The Era of Digital Investments and the Lure of Gold

In our age of high technology, the world of investments offers numerous ways to invest in the precious yellow metal. These include unallocated metal accounts, gold certificates, gold futures, and instruments like GLD, whose shares are supposedly backed by physical gold.

However, despite the apparent convenience, it is crucial to understand the fundamental difference between these instruments and true physical ownership. Every virtual instrument, even if tied to the price of gold, essentially represents only an obligation of a specific bank or other organization.

Pitfalls of Virtual Ownership

With such an approach, an investor faces a number of potential problems. First and foremost, one must be absolutely certain that the obligation will be fulfilled, meaning the bank will not go bankrupt, freeze deposits, or impose an unfavorable exchange rate.

A striking example is the 2008 financial crisis in the US, when several major banks and financial institutions with a century-long history declared bankruptcy. Many depositors and investors lost their money then, while other banks survived only due to massive monetary injections from the authorities.

The Mystery of 'Repeatedly Sold' Gold

There is another important circumstance that often remains behind the scenes of global financial markets. Far more 'virtual' gold has been sold worldwide than is available in physical form.

This means that the grams or ounces of gold supposedly held for you in an unallocated metal account could have been simultaneously sold multiple times to different buyers. It is precisely such virtual instruments as futures, certificates, and ETFs that allow the same gold bar to be sold to several people.

Since all these buyers own their 'gold' virtually and have never seen it 'in person', sellers, often major dealers and custodians, can issue far more promises to deliver the metal than they possess in physical form. As a result, a certain portion of these promises will never be fulfilled.

True Control: When Gold Belongs to You

A simple conclusion follows from this: you cannot be one hundred percent sure of real gold ownership until you control its storage yourself. Only then is the asset fully at your disposal.

Features of 'Good Delivery' Bars

An interesting situation also arises with the so-called 'good delivery bars' traded on the London Stock Exchange. These bars, weighing about 400 ounces (approximately 13 kilograms), almost never leave specialized vaults.

1. Not every investor is capable of acquiring a bar of such impressive size.
2. Should such a bar leave the confines of a specialized vault, it immediately loses its 'good delivery bar' status. A costly special examination would be required for resale.

Thus, even this gold changes hands, for the most part, only virtually. This creates preconditions for abuse and a great temptation to sell the same bar to dozens of buyers, as none of them will come for their 'gold' in the foreseeable future.

However, as history shows, everything hidden eventually comes to light, especially in times of global crisis. When trust in the monetary and financial system is undermined, and global financial authorities actively 'print money', many investors inevitably turn their attention to gold as the only stable value.

Conclusion: Physical Gold – The Only Real Guarantee

It is evident that 'paper gold' cannot be considered a reliable tool for preserving savings. Moreover, in Russia, impersonalized metal accounts are not covered by deposit insurance guarantees, which makes them potentially riskier than a regular bank deposit.

Therefore, the only real guarantee for preserving your savings and complete independence from anyone's obligations is owning physical gold. This can include both gold coins and precious metal bars.