Gold has crossed into the digital age, and the market could be much bigger in five years.
The World Gold Council and Boston Consulting Group estimate digital gold now represents $45 billion to $55 billion in assets. In an Oct. 19 report, they say the market could reach $160 billion to $170 billion by 2031. That assumes it becomes easier for investors to buy and use digital gold, and also identifies as much as $700 billion in potential long-term demand -- a measure of possible interest, not money already invested.
Digital gold can make buying and selling easier, but the details vary across products. Here are three questions investors should ask before committing money.
What Do You Actually Own?
Some platforms let customers buy a share of gold held in a vault. Others issue digital tokens tied to a set amount of metal. The World Gold Council includes both in its definition of digital gold, while excluding gold-backed ETFs.
The important details are in the agreement. Does it grant ownership of identified metal, an interest in a pool, or a claim against the provider? Investors should also check whether the provider can lend or otherwise use the gold.
Those rights can affect what happens if the company runs into financial trouble.
Who Holds and Checks the Gold?
A digital balance depends on more than the number on a screen. Find out where the metal is stored, who holds it, and whether an independent party checks the holdings.
Look for recent audit or inspection reports and read what they actually verify. A report may confirm that a vault holds gold. That doesn’t mean it proves what claim each customer has to the metal.
Earlier coverage of digital gold platforms also examined how online purchases connect to vaulted metal. The provider’s own terms should be the final reference for any specific product.
Can You Take Delivery?
Some investors may be content to sell their digital holdings for cash. Others may want the option to receive physical gold.
Check whether delivery is available where you live and how much gold you need to qualify. Ask about fees for making and shipping bars or coins. A small account balance may not qualify for delivery even when the platform offers it.
Also review trading spreads and account fees. Convenience can be valuable, but the full terms determine what that convenience costs.
The council’s research suggests digital gold could introduce a new audience to the metal. For investors considering it, the strongest starting point is knowing precisely what their purchase gives them — and how they can access it.
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byUnited States Gold Bureau