There are several ways to hold gold exposure and they are not equivalent. The differences matter most in exactly the circumstances people buy gold to protect against.
| Form | You hold | Main risk |
|---|---|---|
| Physical, in your possession | The metal | Theft, storage, wide dealer spreads |
| Allocated storage | Specific bars held in your name | Custodian failure, storage fees |
| Unallocated account | A claim on the institution, not on specific metal | You are an unsecured creditor if it fails |
| Physically backed ETF | A share in a fund holding metal | Fund structure, custodian, market hours |
| Futures | A contract for future delivery | Leverage, margin calls, roll cost |
| Mining shares | A company that produces gold | Equity and operational risk — not the metal |
Mining shares are frequently described as leveraged gold exposure. They do respond to the gold price, but they also carry operational risk, cost inflation, jurisdiction risk and management quality. A miner can fall while gold rises. It is an equity investment in a company whose product happens to be gold.
Common belief
"Buying physical gold means no counterparty risk."
What is actually true
Holding metal yourself removes counterparty risk and replaces it with theft, storage and verification risk — plus a dealer spread on both purchase and sale that is frequently several percent each way. The risk is transformed, not eliminated, and the spread is a certain cost against an uncertain benefit.