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3 Reasons to Consider Physical Gold vs Digital Gold

Taking steps to diversify your portfolio is a proactive way to protect your financial future. Precious metals such as gold have historically been used as hedges against recession and are often regarded by analysts as safe-haven assets during periods of inflation.

If you’ve already taken the step to add precious metals to your portfolio, you may be wondering what similar options are available. During your research, you’ve probably stumbled upon the term “digital gold.” But what is digital gold? How does it work?

What Is Digital Gold?

Digital gold is also referred to as DGC—Digital Gold Currency. In an economic climate where higher-risk options such as cryptocurrencies have well and truly taken off, it’s tempting to want to play a hand in the digital game. While this may seem like a relatively simple new way of adding gold to your portfolio, the term “digital gold” is somewhat misleading. When you buy digital gold, you’re still buying physical gold. So, what’s the difference?

Is Digital Gold the Same As Real Gold?

Yes… And no. As mentioned above, digital gold is still actual, physical gold, but you won’t be able to have it in your personal possession or in a gold IRA. When you purchase digital gold, it’s often already held in a vault by the company you bought it from. And unlike physical gold held in an IRA, which you may eventually hold in your hands as a distribution in kind, your digital gold will likely be stored out of your reach for its lifetime.

While diversifying with a digital gold account may seem like a practical alternative, digital gold isn’t without its own considerations.

If you’re trying to decide between purchasing digital gold or physical gold, here are a few things you may want to think about before making your decision.

Why Might You Buy Physical Gold Over Digital Gold?

Here are three important considerations when it comes to buying physical gold vs digital gold.

1. You Can Verify the Purity and Legitimacy of Physical Gold

One of the downfalls of digital gold is that it’s more difficult to verify. Without having the gold in your possession, you can’t verify for yourself whether digital gold is pure gold or that it is even legitimate—something that doesn’t apply to physical gold or even gold stored in an IRA, which can be withdrawn as a distribution in kind once you retire. That’s why many people choose to buy gold they can see, touch, and hold in their own possession. Making sure that your gold is purchased from a reputable distributor like U.S. Money Reserve is one of the most important factors in ensuring your gold’s authenticity.

2. You May Have to Be More Diligent in Verifying Digital Gold Distributors

As it may be harder to verify the purity of digital gold, you may need to be more diligent in verifying the legitimacy of your service provider and/or vaulting company. One way to verify a company’s legitimacy is to check whether they’re associated with and/or endorsed by reputable partners. U.S. Money Reserve, for example, is a member of the American Numismatic Association and a PCGS Authorized dealer, with an accredited A+ rating from the Better Business Bureau (BBB) and a AAA rating from the Business Consumer Alliance.

Legitimate gold bars also each have a unique serial number, whether purchased digitally or as physical gold. These numbers not only describe characteristics such as the weight, origin, and manufacturer of the gold, but also provide a means of tracing the gold and keeping it secure.

Whether you’re considering digital or physical gold, it may be beneficial—and help provide peace of mind—if you first do your research to ensure that you are purchasing gold from a reputable and trusted distributor.

3. Owning Digital Gold Means Having Less Control, Which May Mean Less Peace of Mind

One of the best things about purchasing physical gold is that you have more control over where it’s stored, be it in your own home, in a safety deposit box, or in a private vault depository. Because digital gold is stored on your behalf, you don’t have as much flexibility when it comes to taking physical possession and moving your gold. Knowing you have an extra level of control with physical gold may provide additional peace of mind.

What you can do to learn more

There are many reasons Americans are increasingly adding physical gold to their portfolios. If you’re considering purchasing gold for the first time, our CEO, Angela Roberts, has written a piece discussing why now is always a good time to buy gold. Or if you’ve already decided to help protect your wealth by adding physical precious metals to your portfolio, you can visit our article on the best way to purchase gold.

To help you make well-informed decisions regarding precious metals and your portfolio, we’ve also put together a simple-to-understand guide on physical gold products currently available through U.S. Money Reserve. If you’d like to learn more, request your free Gold Information Kit here, then give us a call. Our dedicated Account Executives will be happy to walk you through the guide and help discuss your gold buying options.


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