Do you want gold in your hands, or exposure to its price?
Physical gold is the closest fit if you want to hold a bar yourself. You also have to arrange storage and consider purity, the premium you pay to buy it and the price you could sell it for. The World Gold Council includes delivery, insurance and storage among the costs of owning physical gold.
A gold ETF lets you buy and sell shares through a securities account, with the underlying gold handled through the product’s custody arrangements. That saves you storing a bar yourself. It does not remove ongoing costs or mean every share can be redeemed for metal.
Source: World Gold Council：How to invest in goldFINRA：Exchange-Traded Funds and Products
Three ways to buy, three different holdings
| Form | What you hold | Questions to resolve |
|---|---|---|
| Physical bars or coins | Physical gold; custody contracts matter if someone else stores it | How is purity verified? Who stores it? What is the dealer buyback spread? |
| Physically backed gold ETF | Fund or trust shares, depending on the structure | How is gold held? What ongoing costs apply? Can retail holders redeem physical gold? |
| Gold token | Rights defined by the issuance documents | Where is the gold? Who can redeem? What minimum amounts and geographic limits apply? |
Taking delivery depends on the redemption terms
Do you eventually want a gold bar, or would selling your holding for cash meet your needs? That changes which costs and conditions matter most.
Physical delivery depends on eligibility, minimum quantities, collection locations and shipping charges. If you only plan to trade shares, spreads and ongoing fees may matter more. Gold tokens have their own conditions too: being able to buy one on a platform does not necessarily make you eligible to redeem it with the issuer.
Why gold reserves do not tell the whole story
Reserve information can show what assets are held. It cannot, on its own, tell you who legally owns them. A token might represent ownership of gold or a claim against its issuer, and that distinction matters when you want the asset back.
Custody and redemption terms give “gold-backed” its practical meaning. Gold prices can fall, and tokenised products can add issuer, platform and technical risks. Those differences matter more than the word gold in a token’s name.
Source: BIS：Financial stability implications of tokenisation
References
Sources consulted: · Editorial policy
World Gold Council guide to gold ownership and costs; an industry-body source.
Research on tokenisation and associated rights or risks; not approval of an individual product.
FINRA introduction to ETFs, exchange-traded products and costs in the US; individual terms depend on the prospectus.