What would you prefer? $100,000 in gold, or $100,000 in cash?

We made a video a little while ago asking the same question about silver. Great response to it. So we decided to make the same video about gold.

Here's the setup. On one side, 17 1oz gold bars. On the other, $100,000 in Australian fiat currency.

It Doesn't Look Like Much, But That's the Point

People buying gold for the first time often have this reaction. They hand over $5,000 and get a bar back that fits in the palm of their hand, and they're a bit thrown by how small it is.

It's not the size that matters. It's what it can do for you. And what an ounce of gold can do is keep you safe from inflation.

What $100,000 in Gold Looked Like a Decade Ago

Ten years ago, that stack of $100,000 cash had 25% more purchasing power than it does today.

If you'd taken that same $100,000 and bought gold instead, you would have walked out with 66oz. Fast forward that 66oz to today, and it's worth almost $400,000.

Meanwhile, the $100,000 in cash is still $100,000. Same number on the statement. A quarter less of what it can actually buy you.

Gold vs Silver: What's the Difference?

We've now done this comparison for both metals, $100,000 in silver versus cash, and $100,000 in gold versus cash. The real question people ask me is what's the difference between the two.

It comes down to volatility and upside potential.

Gold is the safer investment. It's less volatile, so it suits people with a lower risk tolerance. Silver is more volatile, and given how undervalued it is compared to gold, it carries more upside potential.

My Personal Precious Metals Ratio

I've got a relatively high risk tolerance and don't mind volatility, so I lean much heavier into silver.

My own precious metals holdings sit at 65% silver, 30% platinum, and 5% gold. I'm far more heavily weighted to silver than gold, because I expect silver to massively outperform gold over the years ahead.

This is not financial advice. This is insight into what I do with my own money, not a recommendation for what you should do with yours.

Silver and Gold Price Targets

I've talked in previous videos about why I expect silver to hit $300 USD an ounce within the next three years. That's roughly a 5x return from current levels.

Gold is harder to pin down in that same scenario, but a lot of the analysis I look at points to the $10,000 mark, which is just under a 2.5x return.

Platinum makes up 30% of my holdings for a similar reason. It's cheap compared to both gold and silver, and precious metals tend to run in a sequence: gold first, then silver, then platinum. Given where we are in that cycle, platinum is looking increasingly interesting to me.

None of that takes away from gold. It's an incredible asset that has delivered strong returns for everyone who's held it over the past decade.

Why 1oz Gold Bars Are the Smartest Buy

Getting back to the $100,000 comparison, those are 1oz gold bars, and they represent the most cost-effective way to invest in gold bullion.

I could have used a 500g gold bar instead, which is around 16oz, just one short of the 17 we used. But bigger bars aren't the most cost effective way in for most people.

The bigger the bar, the cheaper it is on the way in. But when it comes time to sell, you'll wish you'd bought 1oz bars, because the bigger the bar, the less you get back relative to spot.

At Liberty Bullion we pay 100% of spot price up to 1oz in gold bars. Anything bigger than that, we pay slightly below spot, because anything over an ounce is a lot harder for us to move, and sometimes it needs to be melted down. So when clients ask what gives them the best bang for their buck, I point them to 1oz gold bars.

If you don't have the capital ready to go for a full ounce, you don't need to. We've got half ounce bars right down to 1g gold bars for just over $200 a piece, so there's an entry point for any budget. Anything under 1oz still gets you 100% of spot when it's time to sell, but you'll pay a bit more premium going in because of the extra manufacturing cost involved in making smaller pieces.

Coins vs Bars: Why the Price Differs

Take a 1oz gold coin versus a 1oz gold bar. When you sell either back to us at Liberty Bullion, you'll get the same spot price for both.

But buying the coin will cost you more going in, because it's prettier, and someone has to be paid to make it that way. How much more depends entirely on the coin. Some collector coins go for well above their actual gold content because they open up an entirely separate collector market. For most buyers, that's not the priority, but for some, it's exactly what they're after. Have a look at our Buyback 1oz Gold Coin if you want a sense of how that pricing works.

Gold as a Portable Store of Wealth

$100,000 in gold takes up a lot less space and weight than $100,000 in cash. That density is one of the reasons gold works so well as a reserve asset. It's easier to move real value across the world in gold than in stacks of banknotes, and it takes up far less room in a vault than $100 bills do.

Why I Wouldn't Put $100,000 in the Bank

People ask me why I wouldn't just leave $100,000 in cash sitting in the bank. You absolutely could. There are a few reasons I personally wouldn't.

First, return. What's the bank going to give you? Four, four and a half, maybe five percent if you're lucky. You lose out to gold in a big way over any meaningful timeframe.

Second, counterparty risk. Is the bank actually safe? Are they good for your money when you come to ask for it back?

Third, access. Governments can restrict or freeze access to funds sitting in a bank account. Gold bars stored somewhere only you know about can't be yanked out with the click of a button. Someone has to come and find it first.

If storage is something you're weighing up as part of that decision, it's worth reading about how secure storage and insured delivery works through Liberty Bullion.

The Verdict

So that's why, for me, the answer is $100,000 in gold bars over $100,000 in cash. It also looks a lot better around your neck.

This video follows on from our $100,000 in silver versus $100,000 in cash comparison. Silver, done. Gold, done. That leaves one precious metal left, platinum. If you want to see $100,000 in physical platinum put to the same test, let us know.

What a time to be alive.

Sam from Liberty Bullion.