It's not a passive investment unless you decide to buy gold equities or other forms of the metal besides physical gold. Like a stock or bond, a "passive" investment still has the potential to generate income for you through interest and/or dividends. Selling actual gold is the only way to make money from it.
Given its great value, physical gold needs to be kept in a secure location. Most likely you will incur storage fees should you choose remote storage for your bars, ingots, jewelry, or gold coins.
Prices may increase when demand for gold increases. If you buy gold during these times, it might not be such a good thing since the price of gold eventually levels off again once demand spikes.
You risk paying a markup that is more than usual if you are not vigilant about where you get your gold. Although this isn't exactly an "issue" per se, it is a potential disadvantage to be aware of.
The main financial benefit of gold is that it typically works well as an additional layer of insurance against inflation and economic uncertainty. Even when other economic situations aren't doing as well, gold has a lengthy track record of doing well and remaining steady.
Gold may frequently be converted into money pretty easily. In actuality, gold comes with a high level of liquidity.
Gold has historically had extended periods of value stability. Even when gold prices fall, the overall value typically doesn't decline to the point where it becomes a less appealing store of wealth.
Typically, it's not too difficult to locate a buyer willing to make a reasonable offer.
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