The Pros and Cons of Gold Storage

So you’ve decided on going for owning your gold and silver outright. This is very common in precious metals trading, and done properly, it is a great way to make sure that your precious metals remain safe. That said, there are a number of considerations involved when talking about gold/silver storage, both positive and negative.

Why You Should– and Shouldn’t– Store Gold Locally

Storing gold as opposed to mining shares has a tangible advantage in that you know exactly what you have. If you choose to store it in a private vault or safety deposit box at the local bank, you also know where your gold is stored and have relatively easy access to it.

However, that access comes with a security trade-off: if you’re storing the gold at home, you will have to purchase a safe on site to ensure that the gold is accessible and provide it with some level of security. While banks have ample security, in case of a robbery, your safe deposit box is not FDIC insured.

Another disadvantage with storing your gold locally is that it will probably have to be assayed (appraised) if you decide to sell it. When this occurs, a dealer will charge a fee, so you will likely lose any advantage gained by not having to pay remote storage fees on a monthly or annual basis. Ultimately, the advantage of local storage must be weighed against the difficulty of liquidity.

Remote Gold Storage

Another option is vault storage, which has far higher security than the typical bank. This method has the advantage of far greater security and in most cases the gold is already assayed. This gives your gold investment better liquidity overall and makes for easier trading. That said, one has to check on the reputation of the vault, so it’s a good idea to talk to other investors when investigating this possibility.

The disadvantage of vault storage, of course, is that you lose nearby access to your precious metals, which in some ways is the very reason you went to direct precious metals purchasing to begin with. However, many find that they will have far less hassle by dealing with remote gold storage. Some storage facilities, however, also allow for precious metals trading, as well as acting as a gold depository.

In terms of a balance between access and liquidity, the best way to go is a combined trading platform and storage facility, giving you almost all the advantages of possession with none of the drawbacks.