While most investors turn to ETFs and digital trading to invest in gold, the popularity of physical gold bars is on the rise. Maleeha Bengali, CEO of MB Commodities Capital and contributor on TheStreet Pro discussed the potential advantages of owning physical gold as a long-term investment.
Related: Analyst revamps gold and silver outlook ahead of 2025
Full Video Transcript Below:
CONWAY GITTENS: In America, we have this big chain called Costco. And they’re selling gold bars. And so what do you think about consumers actually going to a retail outlet and buying gold bars?
MALEEHA BENGALI: Physical gold is one of the best ways to invest in gold because the ETFs have another issue. You could be long the gold, for instance, or another ETF that’s not backed by physical gold. And there could be a situation like we saw back in 2008, you get a systemic crisis. These ETFs fall even though the gold price goes up. So imagine you’re sitting there on an ETF and you’re like, wait, I’m not making money. Physical always holds value. So retail investors, you can trade the ETFs, but make sure you have some physical stored in the vault somewhere.
Make the most of your money with TheStreet:
Reach your money goals faster with a financial workoutCritical financial moves to make before the end of 2024You’re behind on finances at mid-year — how to get back on trackHere’s how to fight inflation while maximizing retirement saving
CONWAY GITTENS: But it’s hard to unload a gold bar.
MALEEHA BENGALI: Yeah, that’s true. It’s a very good point. But back in the day, people store it in the mattress or whatever, have you. But that’s why Costco’s bars are selling out because there’s a bit of a premium even on silver as well. So I can’t say you put 100% of wealth in that. It’s hard to do that, but get exposure to ETFs, but also keep some gold bars around.
CONWAY GITTENS: So for you, actually going to Costco is not a laughing matter. It’s real.
MALEEHA BENGALI: We own physical gold and in London we do as well. There’s a bit of a premium on that, but that never loses value to what gold price is. The ETFs can disconnect because there is a trade between the financial and the swaps. And most people don’t realize the risk. And if they are taking a risk, if the counterparty gets defaulted, sure could lose out. That’s a very small chance, right. But there is an inherent risk to think about. So physical is always the best way to trade.
Related: Veteran fund manager issues dire S&P 500 warning for 2025
