Why physical precious metals

There are various ways to invest in precious metals. On this site we only offer comparison of physical precious metals, the coins and bars that are shipped to you. I'll try to explain what the alternatives are for investing in gold and silver and why you should be buying physical instead of paper or custodial precious metals.

Precious metal futures

Futures are contracts traded on exchanges stating a buyer will buy a specified amount of precious metals at a predefined price and date from the seller. The COMEX market is the leader in this. By buying a futures contract you buy the right to buy gold, silver, platinum or paladium somewhere in the future. In reality this is often used for trading without actually taking delivery. It is possible to take delivery of the actual metals you purchased but there's a lower limit to this, don't expect to get your gold coins from Comex, they only deliver gold above 100 ounces at a time in bar form or silver above 5000 troy ounces in 1000oz bar form. Futures also allow margin trading multiplying the profit and loss of your investment which can be quite risky. Futures are not a great way to save and the gold is not in your physical reach until the contract is filled and delivered. This is mainly a good option for big speculators or big buyers of gold and silver that can't get their product directly from the miners/suppliers.

ETF's

ETF's, or Exchange traded funds are similar to stocks, you buy into a fund which manages precious metal related stocks and futures. It's way more approachable as the precious metal futures even for smaller investors and it has a bit more diversification. The thing with ETF's is that you don't actually own any precious metals with it, you just hold 'shares' of the fund. There are risks involved like with any stock and there's no way to get anything physical out of it. If you want to speculate on the gold or silver market without spending a lot of money on it in 1 go ETF's are probably what you need.

Physical silver in custody

If you want to buy real precious metals, not just the paper ones as mentioned above, but you are not looking to keep them in your home there are services out there that allow you to buy precious metals and have them stored at their vaults. This often has some tax benefits (like no VAT on Silver bars if they are stored in a Swiss depot) but the gold or silver you bought is actually not within your reach; You often can't take delivery of it even though it's yours. The gold and silver might be stored in a more safe location but if you need it you can only have it sold. You also have to pay fees over each period of time you store your precious metals in someone elses vault which could add up. Your added security of not holding the actual precious metal yourself is also a liability, you are dependent on the party you work with. It's not a situation I'd want to be in

Physical precious metals

The last option you have is actually buying precious metals in the form of physical coins, bars, buckshot, nuggets, etc. You will actually receive these products and it's up to you what you do with it and how you make sure it's kept safe. It's a liability but you have full control over your holdings with no other parties to deal with. Your house won't be as safe as a vault in a bank but there are no hidden fees and also no chance it will be held by the third party or government in times of crisis. I think this form of investing in precious metals is the only real form of having full control over your investment. Therefore this is the only form of precious metal buying offered on this site. It's important you buy from renowned dealers and do some basic tests to make sure you are getting the real deal; There are a lot of good fakes to be found. Only known dealers with a reputation of delivering real precious metals are entered on this site.

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