Physical gold in times of crisis

 Invest in physical gold in times of crisis versus paper gold

 In times of economic crisis, and throughout history, people have taken refuge in physical gold, just as they have done during the devastation of wars, physical gold is money recognized by all cultures of the world as an object of value.

 Doug Horg of Hard Assets Alliance points out in a recent article that this is precisely what happened at the start of the financial sector crisis in 2007-2008, at which time investment demand for gold skyrocketed. Buyers paid premiums of 9-15% more to buy coins if they could find them and not everyone had the right sources of information to buy gold at the time.

 There was not enough physical gold to meet the demand. Delays in gold shipments of between one and two months were the norm, and delays of up to four months were not uncommon. There were days when companies selling gold were told not to sell by their suppliers, as no one could promise when, or even if orders could be fulfilled. In what should have been their most profitable time in history, many merchants were unable to fill orders. Even though demand was through the roof, they couldn't sell what they didn't have. Much of the shortage on the supply side was caused by large million dollar buyers.

 When the financial economic panorama worsens, large capitals demand large amounts of physical gold price. Had the financial system not been 'stabilised', obtaining physical gold might well have become almost unaffordable.

 Those who demand gold in these cases do not want paper substitutes. Back then, at the height of the crisis, there was no problem on Wall Street buying paper gold in the form of ETFs or “gold” in unallocated accounts, which perfectly reflects what the investor needs to know about the relative desirability of buying paper gold versus physical gold. Paper gold is created out of nothing, but with physical gold to date, luckily no one has succeeded.