicity of the Physical Gold and Silver Investment
Investing in gold or silver bullion is amazingly straightforward, even for those who have never invested before. It is easy to find a trustworthy online dealer who sells high quality gold and silver bullion to individual investors.
Once you’ve ordered your physical bullion, it’s relatively easy to put your bullion collection in a bank’s safe deposit box or secure safe within your home. Many investors prefer to keep their bullion investments close by for easy access and trading.
Physical Bullion Can Provide an Inflation Hedge
One of the most significant worries investors have is how inflation will affect their assets. The bank can’t protect the value of the dollar from declining due to inflation.
For instance, in 1990, a home cost around $150,000, but in 2010 the average home cost rose to $220,000.
Now, let’s take this same scenario and apply it to gold bullion instead of the United States dollar.
In 1990, the gold price was in the range of $383 per troy ounce. So, it would have taken approximately 392 ounces of gold to buy a house. Twenty years later, in 2010, the price of gold hovered around $1,118 per troy ounce.
Taking into account that the average price of a home in 2010 was around $220,000, purchasing property would cost 197 ounces of gold—195 less ounces of gold needed to buy a home in 1990.
In this way, gold bullion and other precious metals serve as a hedge against inflation.
Today, the price of gold per troy ounce has increased even more. Looking at this, it’s easy to see that bullion prices are more than capable of countering inflation rates.
Other Benefits of Buying Physical Gold Bullion
Investing in gold bullion is a great way to secure your future. As bars, there is no need to worry about them breaking, decaying, getting tarnished, or becoming corroded in any way due to their high durability.
Another benefit is that gold isn’t affected by most acids, water, or air.
Lastly, purchasing bullion in the form of bars and coins is easy for today’s investors. Not only can you get gold bullion in different weights and sizes, but the products will firmly hold their shape and worth over time.
Other Benefits of Buying Physical Silver Bullion
Investing in silver bullion is another excellent way to secure your pending future. Silver bullion sales have hit record levels in recent years. Silver is also widely used for a number of industries and products, placing bullion in high demand.
As you can see, there are many reasons why savvy investors would want to invest in gold bullion or silver bullion for their future assets. Clearly, it’s nearly impossible to find any other investment that can provide you with this much protection over the economy if it happens to decline.
To obtain these tangible assets, browse Provident Metals today.