What is "Paper Gold"?
The term paper gold means you have a piece of paper acting as a
substitute for the physical gold. With paper gold, you don't own the gold;
you own a promise to receive physical gold. In plain English, it means you
are a creditor of the corporation issuing the paper gold certificate, thus
subject to counterparty risks. Owning the physical gold has no counterparty risk and
is fully under your control.
Examples of paper gold are gold certificates issued by banks and
mints, pool accounts, futures accounts and the NYSE listed exchange-traded
fund. With these products you own a piece of paper rather than
physical gold. These paper products give you exposure to the gold
price; you can make a profit by selling them to someone wishing to own paper
gold, however when the music stops and nobody wants to purchase paper
anymore, it becomes worthless since you may not able to redeem your metal.
To learn more about paper gold, please read
Paper Game, written by James Turk, Founder and Chairman of