Now that iTulip is officially defunct, I thought I'd resurrect MEGA's (Malcolm) thread over there and transplant it here. Apologies in advance to @Patrick.
The only problem with the "consumer gold" is when you try to sell it for anywhere near the price at which you bought it - try a 50% haircut at least. The big question for "consumer gold" (as opposed to "collectible" coins or good delivery bars) is provenance. For all anyone knows, it's gold-plated tungsten (which is virtually identical in density to gold). Plus, there is the BSA/AML aspect, "Why do you have so much gold, are you a terrorist or money launderer?" You have to clear 30% just to net out on the collectibles tax, to which gold is subject.
No, gold for most people is an insurance policy against the resolution of the Triffin Dilemma; namely, the dissolution of Bretton Woods / Petrodollar.
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