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TOPIC: Who owns & stores physical gold?

Who owns & stores physical gold? 7 months 2 weeks ago #1

  • Buckeye
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After Jim Rickards, it got me thinking about how one would go about purchasing and storing physical gold? From who? How much? Where do you store it? What form is the best to hold? Scams to watch out for?
I've asked that Erik discuss on an upcoming episode. Would love board comment.
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Who owns & stores physical gold? 7 months 2 weeks ago #2

  • tankumo
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Buckeye, it may be a good idea to visit local jewelry store just to look at them first, touch it, feel it. Tell them you want to see recognized bar, like Johnson Mathey gold and silver bars, 1 oz, 10 oz....etc.

If you buy from website, be careful. Northwest territorial mint just filed bankruptcy, many people paid and didn't get the products.

Try kitco.com, there you can see wide range of products. But buying through website you have to pay insurance and shipping. If you buy just a little, you can try buy a few from local jewelry stores, it's a bit more expensive than website but you don't have to pay shipping and insurance and you get the products right away, and you can also pick and choose your bars.

But educate yourself first, look at the variety of products, do you want recognized or unrecognized bars, or do you want bullion coins.....etc.
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Who owns & stores physical gold? 7 months 2 weeks ago #3

  • ErikTownsend
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@Buckeye, we'll try to get it on the show soon, but I don't think it will work this week. We have a SUPER packed show and it's going to be a struggle to stay anywhere close to our 1:15 max time target. So here's a little info to hold you over...

There are lots of options and I think it depends somewhat on your style and openness to technology. The "old school" view is that gold is about safety so you want allocated physical bullion. A couple of names there - in my opinion Nick Barisheff at BMG in Canada is one of the most knowledgable and straight shooting guys in that business. But he offers a first class service at a first class price. He's not the cheapest on the market when it comes to storage.

Perth Mint gets an unfair reputation in my opinion. They have been widely criticized on the Internet because their "bullion certificate program" involves "hypothecation", which is just a big word to say they owe you the gold; you don't actually own legal title to specific physical bullion. But that's the whole point of what the certificate program is for - to eliminate storage fees by hypothecating the metal to facilitate their retail fabrication business. If you don't like that plan, as many goldbugs have critizied it, FINE. They also have a fully allocated storage program where your bars are titled in your name and you have the bar serial numbers. Obviously you have to pay storage fees in that case.

The other direction to consider is the guys like BullionVault and GoldMoney and a few others that I've forgotten, frankly. These are guy who have innovated some cool new idea, such as having what amounts to a bank account denominated in gold, but you still have a debit card that can withdraw local currency from an ATM against your account.

I think that it's a matter of personal taste... I can easily argue the case that the innovators like BullionVault are clearly in the lead when it comes to technology vs. somebody like Perth Mint. But wait... By the same token I can make the exact same argument with the opposite conclusion, i.e. you would be crazy to go with these newfangled things because who knows how they really work and what the hidden risks could be. Gold is all about safely you're much better with physical allocated bullion!

Neither argument is right. It's a question of your objectives and risk sensitivities.

Hope this tides you over for now, @Buckeye!

Erik
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Who owns & stores physical gold? 7 months 1 week ago #4

  • JohnnyMac
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If you are more of a retail investor it's always best to check with the Better Business Bureau before making a purchase. Local coin shops is a great way to buy a few coins and dip your toe in the physical metals waters.

Bitgold is a new fintech company making big waves in the retail gold market. However, it has its own pitfalls that you need to research before using their services.

Be careful about Numismatics and Rare coins. What really matters is the ounces you hold not the collector value. Beware of marketing tricks as well.

Again, If you are a beginner its best to simply do your research just like any other investments.
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Who owns & stores physical gold? 4 months 3 weeks ago #5

  • bigqueue
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Buckeye wrote:
After Jim Rickards, it got me thinking about how one would go about purchasing and storing physical gold? From who? How much? Where do you store it? What form is the best to hold? Scams to watch out for?
I've asked that Erik discuss on an upcoming episode. Would love board comment.

I own some "unallocated" gold at Everbank (www.everbank.com) and there is no cost for storage that way. I could own it there as Allocated gold, which means I would have actual gold bars in my account....or I could have them shipped to me.....which I still might do at some point. The cost of shipping depends on the amount you have shipped....but it is about 1% I think......but I agree that gold is insurance, so it really needs to be in your hand...else, there isn't much insurance IMHO.
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Who owns & stores physical gold? 4 months 3 weeks ago #6

  • jimbud
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Ummm. While I've taken a haircut buying it, I own a decent amount of gold that is currently moving between my sock drawer and my safety deposit box. While coins suffer from some small haircut, there is zero counterparty risk with an ounce of gold in your hot sweaty hand.
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Who owns & stores physical gold? 4 months 3 weeks ago #7

  • LBL
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When I first started buying Gold in 2002/3, I was un-sure about how the market worked - and wanted to verify that it did.

I bought a 1 ounce gold coin at one coin shop, then drove a few miles and sold it at another. Cost me the $15 spread.

>> purchasing and storing physical gold? From who? How much? Where do you store it? What form is the best to hold? Scams to watch out for?

If you visit coin stores, you will find good ones.

Same for on-line e-tailers. Though there is a caveat about on-line - for a few weeks with an on-line order, they have your money and you have nothing except a promise. Things can go sideways during that time.

I think my first APMex order was for about $40. 2 or 3 rounds. Worked my way up to larger average order sizes. Then APMex raised their spreads (they used to sell Eagles and Maples with a 99 cent spread) and I went elsewhere.


ONE NOTE: Priority #1 is keeping your receipts in an organized manner.

If you ever transport the precious metals, it's good to have receipts, especially if you're in the US. Police departments across the country are financing themselves using so-called civil asset forfeiture.

If you transport the PM's without receipts, you're just one guy with a whole bunch of cash/ liquid assets. They just have to declare you a suspected drug dealer, and according to the rules they play by (basically, none), they then have the right so take your stuff.

There are also rules about purchasing Silver in Canada & shipping them to the US. I believe it's a Census Bureau rule - a $2000 limit. Then there is a Canada rule - they are allowed to ship .9999 Maples to US customers, but not some other forms, so easily.


In general, I would say, verify your assumptions. It's easy to think that American Silver Eagles are "worth more" because the APMex website SAYS they'll pay more for them.

Try taking that Silver Eagle to a coin dealer. They usually do not pay so much over spot. You pay $3 over spot & sell for 50 cents over spot, typically.

In that circumstance, well known generic Silver rounds have a lower "buy-sell spread." You pay $1 over spot & sell for 0 to 10 cents over spot.

You lose less to the spread - in that case.

If you are in the SF Bay Area & dealing with, for example, Camino Company, they might pay better for an Eagle.


I also have a few other rules/ guidelines -
* A simple business deal is a good business deal.
* I only do a deal if I am completely focussed and know I want to do it. Equivocating & hesitating in front of the coin dealer is not a good thing to do.
* If I am surprised by the spread, e.g. used to being paid spot for gold maples, then I walk in and it's a $20 mark-down, that gives me pause. In that case I usually walk away. I want to be comfortable with the spread.
* I try to visit a coin dealer to sell during the "markets closed" time or right after. If the markets are fluctuating wildly, it's harder for a coin dealer to keep up, and it is logical for them to raise spreads. Once the markets are static, the coin dealer can relax, have lunch, think about the spreads, etc.
* Once I caught a coin dealer making a mistake in my favor, gave me one too many silver half dollars. I immediately disclosed it. I didn't raise my voice, but the transaction was clearly witnessed by 1 manager and one owner sitting in their offices. Good way to build "store cred".
* I always have price targets set up for buy transactions. VERY aggressive price targets. I don't have infinite money to spend on PM's & I need to get a good deal. The last time I bought Silver, I paid $14.52 an ounce shipped. That was a late 2015 purchase I think.

It is a little bit like Martial Arts. The markets move SO FAST that you need to have most, if not all, scenarios worked out in your mind ahead of time because at the time of the transaction, you will be spending a lot of money in a few minutes. That can be stressful if you are not focussed, and sure that it is a good transaction.
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