What Physical Precious Metals Offer
Physical gold and silver are tangible assets with a long history as stores of value. Unlike stocks or bonds, they are not claims on another party—when you own the metal, you hold the asset itself.
This doesn't mean precious metals are risk-free or guaranteed to increase in value. They can decline for extended periods and don't generate income. Understanding both the potential benefits and limitations is essential.
Gold vs. Silver at a Glance
Gold
- Stability: Generally less volatile than silver
- Density: Stores more value in less space
- Demand: Primarily monetary and jewelry
- Consideration: Long-term wealth preservation
Silver
- Affordability: Lower price per ounce
- Volatility: Larger percentage swings
- Demand: Industrial + monetary dual use
- Consideration: Higher risk/reward profile
Physical vs. Paper Products
ETFs and Paper Products
Exchange Traded Funds (ETFs) like GLD or SLV provide price exposure to metals without physical ownership. They trade like stocks and are convenient.
Trade-off
You own shares in a trust, not physical metal. There's counterparty risk involved with the fund structure.
Physical Ownership
Physical coins and bars eliminate counterparty risk—you own the metal directly. No fund manager, no trust structure, no third-party claims.
Trade-off
Storage and insurance costs, less liquid than ETFs, premiums above spot price.
Important Limitations
Precious metals are not a complete investment strategy. They have real drawbacks that should factor into your decision.
No Income Generation
Gold and silver don't pay dividends or interest. You rely entirely on price appreciation.
Extended Decline Periods
Gold peaked in 1980 and didn't reach that level again until 2008—28 years of underperformance.
Storage Costs
Professional storage, insurance, and security add ongoing costs that reduce returns.
Premiums and Spreads
You pay above spot to buy and receive below spot when selling. Prices must rise to break even.
Storage Options
How you store your metals depends on the amount and your priorities.
- 01Home StorageDirect access, but requires security measures. Consider insurance implications. Suitable for smaller amounts.
- 02Professional DepositoryInsured, audited, segregated storage. Required for IRA holdings. Annual fees apply.
- 03Bank Safe Deposit BoxMore secure than home, but typically not insured for contents. Limited access hours.
Questions About Precious Metals?
We're here to answer questions and provide information—not to pressure you into a decision. Take your time.