Why families holding gold long-term should own it physically

A gold ETF is only useful for as long as the market that trades it is functioning. For a family that intends to hold gold across generations, physical gold is the version that actually does the job.

A gold ETF and a bar of physical gold are not the same asset. They look similar on a balance sheet, they track a similar price, and the industry tends to treat them as interchangeable. They are not — and the difference matters most precisely for the family that intends to hold gold for the very long term.

A gold ETF is a paper claim on gold, intermediated by a chain of counterparties: an issuer, a custodian, a market maker, a clearing system, an exchange. In ordinary times, that chain is invisible. In a genuine moment of systemic disruption — the kind of moment for which families historically hold gold in the first place — every link in that chain becomes a point of failure. Trading can be suspended. Redemptions can be paused. Counterparties can default. The ETF position remains, technically, on the family's statement, but it cannot be accessed, moved, or used.

Physical gold has none of those layers. It is the asset that exists outside the system that trades it. That is the entire reason a long-horizon family holds gold to begin with. If the holding cannot survive the scenario it is meant to insure against, it is not doing its job.

Many of the families we work with have drawn the conclusion and acted on it. They have rotated out of gold ETFs and into physical gold — with attention to the detail that matters in this specific asset:

• A mix of denominations, from twelve-and-a-half-kilo bars down to coins, so the holding can actually be used in different scenarios.
• Storage split across at least two countries, to diversify jurisdictional risk.
• One vault inside the banking system, one vault outside it, so the holding does not depend on a single regime, regulator, or institution remaining functional.

For a family, physical gold is not an investment to hedge short-term market volatility, and it is not a trade. It is the ultimate physical reserve — the asset of last resort, to be held, and if necessary spent, in a world where everything else has failed. Held on those terms, as a small and prudent line in the balance sheet, it earns its place across generations. Held as a speculative position, or as a paper proxy, it does not.

For a family that intends to own gold for the next thirty years, the question is not whether to hold gold. It is whether the form in which they hold it will still be there when they need it.