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A guide to gold ownership

14 Oct 2020
A guide to gold ownership

Gold is an important asset in wealth preservation, seen as a safe-haven asset in times of global uncertainty. 

When acquiring this precious metal it is important to consider a number of factors, including investment options, the source, purity, security and storage.

How can I buy gold?

There are many ways to invest in gold such as;

  • – Through owning traditional physical gold bars,
  • – A share in an Exchange Traded Fund (ETF) known as “paper gold”
  • – More recently, digitally, in the form of gold-backed stablecoins.

Many people like owning physical gold as a way to diversify and protect their wealth. However, there are some disadvantages that come with owning physical gold, such as storage and insurance costs, transportation and buying through bullion dealers who tend to add large spreads on the price.

Generally, ETFs have the advantage of it being cheaper than physical gold as there are no custody fees. It is also easier to buy and sell in an online liquid marketplace. However, the disadvantage is that you don’t actually own the gold. Rather, a share in a trust that owns the gold. This presents a counterparty risk leaving you exposed if the company ever went bust.

Gold-backed stablecoins have recently become a popular avenue for owning gold. Similarly to ETFs, this option provides a liquid marketplace and less hassle around the custody of gold bullion. Of course, it does not come without the need for due diligence to ensure you have direct ownership of the underlying gold and confidence in the supply, quality, security, storage and the ability to redeem or sell out of your holdings.

What to consider when buying physical gold?

Some things you should consider when buying physical gold are:

  • – Does this method represent direct ownership of the underlying gold?
  • – Is the supplier or dealer reputable? 
  • – Is the gold actually where the supplier says it is? How is this verified?
  • – Does this method of owning gold provide liquidity around the purchase and sale of gold bullion?
  • – What is the purity of the gold? 
  • – How secure is the storage of the gold bullion? 
  • – Is the gold insured? 
  • – What is the process for redemption? 

What makes xbullion secure?

Trust, Credibility, Audit, Insurance, Transparency

What xbullion offers is a global settlement layer for gold bullion. It gives participants direct ownership of physical 9999/LBMA-accredited gold from world-renowned suppliers, at near-spot prices and without ongoing custody fees. xbullion has built the digital gold solution without sacrificing any of the core advantages that people want and need in physical gold.

gold ownership
image: xbullion

The advantages of xbullion include its best practices around insurance, quality control, storage and auditing. Most importantly, owning GOLD tokens through xbullion ensures direct ownership in the underlying gold. The tokens are also redeemable at any time for cash or physical gold (subject to a 1kg minimum) and delivered by an insured global courier network. 

This may be a direct rival to Exchange Traded Funds (ETFs) as purchasers of ETFs do not own the underlying gold bullion and can also experience significant fluctuating premiums above spot price. xbullion allows traditional ETF investors to directly own their gold bullion whilst trading at a level closely tracking the spot price provided by best-in-class suppliers. As such, xbullion allows for direct gold ownership without forfeiting liquidity or market depth.

gold ownership
image: xbullion.io

Xbullion works with some of the world’s largest over-the-counter desks. Some highly respectable names in the precious metals industry such as StoneX and Baird & Co have partnered with xbullion to supply the physical gold. Exchange partners Zipmex also have the credibility base covered, having received the coveted AUSTRAC stamp of approval. Zipmex operates the exclusive xbullion portal and also listed the GOLD token on their exchanges across Singapore, Thailand, Indonesia and Australia.

After purchasing xbullion GOLD tokens the underlying gold is insured and stored securely in geo-dispersed vaults. Xbullion carefully monitors laws and regulations in the jurisdictions in which it operates to ensure safe and secure ownership of gold. 

GOLD holders will also be provided transparency over their investment via the comprehensive audits conducted by leading global accountancy firm BDO, made available to the public on the xbullion website. 

Xbullion has received backing from strategic investors, including publicly listed blockchain technology firm DigitalX and financial services boutique Aura Group, as well as Australia’s oldest and most reputable bullion dealer Jaggards, a founding partner in the business.

In addition, The xbullion team and advisors bring a wealth of experience across precious metals, wealth management, auditing, investment banking, proprietary trading and technology. This has enabled the creation of an exceptionally competitive and secure technology solution.

You can find out more from David Lightfoot CEO of xbullion, as he speaks to Ausbiz about xbullion’s best in class gold management solution.

Get the latest market news and updates with xbullion’s Gold Report

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