Investors looking to purchase physical gold bullion have multiple storage options, each of which possesses its own set of benefits and drawbacks.
Home storage can be an attractive and cost-effective solution, allowing for convenient access. But it can also be hazardous.
Home storage requires a secure safe with additional insurance coverage and strict confidentiality in terms of who knows where your gold is kept.
Safety Deposit Boxes
Physical bullion investments are one of the best ways to diversify investments and protect wealth in an economic downturn, but storage can be challenging and must take into account risks of theft or loss before making decisions on where best to keep them.
Some investors prefer storing their gold at home in a safe or vault, while others opt for bank or third party depository facilities as these offer enhanced security measures with 24/7 access. Unfortunately, banks do have specific operating hours, and their security may not be foolproof; additionally, your homeowner’s policy may not cover high-value items like gold and silver so it would be prudent to purchase an individual articles policy to cover such an investment.
If you choose to store your gold at home, ensure it’s placed in a specially designed safe for precious metals with an effective security system installed. Furthermore, be discrete about your investment by restricting who knows about it; doing this may prevent unnecessary attention being directed your way.
Many investors who invest in gold bullion choose to store part of their stash at home. If this is your approach, be sure that all metals are fully insured and stored in a suitable safe designed specifically for precious metals.
A more popular solution is using a specialist vault. They offer secure storage services for your bullion, often within LBMA-approved, insured vaults located within free trade zones. Vaults may either be segregated (where metals remain fully separate from each other) or pooled (where multiple investors’ metals are stored together).
An attractive benefit of vaulting is access at any time – without needing to keep them at home. Unfortunately, vaulting facilities often come at a premium in terms of cost; therefore, it’s wise to research them extensively to ensure they meet your security expectations and are transparent about operations with after hours email/phone support available 24/7.
Some investors choose bank vaults as an inconvenient and risky way to store their gold, since this option does not offer FDIC protection and withdrawals may need to be shipped or brought directly to a dealer for depositing.
Some companies offer private storage solutions where investors can rent safes or vaults in their home for investment purposes. Though supposedly secure against burglary attempts, fire and flooding remain potential risks; insurance coverage must also be managed separately when purchasing, selling and transporting privately held investments.
Some IRA providers also offer private storage of precious metals, but this can be an expensive alternative. Since your precious metals won’t be insured by the custodian and may violate IRS rules for self-directed IRAs, commingled storage (in which bullion is stored with other investments) should always be preferred over private storage options.
Either as they anticipate a global crisis or simply believe gold is an attractive investment, many investors have been stockpiling bullion in record amounts. And as with any physical investment, finding safe storage for precious metals is of utmost importance.
Key drawbacks of home storage:
There is always the risk of theft with home storage; even with an additional layer of security like a safe, someone may gain entry and steal your investments. Furthermore, it can be difficult to prevent your investments from being damaged during fire or flood events, while many homeowner insurance policies don’t cover jewelry or valuables stored at home.