10 places to buy gold and why it is a good idea now
Oct 5
posted by Michael Smith in
2012
| 2 Comments
Gold has gone up about 15% in the past few months. I continue to see gold and silver as good insurance against inflation and financial crisis and would recommend putting 10- 70% of your savings in gold depending on your beliefs in how likely an inflation/crash scenario is. There definitively is some possibility of this event from reading many financial analysts and looking at the investments of some famous investors and foreign central banks moving into gold over the past year. With Fed QE3, ECB and BOJ new money printing programs just announced in the last few weeks, it is more likely. The author of the book "The Crash Course" by Chris Martensen says
It’s no secret that I’m a big fan of owning precious metals. Why? Because it provides you with the most direct way to protect your wealth from paper money devaluation with no counterparty risk. Gold is the only financial asset I know of that is not simultaneously somebody else’s liability. That makes it rather unique. I think everyone who can should have at least some exposure in their portfolio to gold and silver.
There are many ways to invest in gold and silver, but for the individual who is just starting out, we highly recommend beginning by purchasing at least a few ounces of physical bullion.
More details at http://www.peakprosperity.com/blog/what-should-i-do-basics-resilience-part-7-protecting-wealth/43745
And he has said that he holds about 70% of his portfolio in precious metals right now.
If you are interested here are some easy ways to buy and hold gold:
- GoldMoney http://www.goldmoney.com/
- my view: easy way to get started in gold ownership with no minimums
- holds allocated shares of gold bars in secure vaults in London, Switzerland, Hong Kong etc
- easy to open an account online linked to your bank account(s)
- you can buy any amount (no minimum) of gold "goldgrams"
- monthly storage fee 0.015% is paid with goldgrams from your account, no minimum fee
- easy to sell and transfer money to any bank account in the world
- based in Jersey UK
- Silver Bullion http://www.silverbullion.com.sg/
- my view: reduced counter party risk for a second step in gold ownership and is outside your home country's control
- hold allocated gold and silver coins and bars in Singapore secure Freeport vault
- easy to open a STAR storage account online and buy gold or silver coins and bars
- minimum purchase is one ounce of gold or silver ($1800 or $40 at current prices)
- exempt from Singapore GST tax since October 1st 2012
- pay annual storage fee from your account cash funds
- easy to sell
- based in Singapore, a secure and financially stable country
- Gold coin dealer and you store yourself
- my view: a good idea to hold some of your gold personally as there is no counter party risk, but not for large holdings
- you hold it personally
- easy to buy from dealers in London or across Europe and USA
- can be bought through the mail eg http://www.ampex.com/ in USA
- minimum purchase is 1/10th ounce of gold or one ounce silver ($200 or $40 at current prices)
- premium over spot price is a bit higher than online vaults
- no counter party risks from other parties such as storage firm or vault in case they go out of business or are subject to extreme government regulation in a crisis
- you need to evaluate if the metal is genuine from either the reputation of the dealer or self-testing
- you are responsible for safe storage. For a few coins not a big problem, but could be an issue for larger investments.
- if you hide it well you need to document where it is for your will (and for yourself!)
- easy to transport on your person in times of emergency (mix it in with other coins in a purse and airport scanners don't notice the difference)
- I don't recommend putting in a bank storage box because 1) the very time you need it in a crisis banks may be closed for several months emergency "bank holiday" 2) governments have opened bank boxes and take the contents before. There are secure offshore non-bank private storage places that can be used for larger amounts eg Das Vault in Austria or various places in Hong Kong and Singapore
- Other options (that I don't recommend for beginners)
- Gold ETFs
- eg GLD, IAU, SGOL, AGOL
- you don't hold physical gold and it is not clear that the certificate is backed by 100% gold holding
- easy to buy and sell from your stock broker
- consider it a speculative investment that is great until a crisis happens and then might be worthless
- Gold mining stocks
- you don't hold a claim on gold at all, you own a share of a company with a hole in the ground that may contain some gold
- easy to buy and sell from your stock broker
- tends to go up and down more than the corresponding price of gold
- might increase in price due to take over such as the recent Chinese purchases of gold mining companies in Australia
- can also get gold mining ETFs such as such as GDXJ and GDX
- consider it a speculative investment that is great until a crisis happens and then might be worthless
- Perth Mint Certificates http://www.perthmint.com.au/
- certificate issued by the government of Australia for gold
- allocated
- if the government decided in the future that it wants your gold it would be easy for them to take it
- New Zealand Mint http://www.nzmint.com/bullion/storage
- similar to Perth mint but also let you deliver your own coins to store
- stable government with low debt ratio
- high premium over spot price for purchases (7%)
- BullionVault http://www.bullionvault.com/
- Similar to GoldMoney but the $4 per month minimum gold storage fee means you would want at least $2k invested to make sense
- only lets you link one bank account at a time to your gold, which might be a problem if you had to leave your original country in a hurry
- otherwise a good place
- Hard Asset Alliance http://www.hardassetsalliance.com/
- this has approx $10k minimum purchase for storage
- US based
- otherwise a good place
- Swiss Metal Assets http://www.swissmetalassets.com/
- this has approx$8k-23k minimum purchase
- is targeted at rare earth metals, doesn't sell gold and while they do sell and store silver is not designed for that
- aimed at long term investment of 5 years or more
- otherwise a good place
- Gold ETFs
#1 by Michael Smith on 10/10/12 - 4:51 PM
In my experience with gold coins you might pay a 2-10% mark up over spot depending on the dealer and the size of he coins and receive a similar spread when you sell. If you use a company like GoldMoney the spread is much smaller (1-2%) and you have a ready buyer there 24/7. And remember you pay a spread on all trades, whether it is for stocks, bonds, real estate or currency. The precious metal spread is more than most stock spreads and less than a typical real estate spread.
On the making change issue that is a reason why many folks who use gold coins to store value will buy a bunch of 1/10 ounce coins instead of all ounce coins even though the mark up is higher on tenths.
PS If you can buy your gold jewelry without the mark up (eg estate sales) and you know how to tell if it is genuine gold then it does have one benefit that it is easy to take past the TSA and other customs officials without having questions asked. Many Indian families store some of their wealth in this way.
PPS Utah introduce a law this year making gold and silver usable as currency in the state, 12 other states have similar laws in process.
http://www.profitconfidential.com/gold-investments...
#2 by Buy Gold on 2/8/13 - 1:54 AM