Gold knowledge a gold buyer's checklist


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A nine-point checklist for secure gold investment LOOKING TO buy gold today? Here's a nine-point check-list for secure gold investment

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Gold knowledge a gold buyer's checklist

  1. 1. Gold Knowledge & Tips by Pierre A PienaarA Gold Buyers ChecklistA nine-point checklist for secure gold investment...Dear Reader,LOOKING TO buy gold today? Heres a nine-point check-list for secure gold investmentpresented by Investors Chronicle Gold Conference, hosted at the London StockExchange...#1. Dont take it home, except maybe a few coinsHistory is littered with sad stories of people who bought gold (rightly) because theyfeared severe economic contraction in their home country, and then made the mistake ofholding their gold at home. When they needed it they could not release its value becauseit had become contraband.Think of Zimbabwe (now), Argentina (2001), Yugoslavia (1990s), Vietnam & Cambodia(1970s), Nazi Germany (1930s), the USA (1933), Russia (1917). Gold secures yourwealth when it is held in a reliable country. This is unlikely to be your own country if youare wise to be buying gold.2. Buy Good Delivery fine bullion to save 6-10% over coins & small bars
  2. 2. The worlds best gold (assayed at 99.5% or better, and traded 100% fine – i.e. grossbar weight x assayed purity) has a rock-solid perpetual guarantee of its quality and is,surprisingly, also the cheapest. Good Delivery gold also sells for the highest prices.Thats because Good Delivery bullion is the spot market standard and is massively moreliquid than coin markets.3. Use allocated storage at a commercial vault – not a bankPersuading you to hold your gold unallocated lets banks finance their own liquidityreserve with your gold. It is so attractive to banks that they significantly overcharge forthe safer allocated storage option. So dont use banks to store gold. Instead, use fullyallocated and insured commercial vaults; they dont have a liquidity reserve requirement,and therefore have no motivation to overcharge for allocated.The wholesale storage rate (including insurance) is about 0.1% per annum in acommercial vault. It will usually be many times that much in a bank. BullionVaultcharges 0.12% per annum, with a minimum of $4 per month.4. Direct overseas ownershipDont get caught out by a trust deed or vault in the wrong jurisdiction. Thinkabout exchange controls. In a world of severe economic contraction, you would almostcertainly still be able to travel (if you can afford to buy the ticket), enabling you tophysically collect your gold and realize its value outside controls in your homejurisdiction. This is why direct overseas ownership often works better than ownershipthrough a trust. An intermediating trust deed could result in the ownership of goldeffectively being trapped in the country where the trust was set up.5. Avoid certification. Insist on regular publication of bar lists & reconciliationThere are two big problems with gold certificates. Firstly they convert your gold into asecurity, i.e. the certificate becomes the thing you own, not the gold itself, putting theissuer between you and the gold, which means the problems of trusts apply again. Goldis a tangible good, so it does not need the complexity of being wrapped as a security.You can own the stuff itself, and involve no-one else in your title.The second problem with certificates is that theres no way of knowing how manycertificates have been issued, which is a threat to your unique ownership. Moderntechnology can help here, by allowing you internet access to view the register of allowners. BullionVault is the only custody service in the world which publishes – everyday – bar lists reconciled to individual private holdings. You can see the public evidenceof your holding, reconciled to the current bar list; our central register defines who ownswhat, and eliminates the possibility of double counting. But however you choose to buygold, check your metal is separately identified on the reconciliation.6. Make sure ownership records are independently auditedYou want the auditor, and not the service provider, to vouch for how this thorough studyreconciles your ownership records with the physical property. See that the bullion ischecked and reported on annually by a qualified assayer.
  3. 3. 7. Consider your crisis responseCould you effect a rapid location switch and/or international shipment? Currency crisesblow up with alarming speed. Gold stored via a stock-exchange traded instrument (suchas a Gold ETF) is not particularly mobile. There will usually be only one vault in onejurisdiction storing all the gold. The problem is that trading out of that jurisdictionrequires a three-day stock exchange settlement period, after which your stockbroker willsend your money to you, probably incurring another few days delay.You may well be safer if you can either instantly sell your gold and buy in anotherphysical location, or ask for your gold to be shipped. Both of these are simpletransactions on BullionVault. The first you can do on-line. The second takes advantageof the fact that BullionVaults vault operator routinely transports bullion from oneinternational vault location to another. The shipment can be arranged without the bullionever leaving the control of the commercial vault operator, which makes it much easierand cheaper to set up – fast.8. Right to withdraw for personal possessionIf you choose the cost-savings, liquidity and security of using safe custody, you mustalso retain the right to withdraw your property in full. All BBullionVault customers havethe right to take possession of their gold. Each gram is physically present in the vault oftheir choice, available for withdrawal.9. Liquidity – look for 24/7 trading; dont rely on just one counterpartyGold is not like a stock-market share. Most stocks only move when their local market isopen. Gold moves all the time. Since price action occurs during Asian, European andAmerican market hours, you should be able to act when the price moves, too. So youneed a marketplace which stays open.BullionVault is currently the only gold market in the world which is open 24 hours a day,7 days a week. On BullionVault, users also quote their own prices. So there arethousands of counterparties free to quote to you, and to whom you can freely quote yourown price.One-counterparty systems, in contrast, force you to sell your gold back to the systemoperator. This eliminates competition and allows the provider to quote wide spreads.Whereas free competition on price massively reduces the cost of the spread.Paul Tustain,Settlement-systems specialist Paul Tustain launched BullionVault in 2005 to make thesecurity and cost-efficiencies of the professional wholesale gold market available toprivate investors. Designed specifically to meet his own needs as a risk-averse investor,BullionVaults online precious metals exchange is now the worlds largest provider ofphysical gold and silver ownership to private individuals.
  4. 4. Trade smart, not with Greed Pierre A PienaarPierre A Pienaar retired in 2011 from business.I would like to share my passion, my interests, knowledge & experiencesin Forex, Options, Gold Investments, Futures, Stocks, Binary Options, Economics,Stamp Collection, Sports, Gardening, Reading, Photography, and PoliticsResources for the Trader:FUTURES PRICESUpdated every 10 minutes around the clockJoin Timothy Evans on his journey as he navigates the financial markets in the search ofprofits. Timothy provides in depth market analysis as he cuts through market noise in hissearch for market opportunity. Receive the following with your subscription to In-The-Money, a trader’s journey to the land of profits:Subscribe hereYour Gateway to Global Options on Futures MarketsLong Leaf Xpress is well suited for the trader who wants quick execution on theelectronic markets. Traders have the ability to trade futures and options from a price
  5. 5. chart or an order ticket. Long Leaf Xpress also offers option chains, Depth of Market forfutures and options plus streaming real-time quotes and charts.Supported Instruments: Futures, Options on Futures.If you wish to have preferential treatment with your Futures Trading Account, pleasecontact Tony Klancic and refer to this report: Resources For The Independent TraderTradersVideoPlaybookUltimate Spot Gold Trading Business & Investing Book Market Timing Indicators +Platform Store Predictions for FreeUnique features such asInside Viewer™Trade Controller™ & VisualTrading Machine™Automated Trading Systems Today’s Top 50 Stocks list Today’s Top Preforming- A Turn-key, All-inclusive ETFsSolution for DevelopersTop 10 Penny Stocks Today’s Top Preforming Free Stock Trend Forex Pairs Analysis"Its Hands-Down The Think Global, Grow Rich: 7 6 Successful Trader ThingsEasiest Money You Can Principles for Building a In CommonMake From Wall Street" Global Portfolio Carl DelfeldSubstantial risk of lossThere is a substantial risk of loss of stocks, options, and foreign equities aresubstantial.You should therefore carefully consider whether such trading is suitable for youin light of your financial condition. You should read, understand, and considerthe Risk Disclosure Statement that is provided by your broker before youconsider trading.