Gold Investment Risks: Why 98% of Investors Don't Own Physical Gold Bars

A staggering 98% of individuals investing in gold lack direct ownership of the physical asset, typically holding paper contracts or fund shares instead. This prevalent practice creates significant counterparty risk, as investors depend on financial institutions to fulfill their gold claims. In times of systemic crisis or institutional failure, these paper claims could become problematic, potentially leaving investors without the promised asset. True wealth preservation and portfolio hedging with gold often require direct, unencumbered ownership of the physical metal, stored securely outside the banking system. This disconnect between investment and tangible ownership represents a critical vulnerability for most gold market participants.