Summary
When all else fails buy gold.Making gold into a glittering alternative investment. But gold or any precious metal is no substitute to cash.
Analysis
Idea, on the drawing board, appears to be good.But fraught with risk. The target segment seems to be the small investor.But then what use is a selling machine when there is no corresponding buying machine? Any investment needs a buy and sell arrangement.You can't buy at a vending machine and then rush to sell at a gold shop. Convenience is an important factor in investing, just as in online trading.
Any investment has the potential to rise or fall.The only difference is, the demand for gold is steady and outstrips supply.And the desire to hoard gold is present in the genes of many human beings.The usage of gold is mostly ornamental, restricted to certain special events. So in the hands of an individual investor, is a dead investment - money locked in, which could have been put to better utility. Like any other investment when the time to sell comes may not fetch the right price.
Another factor to consider is- you can't buy gold at a vending machine and walk out without fear stalking you. Drawing cash at an ATM is one thing and buying gold at a vending machine is another thing.They are two different status symbols.
Gold needs space for storage.Even if the idea takes off it has potential to put more paper in circulation thereby creating inflationary trends and other problems.
In times of crisis gold always looks like a better alternative and cash looks like a tortoise.But as always invest wisely. Keep your options open. Where there is potential to gain there is potential to lose. Price movement of not only gold but other investment instruments is not only speculative but also unpredictable.
Gold glitters but cash is the king.
