The Rush to Gold Vaults

July 17th, 2017 by

There is a growing trend spreading like wildfire across the investing community as more and more signs point toward a possible market disruption in the near future.

It’s not simply a rush to safe havens like gold; it’s a veritable gold rush of storing precious metals in vaults.

The Essentials of Storage

Many people who are accustomed to investing in paper assets like stocks or bonds are unfamiliar with the critical importance of storing a tangible asset. Like a boat, car, or other large physical asset one can own, you’ve got to have some place to keep it!

Vault at the New York Fed

Vault at the New York Fed

In the case of a purely financial asset like gold—i.e. your bullion can’t really propel you to work at 50 mph—it is especially important to ensure that it is not vulnerable to theft or other such liabilities. In the same way that you might store a family heirloom like jewelry or fine silverware in a storage facility, safe deposit box, or a home safe, owning precious metals carries the responsibility to safely store and insure your gold and silver.

Many high-end investors that can diversify a portion of their portfolio into gold have found that leaving their gold unaccounted or, worse still, vulnerable to some type of theft is beyond rational comprehension. This is why, according to reporting by Thomas Seal and Eddie van der Walt for Bloomberg Newsso many are now making sure they secure their metals in a vault, whether they are holding gold as a long-term inflation hedge or as a temporary safe harbor from market volatility. This is happening across North America, Europe, and even places like Singapore.

Considering that an ounce of gold costs over $1,230 at the time of writing, paying a comparatively negligible fee to keep that gold or silver safe and secure seems like a no-brainer. It’s like that $2 warranty you can take out on your television or cable modem; some see it as trifling, but allocating just that little extra money now could save you much, much more down the road.

(photo: Jason Baker (Flickr) [Creative Commons CC BY 2.0] )

(photo: Jason Baker (Flickr) [Creative Commons CC BY 2.0] )

In many cases, someone cannot use their gold as collateral or include it in their individual retirement account (IRA) unless it is stored in an authorized depository—meaning a legitimate vault that meets certain standards. Keeping your gold stored in an authorized depository or vault facility is one of the most important steps anyone who holds a significant amount of precious metals can take to secure their wealth for the long haul.

It is highly recommended that gold buyers also seek a secure and trusted storage facility to hold their metals, alleviating the vulnerability of keeping such a valuable asset in one’s home while also helping mitigate the risk of theft.

 

The opinions and forecasts herein are provided solely for informational purposes, and should not be used or construed as an offer, solicitation, or recommendation to buy or sell any product.