May 22, 2024, 7:30 PM

Investing in Physical Gold vs Gold Stocks: Which is Better [2024]

4 differences between physical gold vs gold stocks. 1. Definition 2. Storage 3. Buying process 4. Liquidity.

Hopefully, you're here because you are planning to invest in gold, as it is a stable and profitable choice. This store of wealth can help diversify the investment portfolio and even act as a protection against inflation. Often, people believe that investing in gold means buying gold bars, coins, or bullion — though that's not the case.
 

Gold stocks are another popular choice that allows you to make investments at a lower initial price than physical gold. They aren't just a gold investment — instead, it is an investment in any leading gold-related company. Here, we'll break down the differences between physical gold vs gold stocks — and which one will work best for you.


What is Physical Gold?

physical gold for investment

Image Ref: https://unsplash.com/photos/gold-and-silver-round-coins-y7jRMXOz7pE

Gold has been a valuable investment option for years. People are often seen investing in the form of gold jewelry, bars, coins, etc. One of the biggest advantages of physical gold is that you keep possession of the assets, and there's no third-party risk involved. Moreover, the owner can sell the physical gold whenever and wherever they need it. But there's a downside — you need to store them securely, and they need to be bought at a premium.

 

Pros

Cons

  • The value of physical gold remains unaffected even during currency devaluation or inflation. 
  • You need to pay additional storage and even insurance costs.
  • Those who are investing in physical gold need a proper storage location.
  • It can be damaged, lost, and stolen. 
  • When the price of gold increases, the worth of physical gold also rises.
 

What is Gold Stocks?

If you are looking for the easiest and most common investment method, physical gold would be a good option. But if you want to choose the best way to invest in gold that pays higher returns and profits, we'd recommend investing in a gold mining project. While it would have taken a lot of hours to choose the most profitable gold mining and exploration company, this could be a game-changer in the long run. There are many people who have seen their investment in mining projects pay off with Fields of Gold. If you wish to learn more about how to invest in gold mining, talk with the Fields of Gold team today.

 

Pros

Cons

  • Gold stocks can be bought or sold via a brokerage account. 
  • You need to research and choose the leading gold mining and exploration company.
  • Some of the profitable gold stocks pay dividends, so you get passive income.
  • Like any other stock, gold stocks are subjected to general market risks.
  • It has the potential to generate high returns compared to physical gold, especially when there is high demand for gold.
 

physical gold vs gold stocks

 

Image Ref: https://unsplash.com/photos/brown-and-white-stone-fragment-gO5cpnl8Ls8 Alt Text: physical gold vs gold stocks

 

 

 

Differences Between Physical Gold vs Gold Stocks

Physical gold and gold stocks are similar in quite a few ways — they both involve investing in stable gold and offer high returns. The main differences are a little subtler.

 

 

 

Parameters

Physical Gold (Coins, Bars, or Jewelry)

Gold Stocks (Mining Stocks, ETFs, or Funds)

Definition

  • Physical gold can be in any form (bars or coins), ranging from small size to large ones. It is very important to make sure the gold purchased is pure, has the correct weight, and is genuine.

  • Gold stocks, on the other hand, are the shares in companies like mining, production, and exploration. If you want to invest in gold stocks, you'll need to open a brokerage account.

Storage Options

  • You'll typically need third-party storage options to safely keep the purchased gold.

You don't have to pay any money for storing the gold stocks.

Investment Process

  • Physical gold, like bars, coins, or jewelry, can be purchased from a dealer either offline or online. We'd recommend you check the gold price, weight, and purity to avoid potential scams.

There are many gold mining and exploration companies where you can get the most profitable shares or stocks. Fields of Gold is a leading gold mining company — where you'll find projects that meet your requirements.

Liquidity

You can easily buy or sell physical gold in the form of coins or jewelry.

Gold stocks like ETFs, mining stocks, or shares are traded on the stock exchanges or gold market.

 

 

 

 

Physical Gold or Gold Stocks: Which Should You Use?

From this physical gold vs gold stocks guide, we can see the appeal of both these options. It isn't easy to declare a winner in this face-off as the choice depends on your investment needs and budget. Generally speaking, physical gold might be best for beginners who have cash on hand for investment. Gold stocks (typically in mining) work for anyone, but they are preferable if you need a simple and profitable solution. If you need more information about how investment in a gold mining project works, Fields of Gold can help you.

Fields of Gold is based on Vancouver Island and is a global leader in the gold mining and exploration business that assists everyone in evaluating, acquiring, and exploring gold properties in Canada.

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