Gold is one of the primary investment choices for many investors, and not just in times of economic or political crisis.
Gold coins and bars in particular are used to secure asset values, protect against rampant inflation, and to create a diverse investment portfolio. However, whichever option you choose, there is still the question of suitable gold storage arrangements. For many investors, the major aspects they will wish to consider are likely to be one or more of the following parameters:
- Security
- Access
- Cost
- Discretion
- Flexibility
Below, we analyse the four most popular ways to store gold to check whether there is a clear favourite:
Storing gold at home
A surprising number of investors still store their gold holdings at home. The main motive here is likely to be the need to always have your gold assets close at hand. This means your gold can not only be sold on quickly, but that this can also be done quite discreetly. Storing gold in some hiding place at home also incurs virtually no cost. However, this convenience quite clearly comes at the expense of security, which is, of course, a real problem. Burglars are usually pretty good at finding the hiding places where valuables are stowed away in record time. Installing a professional security system incorporating a secure safe and an alarm system would undoubtedly help. But in general this option is more likely to appeal to homeowners rather than tenants. In addition, a comprehensive system offering an appropriately high level of security will quickly drive up your costs. There can also be flexibility issues if you reach a point where your needs exceed your current storage capacity and you then have to think about installing a larger safe, or adding a second one.
Storing gold at your local bank
Why not store your gold in a safe deposit box at your local bank? This is usually within easy reach of your home. However, a bank insolvency or special government measures (e.g. caused by a coronavirus pandemic) could potentially mean your access to safe deposit box contents or stored precious metal holdings might be restricted for some considerable time. There are usually annual charges for safe deposit box rentals, but these are usually moderate. The level of security most banks can offer is probably higher than the protection afforded when you store such contents in your own home. However, for many banks, safe deposit box storage is no longer part of their core business. This can mean their security architecture, and thus the practical level of protection they can offer, is not up to modern security standards. The choice of safe deposits in different sizes is also very limited, especially in smaller bank branches. Furthermore, the discretion afforded is generally less than optimal. In the EU, for instance, banks are required to report all newly opened safe deposit facilities to the Ministry of Finance (for listing in a safe deposit box register). In certain circumstances, the contents of a safe deposit box may be subject to official inspection with additional powers to access the contents where necessary.
Storing gold at a Swiss bank
For many investors, Switzerland is the epitome of security and discretion. This Alpine republic is a model of economic and political stability, and guaranteed property rights have traditionally been very important to the Swiss. It might therefore be a good idea for investors to store their own gold in a safe deposit box at a Swiss bank. In practice, many Swiss banks can offer a high standard of security. So if you wish to store your gold safely, you will definitely find a suitable bank in Switzerland. For many investors, a journey to the Alpine republic will be less convenient than visiting their own local bank. However, many suitable Swiss credit institutions are still easily accessible by car, train or plane. In addition, many bank providers can offer some flexibility when it comes to safe deposit box capacities. Unfortunately, such services are not cheap. Foreign customers in particular will have to pay high rents for safe deposit boxes at many Swiss banks. Furthermore, they may sometimes have to deposit additional funds in a bank account – which will then incur additional fees. Note too that, unlike banks in other countries, Swiss banks cannot provide insurance cover. This is simply a service they do not offer. Nonetheless, Swiss bankers are considered discreet, and the Alpine republic is neither part of the European Union nor a member of the European Economic Area. As such, Swiss institutions are thus not bound by the reporting and transparency guidelines adopted by the EU and other jurisdictions in recent years. However, opening a bank account is always a necessary prerequisite for arranging a safe deposit box rental. This inevitably means the bank must gather customer data, and must in turn report this information to the authorities as part of the account retrieval process. As a direct consequence, discretion is not particularly good in practice.
Storing gold securely with a specialist Swiss storage provider
A safe deposit box in Switzerland is likely to be a good place to store gold. However, banks are not necessarily an optimal location for many investors. A better solution could be the safe deposit box facilities provided by specialist Swiss storage providers. Anyone wishing to store their gold via this option can benefit from numerous advantages. These include an extremely high standard of security, which means investors can safely store valuable precious metals such as gold. In addition to special robust safes protected by the latest alarm technology, additional dedicated security personnel are often deployed on-site. Many facilities can be reached via Switzerland’s excellent infrastructure – even from other European countries. There are inevitable costs associated with renting a safe deposit box. However, when you factor in the additional compulsory expense of opening a bank account, the charges are generally more affordable than renting a safe deposit from a Swiss bank. Many specialist providers include basic insurance coverage free of charge when renting a safe deposit box. And when required, it is usually possible to arrange comprehensive insurance cover for amounts exceeding the basic sum insured available under the free standard cover. Achieving, and maintaining a comparable level of security at home would usually be significantly more expensive and would require ongoing investment. Leading Swiss storage providers also score extra points when it comes to flexibility. Here, customers can often choose between a range of safe deposit boxes in different sizes, and can also opt for either individual storage or collective storage. In some cases it is even possible to store goods in a duty-free warehouse. This option can be particularly attractive for investors who want to store precious metals such as silver alongside their gold investments. The particular advantage here is that precious metals like silver (and other ‘white’ metals) can be purchased ex-VAT when stored in a Swiss duty-free warehouse.
Conclusion: When storing gold, there is a clear favourite
Taking each of the above options into account, investors who want to store their gold safely and benefit from additional advantages should arrange to do so with a specialist storage company in Switzerland. Customers benefit from an exceptionally high level of security, greater flexibility and more discretion – and all at a comparatively moderate cost. Furthermore, by carefully choosing a facility with good infrastructure connections, investors can also ensure they achieve access arrangements to meet their needs. However, it is always wise to carefully select a really suitable storage company. Interested investors should look for a reputable provider who can offer a comprehensive insurance cover – ideally, one that covers natural hazards as well as robbery, theft and fraud. A provider with a long-term, claim-free record who can also offer additional insurance cover would be particularly recommended. Adopting the strategy proposed here, you will not only be able to store your gold safely, but also look forward to future developments in the world and its economy with relative calm.