What is the best way to store gold and silver as storing precious metals could be a headache for novice investors? What are the options and which option is the best? Basically, there are three options to store gold.
What is the Best Way to Store Gold and Silver
Options to Store Gold and Silver
- At home (in a safe or well-hidden)
- In a bank’s safe deposit box
- In a private storage firm
There are pros and cons to all options, but home storage or a private vault is the best option. Before we analyze those two options, I will have to explain why the bank’s safe deposit box will have to be excluded.
Storing Gold in a Bank
Banks do offer an excellent level of security and peace of mind, but storage fees can be high, as they can range from $100 to $500 annually. Accessibility is another issue, as the investor can only have access to his gold, during business hours, which coincide with most people’s work schedules. Also, investors will not be able to access their gold during public holidays. These restrictions can cause large problems in the event of a national emergency.
A gold investor puts his money into gold, to protect himself from the risks associated with the fragility of our financial system. To buy gold and then store it in a bank safe deposit box, will be at least inconsistent because, storage of bullion in a bank’s safe deposit box runs the risk of confiscation, due to bank bankruptcy (bail-ins), or the risk of government confiscation.
If you hold gold in a bank, and the bank goes bankrupt as was the case in Argentina, then you lose the advantage of immediate access to a means of payment for your basic needs in times of trouble, when access to traditional means of payment like cash or bank cards is hampered. The risk of bank failure is real and it was repeated a few years later in Cyprus.
There is also the risk of government confiscation and it actually took place in the US in 1933 with President Roosevelt’s Executive Order 6102. The risk of government confiscation is small but nevertheless is still there. Confiscation could happen if there is panic in the banking system or just before a new monetary system is announced.
Storing Gold at Home
Storing gold at home is the least expensive for storing precious metals, as customers benefit from the absence of storage fees. This form of storage is ideal for customers with small to medium size collections of precious metals. All you have to do is find a secure spot in your house or property and store your valuables.
Before you do anything you must know that keeping gold at home has also a few drawbacks. Investing in precious metals is a completely private decision, the fewer people who know about it the less of a potential target you will be. So don’t tell anyone you keep gold at home, and at the same time make sure it is well hidden.
If thieves find it or if you lose it, it is gone, and it is gone for good. You see gold bullion coins are easy to sell, as they are bought and sold by individuals, coin dealers, banks, and commercial dealers without question.
Attention, to storing gold bars at home, as in order for the dealer to accept them, you might need to get your gold bars refined, so the dealer can verify the gold content, which costs money and takes time.
Is buying a safe solution? No, I do not think so. An upright safe is always visible and it does send the wrong message. A hidden safe is also not a good idea either, you see a burglar can find it and if he cannot open it he will come back with his friends. In addition, a punk with a pistol can easily convince you to open the safe.
A sunken floor safe could be a better idea, a safe you can install on the floor of your closet or garage. These safes are generally small but invincible, as the door to them is actually below the level of your floor, often hidden under the carpet.
In my opinion, the best place to hide valuables is up in the attic. A few pounds of gold can easily be stashed in the far corner of your attic and there is no chance that any intruder, is going to go up there and search.
Private Storage Firm
On larger quantities of gold, I recommend the use of a private storage firm (precious metal depository). Precious metal depositories offer top-level security, as they are highly guarded establishments that are under constant surveillance, with all activities inside the depositories monitored and recorded.
Some precious metal depositories offer two forms of storage, segregated and communal. Segregated storage, allows customers to keep their valuables in an individual storage compartment, preserved for private use. In comparison, communal storage, allows customers to keep their valuables in shared storage areas along with other people’s bullion. Both types of storage offer excellent security. Unfortunately, not all depositories offer both forms of storage, so it is important to verify the information in advance before committing to a particular depository.
Furthermore, many depositories offer further means of protection through their accounting auditing and insurance policies. If after an inventory inspection, an amount of gold is missing, customers should remain confident it will be covered by the insurance policies.
Storing gold should not be a headache, after all the purpose of buying gold is to ensure peace of mind and financial stability. Choose the type of storage you feel most comfortable with and that should be enough.