Paper Precious Metals vs. Physical


Paper silver & gold are digital products, securities, or derivatives that actually have little direct connection to physical silver & gold. It continues to be discussed that the ultimate purpose of paper precious metals is little more than for a few large corporations to control the market pricing mechanisms. The paper market is full of risks for individual investors, as you are not truly owning physical silver or gold. Many people do not understand this difference between paper and physical metals; this article will look at investing in paper markets vs. owning physical metals.


What are paper precious metals?

Paper precious metals are comprised of securities and/or derivatives of fractionally backed physical metals. It does not provide direct ownership of physical precious metals. Most investors buy paper metals as ETFs (Exchange Traded Funds). These funds trade similar to common stocks; the two most common ETFs for paper are GLD and SLV.



GLD is the ETF symbol for SPDR Gold Shares. GLD was originally listed on the New York Stock Exchange in November 2004 and now also trades on The Singapore Stock Exchange, The Tokyo Stock Exchange, The Stock Exchange of Hong Kong, and The Mexican Stock Exchange. GLD was created as an option to invest in gold without taking physical delivery of the gold. GLD is fractionally backed by 400-ounce gold bars held in London vaults. The share price closely follows the spot and futures pricing of gold, along with some fees.



SLV is the ETF symbol for iShares Silver Trust. This fund was created to offer investors a convenient option to invest in silver without the need for physical delivery. SLV began trading on the New York Stock exchange in April of 2006. SLV moves closely with spot and futures prices of silver and is fractionally backed by physical silver held in the fund’s vault.


Should you buy paper precious metals or physical precious metals?

The paper markets are much larger than the actual physical markets. The ratio of paper gold to physical gold is over 100 to 1, while the ratio of paper silver to physical silver is over 400 to 1. This means that for every 1 ounce of physical gold supply, there are over 100  ounces of paper gold supply, and for every 1 ounce of physical silver supply, there are over 400 ounces of paper silver supply. Since the supply ratios are so lopsided, a paper investor is buying gold and silver which may not actually exist. The paper market is not fully collateralized by the physical metal and is therefore at risk of manipulation and volatility. There is not enough supply of physical gold and silver to back up all the ETFs. With physical metals, you can hold the asset in your hand. It is tangible and verifiable, unlike paper metals, which could have no actual intrinsic value.

Another risk of ETFs is that the investments are controlled by third parties which involve a lot of trust and risk. The investors have virtually no direct access to the physical metals the fund holds in its vaults. An investment in paper relies on the fund’s structure, leverage, and honesty. As the fund use banks as custodians, the investment further relies not only on the fund’s actions but also on the bank’s actions. If the bank were involved in any fraudulent activities, the investment in the paper metal would be at risk. You do not actually own the gold or silver that is being held in the ETF’s vaults; you only own the share of a fund, whose price is only determined by a potentially manipulated market, not the actual price of the physical precious metal. 

Compared to paper metals, physical metals’ most important advantages are that they are tangible and have actual intrinsic value. An investor can realize the value of the asset in their personal possession. Although there are some added challenges of delivery and storage, the investor fully controls the asset and can decide what they want to ultimately do with it. Physical metals have no counterparty risk like paper metals and have the full upside potential in price. 

For a prospective investor, an ETF could be a possible investment because of its ease of entry and exit, straightforward monitorability, small minimum purchase requirement, and low storage fees. However, for an investor looking to possess physical ownership with zero counterparty risk and the ability to exchange the asset all over the world at current physical market prices, buying physical precious metals is the better decision. 

Paper metals and physical metals are vastly different products. If you are looking to buy actual physical bullion at the current low price, GoldClub Direct offers renowned products with very low premiums. Explore our website or call us at 1-800-700-4715.


All Updates and Market info are provided as a third party analysis and do not necessarily reflect the explicit views of GoldClubDirect LLC.. and should not be construed as financial advice.

Precious Metals Supply & Demand



In order to understand the precious metal market, it is important for investors to recognize the effects of supply and demand. Supply and Demand are the factors that determine the market price of precious metals. An increase in supply will shift the supply curve to intersect with the demand curve at a lower price and a higher quantity demanded. An increase in demand will shift the demand curve to intersect at a higher price and a higher quantity demanded. The opposite effect will happen with a decrease in supply or demand. 


Gold Supply

Gold has been smelted down since at least 3600 B.C. To this day we are continuing to mine gold around the world. Mining gold accounts for 75% of the new supply, while the remaining 25% comes from recycled material. Gold is a limited supply and cannot be created, meaning what we have on the planet will be the total amount of gold. Every year, around 120 million troy ounces (3,700 metric tons) of gold are added to the world’s gold supply. The best estimates suggest that about 205,000 metric tons of gold have been mined throughout history, with 50,000 metric tons discovered, but not yet extracted from underground reserves.

Gold is virtually indestructible. Pure gold cannot corrode, rust, or be destroyed by fire. Some of the gold in circulation today could have been mined thousands of years ago. A good example of gold’s reusability is Perth Mint’s public gold pour. Ever since 1993, they have held a public gold pour into a cast multiple times a day. This gold bar has been melted and recast over 65,000 times, without any destruction of the gold.

Gold is produced in countries around the world. China is the largest producer, accounting for 9% of output. Output is followed by Russia, Australia, Canada, and the United States. South Africa once accounted for a majority of the gold production, but their output has declined recently.


Silver Supply

Like gold, silver has also been mined for thousands of years and continues to be mined today. Estimations predict that over 1.5 million metric tons of silver have been mined throughout history. Today, more than 30,000 metric tons of silver are mined each year.

 One major difference between the supply of gold and silver is that approximately 90% of the silver supply that has been used was discarded without being recycled. This, along with an increase in industrial uses, has led the world’s above-ground silver stock to fall since World War II. 

The mining costs of silver compared to its price also make silver a less profitable mining business than other precious metals. There are very few silver-only mines, with most silver being mined as a byproduct in other mines (70%). This leads to the silver mining supply being vulnerable, as it must rely on the mining of other metals. The weakening supply trends have also led to a drop in global reserves of about 4%.  Silver production, however, did grow 5.3% in 2021 due to the recovery in output from the Covid-19 pandemic. Silver mining was led by Mexico, followed by China, Peru, Australia, and Poland.


Gold Demand

The demand for gold plays a significant factor in determining its price. Gold is the most demanded investment commodity. Central banks, investment funds, and individual investors all have a large amount of gold in their reserves.  Gold has emotional, cultural, industrial, and investment value, leading it to be demanded all over the world. 

Other than being an investment asset, gold is used in jewelry and manufacturing. Jewelry, although decreasing, is the largest sector of the demand for gold, accounting for 46% of the total gold demanded. Gold coins and bars demand the next most amount of gold, approximately 22% of the supply. Individual investors are demanding more as a result of high inflation and economic concerns. Central bank reserves have about 17% of the total amount of gold. Emerging market central banks are increasing their reserves, and European banks have stopped selling gold, creating a significant source of demand. Technology, electronics, and other uses make up the remaining 15% demand for gold.  All of these sectors help to increase its value as a precious metal. 


Silver Demand

In 2021, Silver demand strengthened to 1.05 Billion oz of silver. This leap is an impressive gain of 19% from 2020. The demand increase mostly reflected the resumption of manufacturing after the closures from the Covid-19 pandemic. Like gold, silver has many functions that lead to its demand worldwide.

Silver demand is increasing faster than its supply, which is creating a supply deficit. Its increasing demand is mainly due to its industrial need for green technologies. For example, silver inputs for solar panel production (photovoltaics) grew 13% in 2021. Green energy initiatives are growing and will continue to grow as more countries adopt green energy. The Russia-Ukraine conflict is also pushing countries to adopt a green, self-sufficient economy to promote energy security. This trend will drive the demand for silver further. 

As of 2021, Industrial demand accounts for about half of the annual silver demand. Silver is also used in electric vehicles, and it is forecasted to surpass photovoltaics in the future. Silver’s industrial demand has led it to have a strong correlation with the Energy Transition Index, an index comprised of energy transition ETFs (solar, renewables, carbon, wind, etc).

Other than industry demand, Silver has demand in photography, jewelry and silverware, and silver coins and bars. Silver demand in photography, jewelry, and silverware all increased slightly with the suspension of worldwide lockdowns during the pandemic. Silver coins and bars showed the most volatility, with a 36% increase in demand in 2021, representing a quarter of the quantity demanded of silver for the year. Silver supply trends will have difficulty keeping up with the increasing demand for silver, as can be seen by the physical deficit since 2019. 


If you are looking to be a part of the growing demand for gold and silver bars and coins, look around GoldClub Direct for the best value products on the market.


All Updates and Market info are provided as a third party analysis and do not necessarily reflect the explicit views of GoldClubDirect LLC.. and should not be construed as financial advice.

Government vs Private Mints

Precious metals have been mined for thousands of years all over the world. After being extracted from the earth, these metals must be refined and processed to separate any and all impurities. Once the precious metals have been processed, they can be taken to refineries and mints worldwide to produce bars, coins, or other variations of precious metal products. There are two main types of mints that investors should know about, government mints and private mints.


Government Mints

Government, or sovereign, mints are controlled by the national government in which they operate. The main product these mints produce is coinage. Coins produced at sovereign mints are considered legal tender or otherwise commemorative. Each coin has a face value, enabling its use as currency. For precious metals, the intrinsic precious metal value of the coin usually is more than the face value, so they are rarely used as actual currency. Coins minted at government mints come with guaranteed metal purity and specialized security measures to provide authenticity as needed.

The United States Mint is one of the largest mints in the world. They have production facilities in Philadelphia, San Francisco, Denver, and West Point, with a bullion depository in Fort Knox and headquarters in Washington D.C. Products from the US Mint include mintmarks depicting where the coin was minted. A “P” is from Philadelphia, a ”S” is from San Francisco, a “D” is from Denver, and a “W” is from West Point. One of the US Mint’s most popular programs is the American Eagle, which includes gold, silver, platinum, and palladium coins. Other examples of sovereign mints include the Royal Canadian Mint, Perth Mint, Austrian Mint, Chinese Mint, and Royal Mint. Sovereign mints produce some of the most popular products, like the Canadian Maple Leaf, Austrian Philharmonic, Chinese Panda, UK Britannia, and South African Krugerrand. Sovereign coins usually carry a higher premium over spot price due to their collectibility. 


Private Mints

Private mints are owned by companies that produce non-governmental bullion products. The main two categories of products private mints create are bars and rounds. If you would like to learn more about the difference between coins and rounds, read our blog discussing this matter. Since there is no government directing their production, they are able to create products with their own branding and design. There are more variations with private mint products, as they can also be any weight, shape, purity, and metal content. There is still some regulation, as private mints must abide by the standards set by the London Bullion Market Association (LMBA) to be authorized for trading.

There are many prestigious private mints around the world. GoldClub Direct offers products from Credit Suisse, Valcambi, SilverTowne Mint, and others. These mints are well-renowned worldwide and offer great quality bullion at low prices. Private mint products tend to have a lower premium as their standards are not as strict as sovereign coinage. 


Should I buy from a government mint or a private mint?

Buying from a sovereign mint vs. a private mint is up to individual preference. Products from a sovereign mint will be a good addition to a portfolio for an investor that is looking for legal precious metal coinage backed by a national government. Products from private mints are well suited for investors who are looking to invest in precious metals with the lowest possible premium. GoldClub Direct stocks products from only the most respected government and private mints.


All Updates and Market info are provided as a third party analysis and do not necessarily reflect the explicit views of GoldClubDirect LLC.. and should not be construed as financial advice.

What is a troy ounce?

A troy ounce is a unit of measurement used to weigh precious metals. Many people often see “troy ounce” and think it is a fancy way to say “ounce” and that it is an equal form of measurement to the ounce we use in our daily lives. This is not true.  A troy ounce is a specific measurement, primarily used for precious metals.

The troy ounce can be traced back to Troyes, France during the Middle Ages. Troyes was known for its prominent trade market. Traders from all over the globe traveled there to trade goods, including gold and silver. In order to standardize trading, the merchants developed a system of weight for products going through the market. Their system is thought to be based on the Roman monetary system. Their currency was weighed in “aes grave” or what today we would call a pound. 1/12th of an “aes grave” was called an “uncia” or an ounce. Like the Roman monetary system, 1/12th of a troy pound is a troy ounce. 

As this system became more popular, it spread to other parts of the world. French-born King Henry II of England decided this system should be adopted by the British coinage system. It was not until the 15th century that we saw troy weights, as we know them today, being used. 100 years later in 1527, the British recognized the troy ounce as the official measurement of gold and silver. The United States adopted this standard in 1828.


Why do precious metals use the troy ounce?

Today, the troy ounce is the last used metric of the troy weighting system. This troy ounce is the primary weighing unit used at most sovereign and private mints around the world. This helps to ensure the purity of the precious metals as well as provide consistency among weights of various bars and coins. This measurement system has been used since the Middle Ages and provides constant weight standards throughout history. 


Troy Ounce vs Avoirdupois Ounce

When someone thinks of an ounce, they are thinking of the avoirdupois ounce. This ounce is used to weigh everyday items like sugar or grains from the grocery store. Although they have the same name, their weights are slightly different. This idea is similar to the difference between a nautical mile and a mile. One troy ounce weighs 31.1 grams while one avoirdupois ounce weighs 28.3 grams. A troy ounce is approximately 10% heavier than an avoirdupois ounce.

Although this might seem like a small difference, it is very important when buying and selling bullion. When you see the price of gold or silver per ounce, it is in terms of troy ounces. Most transactions are more than one troy ounce, so the difference in ounces could easily add up if you are not careful. Some sellers could list a product at 100 ounces, but the product would only weigh 90 troy ounces, leading the buyer to lose 10% of the value of the product. Very rarely will you see bullion in terms of avoirdupois ounces, but if you ever do, you can multiply that weight by 0.91 to find its weight in troy ounces. Make sure to check the item’s specifications to ensure its weight.

Even though a troy ounce weighs more than an avoirdupois ounce, an avoirdupois pound weighs more than a troy pound. This is because there are 16 avoirdupois ounces in an avoirdupois pound, but only 12 troy ounces in a troy pound. This could be confusing, but since troy ounces are only used for precious metals, there is no necessity to know the conversion to troy pounds.

GoldClub Direct weighs all of their products using troy ounces or grams. By understanding what a troy ounce is, buyers will have a better understanding of the precious metals market. If you have questions about the weight of the products or would like to learn more, do not hesitate to reach out at 1-800-700-4715.


All Updates and Market info are provided as a third party analysis and do not necessarily reflect the explicit views of GoldClubDirect LLC.. and should not be construed as financial advice.

Why Buy Gold in 2022?

Whether you are new to gold or have been investing/collecting for years, there is always space for a new piece of gold in your portfolio. Gold has long been the most well-known asset to use as a store of wealth. Since gold was first discovered, it has held great importance to our society.  If we use history as an indication, gold will always hold this significance. 

The first record of gold being smelted down was in 3600 B.C. by Egyptian goldsmiths, mostly smelted for its value as a commodity. 1000 years later, we have the first records of gold being used as jewelry. Gold’s beauty caught humans’ eyes from the beginning of civilization and is still seen in the same light. 

In 560 B.C., the first gold coins were struck in Lydia, the Iron Age Kingdom in Western Asia Minor. This marked a pivotal moment for gold. Greek and Roman Empires followed suit and minted their own gold coins. Although gold held value before this moment, its value could now be realized in the form of currency. Although gold is no longer used as a mechanism for trade, its value as a store of wealth has stayed steady.


So, why should you buy gold? 

Gold has maintained its value better than any other financial holding. Let’s say you lived 2000 years ago; one ounce of gold would let you buy around 350 loaves of bread. Today, if you had one ounce of gold, that could buy you about 350 loaves.  2000 years have passed, yet gold still has been maintained in real purchasing power. 

This is a great sign for investors looking for a safe way to store their wealth. Despite the price of gold fluctuating in the near term, historically it has always returned to its real purchasing power. This trend will not disappear, as gold is still seen as a safe-haven asset, and will always have intrinsic value. 

During times of instability, gold prices tend to hold their value. During Germany’s inflation period from 1918 to 1924, its currency became severely diminished, but the purchasing power of gold remained virtually unchanged. In the United States, over the past century, we have seen inflation cause the dollar to lose much of its purchasing power. Over this same time, gold has not. 

Gold is a great asset to diversify your portfolio. Gold does not directly correlate to stocks or bonds, meaning that in an economic downturn, gold does not have to go down. This is why gold is seen as a hedge against the economy because, during a crisis, gold can become more valuable. 

Gold is also a beautiful, natural metal that holds emotional value in our society. Gold possesses stunning colors that make people turn their heads when they see it. This is the reason the highest nobility has worn gold as jewelry for thousands of years. It also does not rust or tarnish, letting the elegance last for lifetimes. Gold is a meaningful aspect of our society because of the way we view the precious metal. 

Gold is a tangible way to store your wealth, and will always have value, both in good times and in bad times. If you are looking for a new investment opportunity, gold is a low-risk asset that will be a great addition to your portfolio.


What type of gold should you buy?

There are two main varieties of gold bullion investment, gold coins and gold bars. Both bars and coins are easily transportable, liquid, and stable. Gold bars are great because they usually have less of a premium than gold coins, meaning you can get more gold for every dollar you spend. There are usually higher weights with bars, also leading to a lower price per ounce of gold. Gold bars are also easy to store because of their compact nature, and high value for low weight. Many high-volume gold investors tend to buy gold bars to increase their position, as it is the most economical way to add gold to your collection.

Gold coins are also a great choice for investors or collectors. The allure of gold coins has been around for thousands of years. There is a much larger variety of gold coins than gold bars. There are many different sizes, rarities, and designs among coins, making it so there is something for everyone. Many coins are minted by governments, guaranteeing their quality. Gold coins also have great liquidity due to their high demand. Part of this reason is because of their collectability. Like art, many gold coins are collectibles due to their rarity, design, condition, and demand.

When looking to buy gold coins, here are some of the most popular: 

The South African Krugerrand was the first modern investment-quality coin created by a national government in 1967. At one point, it accounted for 90% of the gold bullion coin market. It depicts President Paul Kruger on the obverse and a springbok antelope, the country’s national animal, on the reverse.

The American Gold Eagle is the US Mint’s most popular gold coin and is one of the most popular gold coins internationally. The 2022 coin features a new design, first released in mid-2021. The obverse features a rendition of Lady Liberty, and the reverse shows a profile depiction of the American Bald Eagle.

The Candian Gold Maple Leaf is another popular choice among gold coins. Known for the symbolic maple leaf on the reverse of the coin, the Gold Maple Leaf is highly sought-after by investors and collectors. The obverse face displays a portrait of Queen Elizabeth II.

The British Gold Britannia is the staple coin of the Royal Mint.  This classic coin is highly recognized across the industry for its craftsmanship and beauty. It also includes many detailed security features to ensure you receive the correct coin. The obverse depicts an effigy of Queen Elizabeth II and the reverse depicts Britannia defending her country.

The Austrian Gold Philharmonic is another excellent series of gold coins. These coins are minted in commemoration of the Vienna Philharmonic Orchestra. These high-quality coins highlight instruments such as violins, harps, and Viennese horns on the reverse, and feature the pipe organ found in the Musikverein on the obverse.

The Chinese Gold Panda is a favorite for many investors and collectors around the world. Each year, with the exception of 2001 and 2002, the reverse face of the coin changes to highlight the panda species in a different light. This makes each year’s design unique. The obverse displays an image of the Temple of Heaven.

All of these coins are highly respected gold coins that have extremely high standards. This has made these coins valuable commodities and very liquid assets. There will always be a market for these coins, which has led them to become the most prominent coins on the market.

GoldClub Direct offers all of the coins listed above, as well as others, on their website. They also offer gold bars and gold rounds from various reputable private mints around the world. If you are looking for any gold products to add to your collection, look no further than GoldClub Direct to find the best available products for the most competitive prices on the internet.


All Updates and Market info are provided as a third party analysis and do not necessarily reflect the explicit views of GoldClubDirect LLC.. and should not be construed as financial advice.