Obstacles to holding gold

Gold has been used for centuries as a currency, store of value and input to jewelry and (more recently) industrial products. It is recognized around the world. Gold is recognized around the world and is renowned for its durability, relative scarcity and many uses.

However, there remain numerous obstacles today for investors and consumers of gold:

Access to gold as an investment is limited.

Investors have retail access only in areas where the market has a developed investment infrastructure.

Gold isn’t very usable for daily interactions and purchases.

Gold is held in either a tightly controlled investment product ecosystem or in small but indivisible physical holdings. Since gold is difficult to access, this asset class is separate from the daily payments segment of the economy and highly impractical for consumption purposes.

Securing gold holdings can be risky.

Seeking to ensure the physical safety and security of gold holdings can be risky and becomes increasingly difficult as gold holdings increase.

Verifying the authenticity of gold holdings is difficult.

Determining the purity of the physical gold or reliability of those purporting to provide gold custodian services is challenging and requires diligence and oversight.

Today, direct access to gold is largely institutionalized as gold reserves are held in vaults generally accessible only to large banks and institutional investors. These gold markets represent the majority of the liquid gold market, i.e., gold that’s easily bought or sold at a fair market price.

As a result, it can be difficult for a broad spectrum of people to access gold. While banking and payments have become electronic during the past 50 years, gold holdings have not extensively entered the financial system.

Risk Summary

An investment in, or purchase of, one or more Gold Tokens involves risks and you could lose money. Some of the risks you may face include: Blockchain Ecosystem Risk, Gold Value Risk, Gold Custody and Insurance Risk, Gold Delivery Risk, Cybersecurity Risk, Regulatory Risk, Operational Risk, Capital Controls and Sanctions Risk, Coronavirus Disease (COVID-19) Risk and Conflict of Interest Risk. A more extensive discussion of these risks can be found in the Risk Disclosures.