Confusing physical, paper, and mining exposure

Investors often treat physical gold, gold ETFs, and gold miners as interchangeable. They are not.

Physical

No counterparty, storage cost, illiquid in a crisis if not held locally.

ETFs

Liquid, cheap, but you own a claim on a trust — not the metal itself.

Miners

Equities with operational leverage to the gold price. They can outperform gold in bull markets and dramatically underperform in bear markets or on company-specific problems.

The takeaway

Decide what job you want gold to do before you decide which form to buy.