Why You Should Not Buy Physical Gold And Silver

11 months ago
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There are several reasons that investors find gold and silver attractive investments. And there are several ways by which they can accomplish their objective of investing in the precious metals.

One disadvantage of buying physical precious metals is that they do not produce any cash flow. In order to make a profit from owning gold or silver, the spot price of the metal must rise. In contrast, a business, such as a gold mining company, can generate a profit by increasing its sales and earnings. An investor in a gold mining company would see his holdings increase in value when the price of gold increases, and would also benefit from increased revenues and earnings in the company.

Another drawback of holding physical gold or silver is the need to safeguard the precious metals. The owner of physical precious metals will need to insure the gold or silver and pay for safe storage in a bank vault or safety deposit box.

Another risk of holding precious metals is that if you need to sell, it might be difficult to receive the full market value for your holdings, especially if they’re coins and you need the money quickly. So, you might have to settle for selling your holdings for less than they might otherwise command in the market.

If someone wants to invest in precious metals but avoid the challenges and expense of owning physical gold, there are several options available. There is no reason to hold the physical asset when you can simply have the value of that in a secure and insured trading account.

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