How to Own Physical Gold Without Holding Gold

With the price of gold holding steady over $1,700 per ounce of late, there’s more and more reasons to own gold in place of Treasuries or bonds; gold is not subject to the wild swings in risk, and nobody but nobody can print more of it. And rampant overproduction of currency – including cryptocurrencies – is probably the single biggest reason to own gold.

The problem is getting your hands on it.

Oh sure – anyone can stash a few one ounce gold bars or Krugerrands in the back of their closet. But how does one actually accumulate larger stores of value denominated in gold, without actually having to build a vault the size of Fort Knox to hold it all?

Well, fortunately, there are almost as many ways to own gold as there ways to invest in stocks. And they’re mostly quite simple. But some carry a lot more risk than others. And as we have all learned over the last decade, the banks and the government do their best to shield average everyday investors like you and me from the real risks of bank-sponsored products that claim to be denominated in gold.

Take, for example, the SPDR Gold Trust (NYSEARCA:GLD), which is the largest Exchange Traded Fund, or ETF.

[stock_chart symbol=”GLD:US” align=”left”]

An ETF takes the money investors put in, and go buy whatever the underlying asset is supposed to be. In this case, gold bullion.

Theoretically, one unit in the ETF is worth a corresponding amount of gold. When the fund started, each 1,000 units of the ETF were equivalent to one ounce of gold.

But you cannot claim the equivalent amount of ounces of gold when you try to redeem your SPDR Gold Shares, unless you own 100,000 units of the trust at a minimum. And even then, the ETF reserves the right to reimburse the unit holder with cash instead of gold, at its sole discretion.

So while holding an ETF in gold can provide exposure to the price movements in gold for investors, it does not eliminate the risk of a currency crisis rendering possession of gold for portable wealth desirable.

In other words, the very event that gold is most prized as a hedge against will not be available to holders of the SPDR Gold Shares. But if your only interest is in betting on the upward direction in the price of gold, then okay. Go for it.

A better bet to both capture the upward price of gold, and have a right to take possession of the gold underlying your investment, is in One Gold, a relatively new product from the Sprott family of precious metals products.

For those who don’t know, Sprott Inc. was founded by legendary gold bug and fund manager Eric Sprott, who is now retired (but sign up here to watch our webinar with Eric Sprott, Sean Roosen (Osisko Mining) and Marin Katusa (Venture Society) on May 7th).

I sat down with Sprott Inc (TSE:SII) (OTCMKTS:SPOXF) (FRA:A78) CEO Peter Grosskopf a while ago to talk about One Gold. Click below to watch that interview.

Sprott Inc (TSE:SII) Launches OneGold, the Secure Digital Gold Trading Platform

So what is One Gold?

One Gold is essentially digitized gold using blockchain technology. You have the ability to buy gold in your account that you can actually take delivery of. You can ship your gold to anywhere  simply by making a redemption request.

So while you don’t necessarily have possession of the physical gold, this is about as close as it gets. Of utmost importance is who is the custodian of your gold, and in this case, its Apmex, a billion dollar retail dealer in physical precious metals based in Oklahoma City. So when you buy One Gold, your gold is in the continental United States.

Relative to ETF’s, One Gold’s digital gold system is a lot safer, and a lot more reliable, in my opinion, than SPDR gold shares.

If you want to put yourself in a position where you can relax and stop anxiously worrying about your future, you need to build your exposure to gold – I don’t care how you do it, but here are the reasons why you MUST:

  • We are quickly approaching a time of “hyperinflation”. Money is being printed so fast, purchasing power is evaporating.
  • Coronavirus is causing unprecedented volatility and uncertainty in markets.
  • Interest rates have been cut.
  • And maybe worst-of-all: the ongoing sovereign debt crisis. As of March 31, 2020, the US national debt reached $23.31 trillion which is MORE than the country’s nominal GDP.

For all these reasons and catalysts, guess what the largest offshore capital pools are buying?

That’s right. Gold.

In order to take advantage of the coming gold rush, I am hosting a FREE webinar with the world’s leading gold experts:

  • Eric Sprott: Legendary Billionaire Gold Bull Investor
  • Sean Roosen: CEO of Osisko Gold Royalties
  • Marin Katusa: Has arranged over $1 billion in financings

Click here to reserve your seat for this exclusive May 7th event that help you unlock the extreme potential of gold… from the comfort of your very own home!

James West

Editor and Publisher

James West founded Midas Letter in 2008 and has since been covering the best of Canadian and US small cap companies. He covers global economics, monetary policy, geopolitical evolution, political corruption, commodities, cannabis and cryptocurrencies. As an active market participant, James is not a journalist and is invariably discussing markets...
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