Can someone tell me what the real on-the -ground difference is between paper gold and and going to the bank only to be told that the money you deposited into your account isn’t actually there?
I am not a financial genius, nor do I claim to be, but I cannot understand why a person would entertain the thought of purchasing paper gold. It’s a ridiculous concept to me.
Mrs. AV
Don't think to long and hard about what it means to "own" a share of stock without having a certificate.
I am not a financial genius, nor do I claim to be, but I cannot understand why a person would entertain the thought of purchasing paper gold. It’s a ridiculous concept to me.
****************************************************
It works like any other commodity. If you buy or sell oil, you usually don’t want to take delivery of the actual oil. You are betting on the price going up or down.
However, you can take delivery if you wanted.
So, if only a tiny number of people wanted to take delivery, the gold isn’t there.
They are seriously over selling gold that they don’t have.
Paper gold is as useless as a government promise. Unless you hold the bullion in your hand all you have is a promise to deliver at some point in the future.
” but I cannot understand why a person would entertain the thought of purchasing paper gold”
It would likely be investment firms rather than individuals. They don’t want to pay to store the gold. It’s probably a short term buy, maybe a hedge against something else they are holding. Paper gold doesn’t cost much to trade. Moving gold around, storing it in a vault is another matter entirely.