Frequently Asked Questions

Firstly, because gold is a material that cannot be artificially manufactured, its value tends to be stable since it is not determined by external factors beyond supply and demand. Secondly, it possesses unique and inimitable properties. It is highly resistant to corrosion, so time does not affect it, allowing it to be accumulated easily without deterioration. It is also malleable and easy to melt—an extremely favorable trait for the jewelry and industrial sectors.

It is a tangible asset with inherent value: Physical gold is a real and tangible asset that cannot be created artificially.

It carries no counterparty risk: Unlike stocks or Treasury bonds, whose returns depend on the other party’s ability to make payments and can be affected by bankruptcy, physical gold has no counterparty risk.

It is a scarce resource: According to the United States Geological Survey, to date 244,000 metric tons of gold have been discovered, of which 187,000 have been extracted, leaving only 57,000 (23%) yet to be mined.

Its scarcity reinforces its inherent value: The relative scarcity of gold is its main advantage compared to fiat currencies.

It cannot lose its value: Due to its physical characteristics, gold does not lose its value and is immune to political interference. For this reason, gold has survived all monetary systems.

It has a 6,000-year history: Gold has played a fundamental role in society for millennia—from ancient Egypt to the modern era—facilitating international trade and directly contributing to the economic expansion and prosperity of numerous civilizations.

It is a store of value: Gold can be stored, recovered, and later exchanged for other assets without depreciating. In other words, gold is worth the same—or more—than when it was acquired.

U.S. Treasury bonds were once considered a safe haven because they could retain their value while generating income. However, the advent of negative interest rates has changed that perception; now a bond may be worth less than when purchased, as negative rates diminish its value.

Fiat currencies have a long history of devaluation or collapse. For instance, since the U.S. Federal Reserve was established in 1913, the U.S. dollar has lost 98% of its value relative to gold, meaning it has lost 98% of its purchasing power, whereas gold has retained its value.

It is a long-term hedge against inflation: According to the World Gold Council, commodities are commonly used to diversify portfolios during periods of high inflation. Although commodities perform well during such times, gold tends to do even better. In periods of low inflation, commodities may yield negative nominal returns while gold appreciates.

Gold is essentially immune to inflation due to its scarcity, making it a sensible inclusion in a portfolio as a hedge, especially as the global economy moves toward an unprecedented monetary quagmire.

It has been used as money for 2,500 years due to its ability to retain value. The first gold coins appeared during the Lydian civilization in Anatolia (modern-day Turkey).

It was also used as a stable form of money in Persian, Greek, ancient Roman civilizations, as well as in the Spanish, Portuguese, and British empires and under various international standards of the 20th century.

It is a safe haven asset: Investors often seek gold as a refuge to protect their capital during economic slowdowns or instability, when counterparty risks for most financial assets spike.

Gold tends to better withstand uncertain periods because it is not as directly tied to economic cycles. As a safe haven asset, it typically maintains characteristics such as liquidity, functionality, limited supply, irreplaceability, and longevity.

It is portable and anonymous wealth: Gold bars and coins combine value with portability, making them ideal for transporting wealth and savings across borders and conflict zones anonymously during times of social, political, and economic uncertainty.

It is universally accepted: Gold is recognized as money worldwide and has a highly liquid global market, which allows for ample opportunities to sell coins and bars in any major city.

It serves as emergency money: Military personnel operating in conflict zones often carry gold coins as emergency funds. For example, the British Ministry of Defense supplies RAF pilots and SAS soldiers with gold sovereigns for use during combat missions and operations in regions such as the Middle East.

Gold is independent of the banking system: Physical gold is one of the few assets that remain outside the financial system. It is not issued by any monetary authority, central bank, or government, which keeps it independent. Storing physical gold in non-bank vaults allows you to stay outside the financial system.

It carries no bankruptcy risk: Unlike other assets, gold has no risk of bankruptcy since it is not issued by any entity that can default. Gold bars and coins are not obligations of any party, so there is no risk of insolvency.

It is a portfolio diversification tool: Adding gold to a portfolio of bonds or stocks reduces volatility risk and can improve returns because gold’s price often has zero or negative correlation with other financial assets that are affected by business and macroeconomic cycles.

Numerous studies by academic institutions and industry organizations such as the World Gold Council have reinforced gold's role in portfolio diversification. Analysts typically recommend that multi-asset portfolios hold between 5% and 10% gold.

Currency hedge: There is an inverse relationship between the price of gold and the U.S. dollar. Typically, gold’s price moves in the opposite direction of the dollar, so accumulating gold can serve as a hedge against the dollar and help manage exchange rate risk for dollar-denominated portfolios.

Gold has practical applications: Its numerous metallic properties make it suitable for a wide range of technological and commercial uses. This accounts for its extensive use in electronics, circuit manufacturing, the medical and dental industries, solar panel production, aerospace technology, and its traditional roles in jewelry and decoration. New technologies continue to discover additional applications for gold, diversifying its demand.

Physical gold constitutes only a small fraction of total gold: London's wholesale gold market and the U.S. Comex trade massive amounts of paper gold through futures markets, overshadowing the physical gold market. However, these markets deal only in gold derivatives (futures, involving unallocated physical gold), which represent rights to gold that will never be converted into physical gold due to insufficient backing.

Physical gold is not an ETF: Owning physical gold provides direct exposure that ETFs cannot offer. While ETFs let you speculate on gold prices, they do not grant actual ownership of gold. Most gold-backed ETFs don’t allow buyers to convert their holdings into physical gold. In many cases, the location of the gold backing the ETF remains unknown. ETFs also involve various counterparty risks—trustees, custodians, issuers, etc.—while physical gold has no such risks.