Journal

Pure Gold

Investment-grade gold. Ingots, bullion, allocation strategies, and the case for physical metal in a portfolio.

The number that decides whether investment gold was bought well is almost never the gold price. It is the premium — the gap between the spot price of the metal and what you actually paid, and again between spot and what a dealer will pay you back. Small bars and coins generally carry a proportionally larger premium than big ones, because minting, assaying, packaging and handling cost roughly the same per unit whatever it weighs. That is the trade being made when you buy in small denominations: you are paying for divisibility, which is a real benefit if you may want to sell part of a holding, and a real cost if you never will. The second question is what you are holding at all. Metal in your own possession, metal allocated to you in a vault, and a contractual claim on metal are three different things with three different failure modes, and the difference only becomes visible at the moment you most want it not to matter.