Trade Bullion: A New Choice For Gold Bullion & Gold Commodity Trading

29th October, 2009

Up until recently the opportunity to trade bullion was relatively limited. Traders and investors that had a view on the gold market and wanted exposure to the underlying movements in the gold price had to consider futures. Futures are the highly leveraged alternative for gold commodity trading because you are required to post margin upfront. Margin requirements are set by the exchange and are altered periodically according to the prevailing market volatility. This is fine for some participants but for some investors it acted as a barrier to entry because you need to have an approved futures account and must watch the position constantly in order to manage your exposure. As such, the gold futures market tends to be frequented by the larger market participants and highly sophisticated private players who can watch and manage the position accordingly.

New Developments For Bullion Gold Trading

For the retail operator, small private investor or even sophisticated larger volume traders a new financial innovation to trade bullion has emerged. It is not as highly leveraged as futures which suites some traders and investors much better. This gold market trading mechanism permits you to trade gold bullion online but you take an immediate allocation of gold. The gold remains within the vaulting circuit under your entitlement. You pay a storage fee for the privilege but you are fully insured and protected from operator risk and systemic risk under “bailment” laws. So you get the best of both worlds. You can purchase gold bullion online with the intention to hold for either long or short periods of time. There is no margin involved so your position is exposed to gold price movements but not leveraged the same way a futures position would be.

Why Purchase Gold Bullion Online?

If you choose to make a bullion gold purchase online then you have immediate access to your account once it is set up. You can trade bullion 24/7 and have the choice of using different currencies, namely the UK Pound, US Dollar and the Euro. Currency flexibility is important to some people who may be located in a foreign country. Furthermore, you also have a choice of vaulting locations. You can choose from London, New York or Zurich. Each location is protected by a different jurisdiction so you have full control over where your gold is stored and can switch between vaulting locations at the click of a button. If you decide that you want to remove the gold from storage and take physical possession this can be arranged but you need to keep in mind that once it leaves the vaulting circuit you will need to subject the gold to quality and purity tests before it can be resold.

Tools For The Gold Bullion Trader

If you plan to trade bullion then having access to quality tools can help you make a more informed decision. Charting capability, market depth and the market order board provide timely information for traders and investors to execute the transaction. The new online operators build this capability into the interface and the one click wizard style interface makes it a simple and effective way to trade.

More Articles on bullion gold trading and Gold Commodity Trading

An Overview on Gold Bullion Investing
Gold Storage Facilities: How to Safely Store Your Gold

Gold Bullion ETF’s V Gold Bullion Storage: How Safe Is Your Gold?

The gold bullion market became very difficult for investors and traders to access during the years when the gold price slid down to $260 an ounce. The investment market literally dried up as demand dwindled and dealing costs accelerated. The emergence of gold bullion ETF’s and commercial gold bullion storage programs has opened up the range of choices available to both the retail and institutional investor. Some important points for consideration follow.

One of the fundamental constraints that worked against new gold bullion investment buyers was the availability of the gold bullion good delivery bar. Professional buyers don’t accept any other bars as adequate delivery by a seller for a spot market gold trade. These bars are 400 oz each and must be kept continuously in an accredited storage vault to retain their integrity. Due to the fact that gold vault operators operate a cautious business, this acted as a barrier to entry for both the institutional and private buyer. Investors who choose to take delivery of good delivery bars face an immediate loss of integrity once they leave the vaulting circuit. [1] For this reason, it is essential to consider the cost of re-establishing bar purity and the associated delay which acts as a significant selling impediment. Gold bullion ETF’s and gold bullion storage programs offer a convenient alternative to holding physical bullion, each with a slightly different structure and advantages.

Gold bullion ETF’s are gold denominated debt securities that are required by trust deed to back the securities by gold assets. Usually this is in the form of vaulted good delivery bars but may also include other gold assets in a temporary form that will most likely be converted to physical good delivery gold bars in due course. ETF’s generally hold their gold in London in unspecified bullion vaults. A US example of this is the Streettracks Gold Bullion ETF (GLD). The SPDR Gold Trust ETF’s is structured as one-tenth of a troy ounce of gold and held by the custodian (HSBC) in London. The gold weight of each of these units steadily declines over time due to the fact that a daily management charge occurs. Of further significance is the legal ownership of the gold. With a gold bullion ETF the trust owns the gold and you are a beneficiary of the debt owned by the trust and backed by its gold. Your exposure is therefore to the storage location in London and also the state trust deed laws, under whose laws the ETF trust deed was drawn up.

In contrast, the newer online gold bullion storage programs actually revolutionize gold bullion trading and investing. When you initiate a transaction through a gold bullion storage program you actually own the gold and it is protected under the property laws in the jurisdiction in which your gold is held. Your property right is not diminished by the safekeeping of a custodian or trust deed. To provide flexibility and to accommodate changes which may occur in national laws, you have the choice of storing your gold in Switzerland, the UK or the US. This results in your gold being held exclusively under your chosen jurisdiction of choice.

Currency Flexibility

The GLD Gold Bullion ETF trades in US dollars on the US exchange. Gold bullion ETF’s that trade on other worldwide exchanges also trade in their respective currencies. This is convenient for residents transacting in their respective location as they are not confronted with paying currency conversion fees if they deal purely in the accepted currency. For international traders and investors who want to trade GLD it is a different story. Dealing in another currency can add a significant cost to your transaction if you hold your account value in any other denomination. Currency conversion takes place at the firm’s standard rate which is frequently 3% or more in currency transaction spreads. A gold bullion storage program overcomes this problem by trading directly in US dollars, Euros or Pounds. Traders and investors do not encounter currency conversion costs since they deal directly with other traders trading gold in the same currency.

Gold Storage Cost Considerations

ETF’s are slightly cheaper up until $12,000 due to the minimum storage charge levied by gold bullion storage programs. If you are transacting above $40,000 then the storage and insurance can be less than 1/3 of the cost of storage and insurance within an ETF. Furthermore, with some ETF’s, your gold may or may not be insured depending on the ETF provider.

Market Risk

In the GLD SPDR Gold Trust prospectus, the trust can liquidate if there is less than $350 million in the trust, if the NAV (net asset value) drops below $50 million or by an agreement from the shareholders owning at least 66.6% of the outstanding shares. Granted this would be a remote possibility, it is still a risk that remains open and one that online Gold bullion storage purchasers don’t have to contend with.[2]

So Which One Is Better?

Gold bullion storage programs are the clear winner for legal safety due to the fact that your gold is considered your property right from the outset and you are not subject to any liquidation provisions. You also have the added versatility of jurisdictional control. If you are not concerned about risk and primarily concerned about transaction cost then the answer is a little more complex. It can depend on transaction size, currency conversion costs, dealing spreads/commissions and market developments [3]. ETF’s do offer the convenience of being a growing asset class and are now part of many broker platforms. This can provide easy access for residents who do not have to contend with high cost considerations and are transacting in small amounts over a shorter time frame. For some professional funds, the mandate requires that the fund purchase structured securities traded on a formal stock exchange and for this purpose ETF’s fulfill a very useful role.

Learn more about a gold storage program that can allow you to earn the spread and cut your gold dealing costs simply and safely.

References

[1] Gold ETF

[2] The Gold Showdown: ETFs Versus Futures

[3] BullionVault vs Gold ETFs

Buy Australian Mint Coins Produced by the Perth Mint. Select From A Range of Australian Gold Bullion Coins that Cater to Collectors and Investors

Australian mint gold coins are crafted from proof grade gold bullion and are universally recognized throughout the coin world. In Australia, one of the most prolific manufacturers of Australian mint coins is the Perth Mint. Originally established as a branch of the Royal London Mint, this organization now operates under the umbrella of the Western Australia government and produces an extensive range of theme based, commemorative and collector’s coins. Perth Mint gold coins are represented by the mintmark ‘P’ which is etched into the obverse of the coin.

Theme based Australian gold bullion coins celebrate unique cultural and iconic aspects of Australian lifestyle and heritage. One of the most popular coin series is the Discover Australia coin program which features indigenous designer Darryl Bellotti’s unique interpretation of 15 different Australian animals. As home to some of the most beautiful wildlife in the world, foreign guests are always keen to see animals they have heard about but never seen. This coin series pays tribute to these animals and celebrates Australia’s best known marsupial through the DA Dreaming Kangaroo gold coin and the DA Dreaming Echidna gold coin, an Australian monotreme.

Australian mint coins also have something to offer the collector. Individuals that are passionate about collecting sporting or historical memorabilia will find that Perth Mint Gold coins cover a range of famous people. An example of this is the Sir Edmund Hillary Gold Coin. Who can forget the first man to reach the summit of Mount Everest. This coin pays tribute to the man by inscribing the coin with the words “A Lifetime of Achievement”. Royalty fans will also find the HM Queen Elizabeth II Diamond Wedding Anniversary coin to be particularly appealing. The coins reverse displays an official colour photograph of the royal couple with a stylized representation of a cut diamond. Both of these coins are issued in limited quantity and come with a numbered certificate of authenticity. Coins such as these can become valuable over time when the official release sells out and a secondary market develops.

Australian mint gold coins also cater to the serious investor. One of the most universally recognized gold coins in the world is the Gold Sovereign. The Perth Mint produces its very own version; derived from the original mandate established by the Royal London Mint. The Australian Gold Sovereign is struck from 91.67% pure 22K gold in proof quality. Gold coins are the perfect vehicle for investors who want to acquire some gold as a safe haven, inflation or crisis hedge. Coins are easy to transport and store provided you don’t acquire them in large quantity. Australian gold coins also face minimal restrictions for transport in and out of the country and are considered legal tender under the Australian Currency Act of 1965.

An overview on gold bullion investing

23rd October, 2009

Gold has moved into the limelight since it broke out of its sideways range and surpassed the $1000 mark. The resulting media attention has prompted many people to question why gold is going up and to consider the gold investing alternatives. Current US monetary policy is clearly between a rock and a hard place. Capital inflows are needed to service debt requirements but the US economy remains inundated with problems. US interest rates remain stuck at low levels offering little incentive other than funding more attractive carry trade opportunities.[1] Foreign nations and creditors are increasingly concerned about the US dollar predicament. Treasury purchasers display a clear and evident trend of continual decline and a shifting of priority to shorter dated securities. US monetization (blatant money printing) is necessary to take up the shortfall. Gold is being moved from western holding centers and new gold trading hubs are beginning to emerge.[2] A greater role for the BRIC’s and diminishing western control is becoming a dominant theme. China is encouraging citizens to purchase gold and establishing Yuan swap lines with prominent trading partners who can supply China’s voracious appetite for resources. The IMF is coming into focus with SDR’s and China is pushing for a greater share of the voting rights.[3]

Gold has been going up. It has been going up because the old monetary order is in disarray and demand is increasing as more countries diversify out of the US dollar. Inflation is also a concern due to massive government stimulus measures and the uncertainty of a viable exit strategy. US currency devaluation is visible in plain daylight. Even central banks are diversifying out of the dollar [4] and becoming net buyers of gold.[5] US leaders face a difficult challenge to deal with the economic problems and prevailing pressure on the dollar. The geopolitical stage is being transformed as countries seek to protect their interests. US and UK leaders are operating with the burden of massive debt. Foreign nations are emerging with new alliances and initiatives and there is talk of the need for a new alternative reserve currency.[6] Gold is now a more attractive investment proposition with mint periodic supply shortfalls providing additional supporting evidence of underlying demand.

Determine your gold bullion investment objectives

At the forefront of any gold investment consideration is the need to determine your objectives. How long do you plan to hold the gold and how often do you want to either accumulate further reserves or trade on a short term basis? Gold bullion investment options range from the physical possession of gold bullion ingots, the outright purchase of gold bullion coins, to trading or positioning in futures or gold based securities. Each has its advantages and disadvantages.

Is physical gold bullion ownership important?

If you desire to hold physical possession of the gold then you can own gold bullion through either Australian gold proof sovereigns, mint gold coins or bullion bars. These are readily available via the mints and any authorized dealer network. If you plan on holding larger quantities of gold then you will need to consider your desired level of flexibility including how often you want to buy and sell, the transaction size and whether you have the capacity to store and transport the gold. Keep in mind that once the gold leaves the vaulting circuit you will face quality and purity tests if you decide to sell. This can delay the sale and adds to your transaction costs. These factors are covered in another article that deals with gold storage.

Leverage your gold bullion investing

Futures for gold offer tremendous potential for individuals who can handle the leverage but require a greater degree of control and understanding to participate. You also need to accept that futures exchanges are only open for certain periods of time and may be located outside your resident country. If you know the risks and understand derivatives then futures are ideal for short term moves or for individuals who want to establish a position and manage the move. This is a sophisticated option and not suitable for the average investor.

A new breed of security for investing in gold bullion

Exchange traded funds are a relatively new form of security gaining momentum as a gold bullion investment vehicle. The leading ETF’s buy gold to own it outright and the gold is held in trust. You are essentially purchasing an underlying interest in the physical product. Gold investing ETF’s are trading on many leading exchanges including the USA, UK, Canada, Indian and the Australian markets. You can buy and sell ETF’s the same way you buy and sell shares online or through your service broker. Your exposure is to the movements of gold ETF securities in response to the underlying movements in the price of gold. They are great for short term trading. One drawback of these vehicles is the fact that ETF fund administrative expenses are deducted from the physical gold backing each share. The entitlement on your share certificate remains that same but is subject to this gradual shrinkage that occurs. ETF’s may also be treated differently for taxation purposes requiring consultation with your respective tax jurisdiction if you are considering a longer term holding.

Do gold stocks hold your interest?

Gold stocks trade on worldwide exchanges and offer the potential to appreciate. They are, however, subject to equity market movements and any number of factors that can influence the management or operations of the company. For this reason gold mining shares tend to be considered speculative and require a higher degree of expertise to select and manage. If you are looking for the purest way to gain exposure to price movements in gold bullion they are not the best option.

An online alternative emerges for gold bullion investing

Cost savings provided by the internet now allow the gold bullion investor the opportunity to purchase gold bullion outright in your name with greater convenience, security and flexibility. The gold can also be stored in a choice of three different locations (London, New York or Zurich) and transacted in three different currencies. The ability to transact is available 24/7 via the online interface. Storage costs are minimal and your gold is fully insured. Gold bullion ingot delivery can also be arranged if you desire to leave the vaulting circuit as can telephone transaction capability. The advantage of leaving your gold in your chosen vault location is that it is secure and available for sale at the click of a mouse button.

Review the articles on this site for more information on gold bullion investing alternatives.

Gold Storage Facilities: How to Safely Store Your Gold
Trade Bullion: A New Choice For Gold Bullion & Gold Commodity Trading
Gold vs Inflation: A Historical Perspective and The Current environment For Gold And Inflation

References
1. U.S. Dollar Attacked by Central Bank Lilliputians Profiting From the Carry Trade

[2] Hong Kong recalls gold reserves, touts high-security vault

[3]Proceeds of yuan bond sale triple offer

[4] Dollar loses reserve status to yen & euro

[5] Central banks seen becoming net gold buyers-expert

[6] UN Says New Currency Is Needed to Fix Broken ‘Confidence Game’

Australian gold bullion and the origin of the Perth Mint Australian gold sovereign

Australia is a commodity driven economy that exports a high quantity of gold. In fact, gold ranks fourth behind coal, iron ore and petroleum based products. The Australian gold rush of the nineteenth century was a defining moment in Australian history that helped to boost the economy and shape the development of the nation. It began in a waterhole near Bathurst, NSW in 1851, where gold deposits were first discovered. The Colonial authorities responded by instituting ‘Commissioners of Land’ to regulate and to collect license fees for each claim. Gold fever quickly gained momentum and spread to neighboring Australian states. Word traveled quickly of gold discoveries and the inflow of immigrants to Australia was significant. During the 1850’s, Australian gold bullion accounted for 1/3 of the world’s total gold output with a significant portion of the gold shipped offshore.[1]

Australian Gold Bullion Used to Mint Gold Sovereigns

The Perth Mint was founded in 1899 as a branch of Britain’s Royal Mint.[2] Previously, Australian gold bullion was exported to London where it was transformed into gold sovereigns and half sovereigns for circulation as coins. The establishment of Royal Mint branch units throughout Australian states where gold was located was designed to circumvent the need to ship the gold to London and redistribute the coins back to the colonies. Gold mined from Kalgoorlie and Coolgardie found its way to the mint where it was turned into gold sovereigns. Each mint throughout Australia has a recognized ‘mintmark’ symbol of authority; today the ‘P’ on the Perth Mint Australian gold sovereign is a defining mark that is universally recognized throughout the world.

The Evolution of Australian Gold Bullion Coins

As the Perth Mint evolved its operations changed in line with the times. When sovereigns were withdrawn in 1931, the mint transformed into the production of other Australian gold bullion coins. The ownership of the mint passed from British ownership in 1970 to the Western Australian Government who retains control today. The Gold Corporations Act of 1987 established the mandate for Gold Corporation which owns and operates the Perth Mint today. The Western Australia gold fields are a major source of Australian gold and the Perth Mint, through its 40% interest in AGR Matthey, refines the majority of this mine output averaging over 400 tonnes of gold annually. The derived gold and silver output from the BHP Olympic Dam mine finds its way to the mints refineries for coin and bar manufacture.[3]

Buy Australian Gold Bullion – It’s Universally Recognized!

Today, the Perth Mint transforms Australian gold bullion into an extensive range of Australian gold bullion coins, silver bullion coins, Commemorative Australian coins and numismatic coins. It is also exports precious metal blanks to other mints. The Australian Gold Sovereign it manufactures is considered legal tender under the Australian Currency Act of 1965. Struck from 91.67% pure 22K gold in proof quality, the Australian gold sovereign coin is universally recognized as a subset of what is arguably the most famous gold coin in the world. This makes it a natural choice for collectors and investors who buy the Australian gold sovereign for its store of universal value, role as legal tender and easy convertibility to cash.

[1] The Australian Gold Rush
[2] The Perth Mint – More than a century in precious metals
[3] BHP continues Mining at Olympic Dam

Gold is one of the main commodity exports of Australia. In fact, gold ranks number four [1] behind coal, iron ore and crude petroleum as a primary export. The main markets for Australian gold are India, Thailand, UK, Korea and Singapore. As a major commodity, this sets the scene for gold exploration in Australia. Australian gold companies are active in prospecting and production and the major player’s trade actively on the Australian Stock Exchange. Gold stocks in Australia can be divided up into major players and junior miners. The major players have established production facilities and are active in further gold prospecting. The junior Australian gold stocks are often speculative in nature and primarily focus on prospecting.

Want to play the gold price directly?
Find out more..

The All Ordinaries Gold Index is the Australian benchmark gold Index. It is comprised of the major Australian gold mining companies. In terms of market capitalization, the top five Australian gold mining stocks are: Newmont Mining Limited, Newcrest Mining Limited, AngloGold Ashanti Limited, Sino Gold Mining Ltd and Centamin Egypt Ltd. The ratio of gold composition for ASX companies above the $10 million threshold is made up of 30% producers, 20% developers and 50% explorers. This is for companies with a market capitalization above $10 million and who operate predominantly in gold mining related activities. [2]

There are many speculative gold stocks in Australia who are focused on prospecting and developing activities. In fact, 70% of Australian gold mining stocks are considered junior explorers. New floats for gold prospecting companies tend to rise considerably in line with rises in the gold price. Likewise, when the price of gold goes down there is less profit potential for new discoveries and the rate of new floats tends to diminish. Overseas investors and traders who are interested in the Australian gold sector can investigate the opportunity offered by this sector further. With the current pressure on the US dollar and inflation expectations, this bodes favorably for Australian gold stocks. Since the US dollar and gold are inversely correlated, when the US dollar declines, gold tends to go up which is theoretically good for Australian gold mining stocks.

How can you find out more about Australian Gold Stocks?

The Gold Index symbol is XGD. If you want to learn more about its constituents you can go to the Standard and Poor’s website [3] and review the index components. An index can change according to the market capitalization of companies so this is the best approach. Once you know the symbols you can further review company information by entering the symbol code into the ASX website or by reviewing the company information on fiancé portal sites such as Yahoo Finance.

References:

[1] Parliament of Australia: Parliamentary Library

[2] Goldnerds – The Australian Gold Sector in brief

[3] Standard and Poors – Index Composition

Investing in junior gold stocks is one way to gain speculative exposure to any potential rise in the price of gold. There are many junior companies traded on various exchangers around the world. The US, Canadian and Australian stock exchanges have many small cap gold stocks that have the potential for large appreciation gains. Gold exploration takes capital expenditure in order to prospect for proven reserves. There are many more junior gold stock companies that do not have proven reserves and that will require capital to finance their activities than good companies that have a solid chance for success. If you are going to reap a return on your investment then you will need to have the ability to develop a successful approach to picking stocks that have a high probability of making a return. Locating companies that have the potential to become gold producing stocks is ultimately your aim.

How to locate Junior mining gold stocks for suitable gold stock investing

One of the best ways to get ground floor insight into good potential candidates is to subscribe to a newsletter that focuses on gold sector stocks. These publications tend to be geographically specific and are specialists for a particular region. The advantage of these publications is that you get the benefit of industry experience from professionals who spend their time investigating gold mining stocks. These services often rates stocks according to their speculative risk and some offer trial periods.

Want a better way to buy/sell gold?
Click here to learn more…

Screen for your own Junior gold stock candidates

If you are the diligent research type you can locate a stock screening website and screen for specific candidates. Junior gold stocks tend to have a lower market capitalization than gold producer stocks. An example of a screening site is stockfetcher.com. You can locate the gold mining industry under the screen interface to review charts on gold mining shares. If you like to apply technical filters this site and a myriad of other sites provides the capability for you to review different indicator combinations.

Conduct additional research on gold companies stocks

If you like to perform fundamental forensics then a review of a companies financials is always a prudent move before committing to the investment. You can often locate the most recent news releases and reports at either the stock exchange where the company is listed or by doing a search for the listed companies website. If you are not experienced at conducting this type of research then review this article [1] for some great insight on the types of questions you should be asking before you commit your funds.

Claim your free gram of gold – Learn how to invest in gold bullion safely and securely.

References:

[1] Daily Reckoning: Junior Gold Stock

From a general standpoint of reference, gold prices and inflation is something that many investors consider when making portfolio decisions. The historical relationship of gold and inflation holds up from a general contextual point of view but is complicated by factors that remove the purity of the relationship. For this reason an investor needs to exercise discernment for investment timing decisions.

During times of uncertainty and panic gold does tend to appreciate when fear grips the marketplace because control mechanisms are unable to counteract short term emotional swings. Over the longer term there are many competing variables that further muddy the gold prices and inflation equation.  One of the major forces that is difficult to factor is the actions of central banks, governments and large institutions who hold reserves of gold. These institutions tend to hold massive reserves and if they decide to sell a portion of these reserves it can place downward pressure on the gold markets. Even during difficult times, a large quantity of gold hitting the marketplace at any one particular time can suppress gold prices. A good example of this is the selling that took place recently to fund central bank actions, bailouts and the offsetting transaction that occurred when Lehman Brothers was absorbed.

Gold Prices and Inflation

Many of the world’s hedge funds relied to a certain extent on the structural advantages of the carry trade to borrow at low interest rates and invest in higher yielding opportunities such as commodities. The subsequent actions of central banks whereby interest rates were lowered, a liquidity imitative, when in fact it is a solvency issue, resulted in an interest rate convergence that negated the advantages provided by enacted carry trade transactions. The selling that followed and the policies of Wall Street of credit denial to many hedge funds, and the release of oil from the strategic petroleum reserve prompted an unwinding of positions in order to free up available funds to meet operational and margin requirements. Situations such as this can impact gold prices tremendously when liquidation takes place.

Current economic policies also have an effect on the price of gold and inflation. The present policies in the US, and many western governments of low interest rates and money printing in response to the economic crisis have many people concerned about the future implications for gold value and inflation. With global macroeconomic events favoring investments in commodities, led primarily by the perceived Chinese demand, there is concern that rising prices and the devaluation of the US dollar in response to monetization polices provides a favorable environment for gold investing. Whilst there are deflationary forces to contend with, structural considerations, the usual shadow shenanigans, and the Bretton Woods issues, how well and to what degree money velocity can be limited is something for gold investors and traders to think about.

Claim your free gram of gold – Learn how to invest in gold bullion safely and securely.

References
[1] Gold is a “crisis hedge” not an inflation hedge

Investing in gold coins provides a way for investors and collectors to purchase assets that they believe will appreciate in the future. Coins of limited mintage or that are rare can represent a great long term investment. A specialized gold coin dealer can help you to buy and sell gold coins. Mints also create limited edition coins that are suitable for gold coin investing. Gold collector’s coins require specialized expertise which is usually outside the realm of expertise of most investors.

Investing In Gold Coins

Some people purchase gold coins for safe haven purposes. The current economic environment whereby central banks are printing up vast sums of money to support a system crippled by solvency issues has many people concerned that hyperinflation is a potential reality. Indeed, for countries such as the US, monetizing existing debt is increasingly likely due to foreign aversion to US bonds. As an investor, protecting your wealth is a priority. Gold coins that will appreciate in value if inflation becomes a serious consideration is a prudent investment. Investing in gold and silver coins, kruggerand coins, American eagles, American Buffalo gold bullion coins or proofs and Canadian maple leaf coins are all investment alternatives for serious bulllion investors.

View the Gold Coin Gallery

When purchased in small quantities, bullion coins can be stored in a personal safe. The advantage of investing in gold coins is that they are relatively easy to convert to currency. In fact, some coins are authorized legal tender. If you need to buy and sell coins at short notice you can do so via dealer networks or mints that specialize in gold coins investment and related activity. Some metal refiners will also purchase gold coins at prevailing market rates. Sovereigns and Kruggerands are generally easy to liquidate than investments in larger gold bars or ingots which generally need a specialized dealer to find an appropriate buyer. These coins are ideal for investors who want to keep the coins on hand but want an investment that can be liquidated quickly.

Investing In Gold Coins

The US Mint, Canadian Royal Mint and Perth Mint in Australia have different gold coins investment programs that are suitable for making appropriate country specific investments. If you are looking to purchase larger quantities of coins then it might be prudent to consider your storage options. The Canadian Mint has a storage program as does the Perth Mint in Australia. One of the advantages of the Perth mint is that it offers programs that are government guaranteed. This guarantee is the only one available in the world. Clients can purchase physical investment grade coins from the mint. These coins are then removed from the Mint’s inventory and placed in the Mint depository. You need to be aware that you will pay storage costs for this privilege. The Mint provides a full sovereign guarantee by the government of Western Australia, so if you are concerned about your investment protection, then the Perth Mint is definitely worth consideration.

View the Perth Mint Gold Coin Gallery

Gold storage facilities are a safe and secure way to store your gold bullion holdings.
For small quantities of gold a home safe can suffice but taking delivery of larger quantities necessitates the need to organize transport, safe gold storage and insurance. If you are a serious gold bullion investor then you will need something a little more substantial than just a home safe. So what are the options? Gold vault storage facilities are commercial enterprises or, in some cases, mint gold storage programs are offered as a separate division of a mint whereby the gold ingots are stored on premises on your behalf.

Gold Storage Facilities

Mint Programs are safe but do they provide the flexibility you need?

If you opt to use a mint program for the storage of gold you will need to setup an account through an authorized dealer network. Whilst the services that are offered are often adequate for long term investors who want to store the gold securely, for individuals that want to execute numerous transactions to build their gold holdings or to sell on a short term basis, the process can be cumbersome and time consuming. You may face entry and exit fees into the program or be subject to wider bid/ask spreads when you buy and sell. This may be factored into your cost structure if you are a long term investor who is willing to absorb these costs and you do not want to regularly add to holdings or buy/sell on a short term basis. If you fit this profile then contacting your local mint is a perfectly acceptable way to go and the security in place is more than adequate for safe gold storage.

Logistic Costs and Quality Considerations

If, however, you plan to purchase a large quantity of gold and to take delivery outside of a commercial based program there are separate gold storage issues you may need to consider. Firstly, you will need to organize secure transport to take delivery and relocate the gold to your chosen premises. This will most likely involve organizing an armored vehicle and security personnel. Secondly, if you ever plan to sell the gold again you may need to subject the gold to a commercial grade verification process to test the gold for authenticity and purity. Bank gold vault storage costs will also need to be factored into your transaction if you use a commercial grade bank to safely store your gold.

Due diligence and Gold Storage Facility Risk

Of paramount importance to your gold storage is the legal structure and obligations you are subject to. Under some storage arrangements, the institution that you entrust the gold to is actually considered the physical owner of the gold. Should this institution experience a disruption to business or collapse due to systemic risks, you may find that the gold becomes the property of creditors before your entitlement. Some of the newer online operators actually have the legal structure in place to ensure that should their operations fail your gold still belongs to you. This is known under English law as “bailment”. It is important that you conduct due diligence on the operator so that you know your rights and obligations regarding your gold ownership before engaging any transaction.

Safe & Easy Online Gold storage programs

Online gold bullion operators now revolutionize the way to buy and sell gold bullion.
The ability to buy and sell gold bullion at the click of a mouse provides speed, flexibility and versatility. The newer online operators actually compete with the trader by providing the ability for all traders to quote the best buying and selling prices. This introduces competition which narrows the bid/offer spreads and saves you money on your gold transactions. Furthermore, you may also have the option to transact in multiple currencies (US Dollar, Pound, Euro) with a choice of different storage locations (New York, Zurich, London) with adequate insurance protection in place and a legal structure (choice of jurisdiction) that ensures that your gold remains your property and is protected under law. If you prefer to have maximum safety and protection for your gold with a high degree of transaction flexibility then buying gold bullion online can be a convenient way to go.