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The global economy is in the throes of uncertainty and volatility. Given this current state of turmoil, many savvy investors turn to gold as a hedge against this economic turmoil. The glittering precious metal is definitely viewed as a good investment choice for a small percentage of a diversified portfolio. Yet, the question that arises, is where is the best place to keep your gold investment safe. In this article, we’ll discuss the pros and cons of storing your gold at home, versus paying for storage at a third-party vault.
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What The Experts Have To Say
Less Expensive To Store Gold At Home And Is Easily Accessible, But Reputable Third-Party Storage Facilities Are Specifically Designed To Protect Precious Metals
1) It's less expensive to store gold at home. Depending on how much you have shipping and insurance costs can become excessive.
2) If you're considering offshore gold storage it really doesn't make sense financially unless you have over a million dollars worth due to costs of shipping and insurance.
3) Gold is easily accessible if you have it stored in your home should you require it immediately in an emergency situation.
1) A reputable third-party storage facility is specifically designed to protect precious metals. A home is not.
2) Your gold is far better protected in a third-party storage facility than in a residential home from a number of threats such as burglary, fire, or natural disaster.
Additionally, gold should not account for a large portion of an investment portfolio. 10 percent as a hedge is its ideal ceiling.”
Simon Nowak, CEO, 3CreditScores.net
Easy Access, It’s Cheap, But Low Security And An appraisal Will Be Required During Selling
“Storing gold at home is good due to these reasons:
Easy access – When you have your gold at home, it’s practically easier to
access it at any time you want to.
It’s cheap – It costs relatively low to have your gold secured at your home.
Here are the cons of storing gold at home:
Low security – It becomes hard to provide enough security for your gold at home hence, putting it at risk of theft.
An appraisal will be required during selling – When it’s time to sell your gold, it will have to be assayed. This would, in turn, trigger extra charges.
Storing gold at a third-party vault is the other option and perhaps, the safest. Below are some of the advantages:
Great security – Paying for vault storage is the most commonly used method since it offers optimum security for your gold.
It's hassle-free – After providing the required payment by the third party, you have the freedom to concentrate on other matters and pay less or no attention to your gold.
The possible drawback of having your gold stored by third-parties is that you won’t have easy access to it compared to when you’re having it at home.”
Stella Samuel, Team Manager, Brandnic.com
Liquidity and If You Store Gold At Home You're 100% Responsible For Its Safety
“The biggest advantage you have if you store gold at home is that you're 100% responsible for its safety. It's also more liquid as you have it physically close to you at all times for when you need to sell.
When you store your gold in the Cayman Islands or in Singapore, you will need to travel a long distance to access it. There also is the issue of political stability in off-shore locations outside the US. Your gold could be one dictator away from being seized, never to be seen again! So I would recommend stashing your gold close to home or somewhere easily accessible.”
Igor Mitic, Co-Founder, Fortunly.com
Storing Gold At Home Prevents The Possibility Of The US Government Seizing Gold in Vaults, But An Offshore Third-Party Vault Makes It Even Less Likely
“A pro of storing gold at home is having your gold close to you in case the government decides to seize gold in all vaults in case of a future depression. This is also a con because your gold is easier for an outsider to steal in your home, as it is likely less secure than it would be in a vault.
A pro of storing your gold in a third-party vault in another country is it makes it even less likely the US government will ever be likely to seize your gold under any circumstance, even a depression. Keeping your gold in a vault is also a way to make sure it is secure and harder for anyone to steal.”
Stacy Caprio, Deals Scoop
Gold Confiscation And FDR’s Executive Order 6102
Gold confiscation by the US government is a legitimate possibility, as it has occurred in the past. During the throes of The Great Depression, President Franklin D. Roosevelt made gold ownership illegal with Executive Order 6102 in April 1933. In effect, this was the presidential executive order “forbidding the hoarding of gold coin, gold bullion, and gold certificates”. As the New York Times explained at the time:
“The Executive Order issued by the President yesterday amplifies and particularizes his earlier warnings against hoarding. On March 6, taking advantage of a wartime statute that had not been repealed, he issued Presidential Proclamation 2039 that forbade the hoarding ‘of gold or silver coin or bullion or currency', under penalty of $10,000 and/or up to five to ten years imprisonment.”
The motivation for such a measure was basically to give the Federal Reserve the ability to increase the supply of money during the Depression. Although this occurred several decades ago, such executive orders could easily be enacted again during desperate economic times, or periods of social and political upheaval. Because of that fact, there is the obvious advantage of storing your gold at home.
Because of that fact, there is the obvious advantage to storing your gold at home where the government wouldn’t have access to your investment. Likewise, storing your gold investment with a reputable offshore vault company could be another option to combat the possibility of government confiscation.
At Home Gold Storage Considerations
If you do lean towards storing your gold investment at home, there are some very important things to take into consideration. Firstly, have a trusted family member or friend who is knows where your gold investment is located, and moreover who can access to it in an emergency circumstance. Obviously, this must be an individual whom you trust implicitly.
Next, access if you are a natural target for theft. Do you have overt displays of wealth such as a large residence in an affluent neighborhood, or an expensive vehicle in the driveway? Additionally, if you simply believe there is the possibility that others besides your confidant are aware of your gold stash, it may be time to reassess the home storage strategy. This natural target component is a definite con to storing your gold at home.
Lastly, but certainly not least, is the decision whether or not to insure your gold investment that is stored at home. Should you choose to do so, the major component to take into consideration is that strangers will be now be privy to your gold stash. In addition, home insurance plans can be expensive, and may not fully compensate the theft of your gold investment. Again, this is potentially another con to home gold storage.
Protection Of Your Gold Investment Is The Ultimate Goal
Obviously, protecting your gold investment is imperative and the ultimate goal. Investing in gold is the default strategy to hedge against economic uncertainty, in addition to having a diversified portfolio. Whether you choose the home storage option, offshore gold storage, or Gold IRA storage options, the choice depends solely on individual preference. For those who are interested, have a look at our top 5 gold coins for investors and our reviews of the top Gold IRA companies to learn more about your options in the space.