Storing Physical Gold & Silver – Your Options
If you have invested in gold and silver and taken physical delivery, you have made a very wise choice as opposed to having all of your metals exposure in electronic forms such as ETF’s and Certificates. While electronic forms have their place, they are not a replacement for holding physical metals personally.
Personal possession of physical gold and silver provides both privacy and portability. If purchased in the right manner, no one has to know about your holdings. You can stick your gold in your pocket and walk around. You can load your silver in your car and drive off. But where do you keep your holdings safe? Let’s examine the options:
Safe Deposit Box
This option is my least favorite. Unlike all of your other financial assets, your physical metals have no Social Security or Tax Identification Number attached to them. Once you put your metals in a bank box, they come under the umbrella of your contractual relationship with the bank (and by extension, the government). Should you ever become embroiled in litigation, a seizure, or worst of all a bank holiday, your metals will have been compromised.
In addition, your hours of access are restricted. The contents are not insured. Your privacy is reduced. Granted, safe deposit boxes are easy. But why subject yourself to these liabilities?
Insured Depository
There are several excellent depositories in the United States and Canada. I do not recommend Europe, as it is simply too far away and there are facilities here in the States that are just as secure.
Most of the significant depositories are located in Delaware. All are insured by Lloyd’s of London or another international insuring body. All utilize the highest security available (think Mission Impossible). Your items are fully insured for their market value. You can have your items shipped to you at any time. Expect to pay from .5 to 1% of the market value per year for storage and insurance.
We have relationships with the top depositories around the country. We use depositories for both our personal as well as our clients’ IRA and 401K account holdings. We receive no compensation for referring our clients to them, and are happy to consult with you as to what the best location(s) might be for you to consider.
Bury It
Seriously – this is a very real option. You don’t have to worry about losing your gold and silver to a burglar or having it damaged in a fire. Just don’t lose your memory!
If you decide to go this route, use a container that is airtight and waterproof. You can use common PVC pipe with end caps sealed with glue. Place the coins in baggies. Add a small amount of white rice in the pipe to absorb any residual moisture. Bury the PCV in a hole with a small amount of cement. PVC will last for decades underground.
Where do you bury it? Your location should be neither too easy nor too difficult to find. Not too easy, so that the gold won’t be found by a thief, but not so difficult that, years later, you or your heirs have trouble locating it. Find a place, on property you own, that you’ll remember, but that isn’t obvious if someone learns you’ve buried something valuable.
Hide It
“Hiding” is particularly attractive for smaller quantities. Stop and ask yourself, “If I were a thief, where would I not look?” There are dozens of places in your home where no one would think to look. For instance, thieves do not look under the kitchen sink or bathroom vanities – why would they? Neither do they look behind the pots and pans, the drawer under the stove, or the laundry room. These are all excellent places to hide items.
The garage is another good option – behind cleaning supplies, behind boxes of old books, empty suitcases, storage racks or water heaters. Avoid traditional hiding spots, such as a jewelry box, the lingerie drawer (the most common spot), bedroom closets or the freezer.
One disadvantage of this method is the risk of fire. But, even melted gold or silver are worth approximately 95% of the market price to a refiner. The only other risk is forgetting where you have hidden your silver or gold.
Use A Safe
Having a safe in your home is my personal favorite. I believe every precious metals investor with $50,000 or more in metals should have a jewelry quality safe. A Sentry brand-type safe from Office Depot, Home Depot or Walmart is NOT a safe. They are a lockable fire box and nothing more. They instill a false sense of security. Period! Even if you bolt it down, the safe can be opened with a drill, electric saw or sledge hammer in less than one minute. Two men can pick it up with no problem. If nothing else, this type of safe is most valuable as a decoy safe.
A gun safe is not much different. Your typical gun safe is basically a locked box, not unlike the Sentry safe above, meant to keep firearms out of casual hands. Only if you have invested at least $1,500 to purchase a quality unit do you have the beginning benefit of theft protection. Thieves use a circular saw with a carbide blade to cut a hole in the side of a typical gun safe, again in less than a minute. The size and weight alone of a gun safe are not an effective deterrent.
If you have $50,000 in metals or more, or you are unwilling to take a chance on theft no matter the amount, you need to invest in an Underwriters Laboratory (UL) listed safe of Class “TL-15” or higher. “TL” stands for “Tool Resistant” and “15” is the minimum number of minutes a professional safe technician with all the proper tools would need to penetrate the safe. This rating is a minimum. You should plan on spending $1,500 or more. Please contact us if you would like to discuss safes further. We consider client education on storage a very important part of our firm’s service commitment and we receive no compensation from the sale of safes.
Your Secret
However you choose to store your metals, inform two people as to the details. They need to be individuals whom you completely trust and who are tight lipped. They will need to gain access to your items if you become incapacitated or die. Write down the locations and details in such a way that no one other than those closest to you would be able to decipher the instructions.
The choices boil down to three, or a combination: Store your gold in a safe deposit box, bury it, or hide it indoors. Each method has pluses and minuses, so you’ll need to decide for yourself which is best for you. While you’re deciding, don’t overlook the possibility of using more than one method.
