The best way to invest in gold

Maleeha Bengali, founder of MB Commodities Capital, joins TheStreet to explain the best way to invest in gold.

Transcript

00:00Here in America, we have this big chain called Costco, and it's selling gold bars.

00:05And so what do you think about consumers actually going to a retail outlet and buying gold bars?

00:11Yeah, you know what, physical gold is one of the best ways to invest in gold because

00:15the ETFs have another issue.

00:17You could be long the GLD, for instance, or another ETF that's not backed by physical

00:21gold.

00:22And there could be a situation like we saw back in 2008, you get a systemic crisis, these

00:26ETFs fall, even the gold price goes up.

00:29So imagine you're sitting there on an ETF and you're like, wait, I'm not making money.

00:33Physical always holds value.

00:34So retail investors, you can trade the ETFs, but make sure you have some physical stored

00:38in the vault somewhere.

00:39But it's hard to unload a gold bar.

00:40Yeah, that's true.

00:41It's a very good point.

00:42But you know, back in the day, people store them in the mattress or whatever have you.

00:45But that's why Costco's bars are selling up because there's a bit of a premium even on

00:48silver as well.

00:49So I can't say you put 100% of your wealth in that because it's hard to do that.

00:53But get exposure to ETFs, but also keep some gold bars around.

00:57So for you, actually going to Costco is not a laughing matter.

00:59It's a real deal.

01:00It's not a laughing matter.

01:01It's real.

01:02We own physical gold.

01:03And in London, we do as well.

01:04There's a bit of a premium on that.

01:05But that never loses value to what gold price is.

01:07The ETFs can disconnect because there is a trade between the financial and the swaps,

01:11right?

01:12And most people don't realize the risk.

01:13And at the end of the day, you are taking a risk.

01:15If the counterparty gets defaulted, sure, you can lose out.

01:18I mean, that's a very small chance, right?

01:20But there is an inherent risk to think about.

01:21So physical is always the best way to trade.

01:27Yeah.

01:28Yeah.

01:29Yeah.

01:30Yeah.

01:31Yeah.