Why Invest in Gold in 2022?
Historical trends show that investing in gold has made a good hedge against poor performance from currencies, shares, bonds and real estate. The idea is to reduce overall losses by using gold to diversify the portfolio’s investments. Gold typically acts as “investment insurance” – a simple tool for smoothing your risk and return, and reducing your overall losses.
Gold investing can make a good idea for spreading risk across a balanced portfolio. Only by owning a range of different assets can you reduce the cost of this uncertainty on your savings and spending power. Spreading risk like this is known as diversification. At the simplest, it means owning two different assets, rather than putting all of your money into just one. Because without diversifying, you would risk losing everything if that one investment collapsed.
Gold’s power for diversifying risk and smoothing returns comes from its unique mix of five key attributes:
- Non-correlation: Gold prices don’t tend to move in the same direction as other asset classes, helping reduce the impact of sharp losses elsewhere in a portfolio. Indeed, across a matrix of 17 major asset classes only the US Dollar, 3-month Treasury bills, US government bonds and corporate US debt show smaller week-to-week correlations with all the other assets than gold does over the last 5 years.
- Positive skew: Unlike the stock market, gold prices tend to rise faster than they fall. Coupled with its low-to-negative correlation, that means gold has worked quickly in the past to reduce the overall impact of sharp losses on other assets in a portfolio.
- Deeply liquid: Physical bullion is one of the deepest, most heavily traded asset classes. If it were a currency, it would represent the fourth largest FX pair in the world. Starting in Asia and ending in the US, trading runs almost 24 hours a day Monday to Friday. Live dealing on BullionVault continues all through the weekend as well.
- Global demand: Gold enjoys a uniquely wide and varied user-base worldwide, from investors to electronics manufacturers and central banks, with a series of seasonal events spurring consumer demand from engagements and weddings to Diwali, Christmas to Chinese New Year.
- No currency risk: While we tend to think of gold quoted in Dollars, it doesn’t rely on the US currency for any of its value. Instead, gold holds value against all currencies directly, making it highly useful for protecting against currency crisis or sharp inflation.
3 Ways to Invest in Physical Gold
When investing in gold, making the decision to buy gold is only the first step. You then have to decide how you will buy it. There is no perfect solution to this question individuals will have their own preferences. But it is well worth being aware of the pros and cons of each storage method. James McKeigue explains the differences between storing gold bullion yourself, storing it in an ‘allocated account’, and keeping it in an ‘unallocated account’.
Storing your gold yourself
One option is to take physical possession of gold in the form of bars or coins. However, that means you have to store the gold yourself, leaving you on the hook for any loss or theft.
And even if you live in a fortress or have access to a safety deposit box holding gold can be tricky. That’s because when it comes to selling the gold you can’t guarantee its quality. Investable gold the price of which is quoted in the financial pages has to be of a certain standard.
The bars professional bullion dealers trade weigh 400 troy ounces. The bars are at least 99.5% pure gold, are refined by an accredited bullion dealer and are verified by a process known as assaying. As long as these ‘London good delivery’ bars, as they are known, move between the vaults of recognized bullion dealers, they keep their integrity.
However, once they move outside, say to a private investor, their integrity is uncertain, as they may have been tampered with. Such gold immediately loses some of its value because, for it to be bought be a professional gold dealer, it would need to re-assayed or even melted down into a new bar.
Allocated vs unallocated accounts
As a result of these challenges, most investors pay someone else to store their gold for them through allocated or unallocated gold accounts.
Allocated accounts use your investment to buy and store physical gold in secure, insured warehouses. Legally, you are still the owner of the gold and the account provider is the custodian.
Unallocated gold accounts don’t physically store your gold. They use the money for other investments, but promise to hand you back your gold, or the equivalent money, when you are ready to sell. Because they don’t have to pay for physical storage, unallocated accounts have smaller running charges.
However, many feel that unallocated gold is more risky. If the provider goes bust, all you will have is its promise to give you back your gold which will leave you waiting in line with other angry creditors.
With allocated gold, you are still the legal owner of the gold as you just paid the company to store it for you meaning that it would be returned to you if the provider were to go bankrupt.
Pooling your investment
However, even with allocated gold accounts, the exact value of your investment may not exist in separate gold bars the amount of money invested might not tally to the standard weights of gold bars. As a result, many allocated account providers combine several investors’ holdings to buy London Good Delivery Bars the most cost-efficient way to buy gold.
At current prices, a London good delivery bar costs around $733,448, so pooling is the only way that most investors can take advantage of the lower prices associated with the bar. Again, some critics aren’t happy with pooled gold: in the event of a bankruptcy it could be difficult to separate out individual holdings. We can see their point, but resolving the issue would most likely not threaten your investment.
Your choice depends on your circumstances. On the whole, we’d opt for allocated gold accounts. If you want to hold on to some gold at home, coins are easier to manage and store.
When investing in gold as a way to spread risk, it’s a good idea to think about costs, security and simplicity. Buying gold needn’t be expensive. It can be done cheaply, safely and easily using BullionVault.
Why choose BullionVault for gold & silver ownership?
BullionVault lets private investors around the world access the professional bullion markets. You can benefit from the lowest costs for buying, selling and storing gold and silver.
BullionVault is the world’s largest online investment gold service taking care of $3.8 billion for more than 95,000 users. It is part-owned by both GBIT and Augmentum Fintech plc.
Bars are stored in professional-market vaults in Zurich, London, Toronto, Singapore or New York. You choose where. Because of our size, you benefit from the low storage costs we have negotiated, which always include insurance.
You can sell at any time, without penalty, and your money will be wired the next business day. You can also withdraw your bars.
BullionVault is quick and easy. You could own any quantity of physical gold and silver bullion in about 2 hours.
Gold, silver, and platinum can be purchased and sold on BullionVault, a leading platform for the trading of precious metals. Gold, silver, and platinum bullion can be traded to private investors through BullionVault, a vault provider who stores their bullion on their behalf. Investors own their precious metal holdings and have the option to seize them. Reports on the gold, silver and platinum holdings are published regularly, and these are checked and audited.
History of BullionVault:
Founded in 2003, BullionVault deals with gold, silver, and platinum. Private investors can purchase vaulted gold from BullionVault online since 2005. A vaulted gold investment is physical gold that an investor owns and keeps in a professional vault for security reasons. BullionVault offers an Internet platform for purchasing and selling gold.
Customers can also contact BullionVault by phone. As of March 2017, BullionVault also offers vaulted platinum as well as sawdust. Investors can choose from five different gold vaults in Zurich, Switzerland, London, New York, Singapore and Toronto (Canada) to acquire their gold as their direct owners. Gold vaults are also available in several jurisdictions, so clients can diversify their holdings of gold. Investing in BullionVault is similar to trading gold on a gold exchange: clients can buy and sell gold to other investors. Moreover, BullionVault serves as a market maker, i.e. it brings gold to its customers and sells it to them.
The Automatic Gold Investment Plan was introduced by BullionVault in March 2013 and offers investors regular gold purchases per day at the London price. Upon setting up the investment, the investor can simply deposit money into his BullionVault account, and the money is automatically used to purchase gold.
BullionVault does not require investors to place orders or trade directly on the platform. BullionVault Gold Purchases account holders may make regular deposits (e.g. every month) from their bank account by setting up an automatic monthly withdrawal. Investors can decide when and to what extent to make deposits into their accounts under the Automatic Golden Investment Plan. Payments can be adjusted at any time within certain limits and the deposit can be ceased at any time without affecting their credit rating. BullionVault’s website offers more information about its Automatic Gold Investment Plan.
How easy is it to use BullionVault?
Using the website is easy and clear. The website has a wealth of information, including a handy investment guide, precious metals price charts, news, buying information, and reviews. Even though the site contains some information, it is extremely easy to navigate and is extremely user-friendly. Opening an account with BullionVault usually takes just a few minutes.
It is necessary to provide the user name, email address, user name, and password. Verifying your account requires a copy of your ID and a copy of your bank statement. It is mandatory. After your usual personal information has been added and your account has been verified, you will be able to fund your account through a bank transfer or credit card payment. Typically, online trading is the primary method for purchasing and selling gold and silver vaults. Buying sawdust gold and silver is easy and convenient for the customer. In theory, you could have any amount of physical bullion in about two hours after registering and verifying your account. BullionVault is used in what way?
BullionVault offers very reasonable storage prices of gold, silver, or platinum at high-tier vaults that are safe and secure. For example, storing precious metals at home could be risky, and it isn’t as simple as you think. The best method for storing gold bullion at home is to be creative, and the safest method is to keep it out of harm’s way.
If your gold is stolen, you might still lose it all. A security deposit box may also be an option. The safe deposit box makes it somewhat secure. Technically speaking, however, it may be possible to seize a security deposit box or amend the law by refusing your access. BullionVault makes gold storage risk-free by taking care of the shipping and other costs for you. It is 100 percent allocated to gold. In other words, let’s say you buy gold and that the gold is your legal property on your behalf. Neither it nor any other entity can be claimed by BullionVault.
Investing in Gold through BullionVault:
BullionVault’s gold investment solution is a physical gold purchase, deposited in an assigned account, but held in a safe place. This method has the advantage of not having to pay the costs of receiving gold, as well as not having to pay the most expensive wholesale rate, instead of the retail rate. Certified investment grade gold is held in a named and numbered account for the benefit of the client.
Sizes of Bars to suit the individual:
It is a bullion bar investment to acquire gold from BullionVault. Bars of this size are gold-grade investment and can be used to store gold. Purchases are not possible. One of the major investors’ choices is London, Zurich, or New York to store these bars. The customer holding lists match the real holdings, and the company audits its accounts daily. Nicknames are used in this system and they are known only to the account holders. A professional audit allows an investor to ‘see’ his gold.
Currency of Dealing and Commission:
A Euro, Sterling or US Dollar investment could be made. By avoiding currency exchange, it is possible to avoid costs associated with this process. The bulk of BullionVault’s gold is purchased if it purchases it. Thus, the company avoids high commissions and charges and transfers a significant portion of these savings to its clients at very competitive commission rates.
A minimum of £2.75 per month is charged for storage and insurance, which is among the low costs in the industry at 0.8% and 0.12% per month, respectively. For investors with larger amounts, the rate of commission drops to 0.02 percent for sums over 600 thousand dollars.
Ease of Use:
To open an account at BullionVault, all you have to do is go online. It takes about five minutes. The registration process requires details to be provided, followed by the account being funded (either by bank transfer or credit card). An investor may have to provide additional documents or details for money laundering purposes. The investor’s online trading screen can be used to buy and sell gold after the funds have been moved to BullionVault.
All accounts must be validated within two weeks of registration. It’s a legal requirement, but it’s easy to complete online and it takes just a few minutes. Buying and selling gold can be done with just a click of the mouse on the trade systems, as well. Customers can post offers and offers to make the market almost exclusive.
What Coins Does BullionVault Offer?
On the website of BullionVault, a variety of coins are available. There are currently six coins available from the dealer. A currency’s value is determined by its measurement by buyers and sellers. Market statistics are used to set the prices for the Royal Mint’s 2021 Gold Sovereign coin.
Is BullionVault a scam?
I don’t. Its registered office address in the United Kingdom belongs to the company Gal Marley Ltd T/A BullionVault. BullionVault’s headquarters are located at 3 Shorthand’s, London, England, and W6. However, the vaults are located in London (UK), Zurich (Switzerland), New York (USA), Toronto (Canada) and Singapore. Trust is essential when dealing with BullionVault. The company belongs to a distinguished group of eminent bullion dealers.
What is the BullionVault trading platform like?
Gold, silver, and platinum bars can be purchased and traded at BullionVault using a trade platform. In addition to bullion bars, the vaults also house professional vaults. A drop-down menu is available on your account for placing buy and sells orders. As a trader, you have the option of buying precious metals from various markets. The Live Order Board displays the current tender price. BullionVault is an online precious metal trading platform where you can directly deal with other members. Buying and selling directly keeps brokerage fees low, since you deal with other buyers and sellers directly.
The BullionVault app:
You can download BullionVault’s user-friendly app from an app store or play it on Google Play. You can access it through your smartphone or tablet 24 hours a day, which is a great feature. It is possible to check balances and orders as well as markets, prices and purchases on the go. It is also possible to set price alerts to receive notifications when prices change.
This is an excellent feature for regular traders. I like it because I can access my account around the clock with my phone or tablet. Your balance and orders can be managed on the go, as well as checking the markets and price chart. A price alert lets you know when prices fluctuate. It is an excellent feature if you are a regular trader.
To download the app from the app store or play it on your device, visit the BullionVault website. You can access your account on your phone or tablet 24 hours a day with this feature. Shop and sell on the go, and keep track of your order balance and orders. You can set price alerts to receive notification when prices fluctuate. Traders will appreciate that feature if they trade regularly.
Why is the gold stored in secure vaults?
Allocated vaulted storage is arguably the most secure way of storing gold bars and coins.
With BullionVault, you can store your precious metals in a private, secure vault with the help of a trusted provider. A 24 hour online account allows you to access your gold anytime you want. As long as you know about gold, you can buy more silver or sell your gold bullion whenever you like. With physical metal lying around the house, it’s harder to do. Gold can be purchased, sold, and stored at the same time.
Remember storage costs.
In general, metals are stored at a minimum monthly fee (US$4 for gold, $10 for silver, and $12 for platinum). Below that level, storage can decrease the effectiveness of your investment. It is recommended to avoid investing less than $2000 in the overall portfolio.
What is the customer support like?
The service provided by BullionVault is excellent. Customer service quality and ease of use have been emphasized in several positive online reviews. (During business hours) It’s good to know you can call and speak to someone. Another great feature is that Live Support, which is available 24/7, allowing customers to ask questions easily and quickly when needed (again, during regular business hours). There is a very thorough section on BullionVault’s website for frequently asked questions. Most customers have their questions answered by this. The standard e-mail address, the complaints procedure, and the standard mailing address are also available.
How Do Withdrawals Work?
Since BullionVault banks are located in the United Kingdom, working hours are determined by GMT. US bank account holders will be charged a fee of $10 by ACH. An ACH payment fee of $30 will be charged in the event that the ACH is not in stock. A CHAPS fee of £20,000 or more will be charged to British clients with UK bank accounts for withdrawals to UK bank accounts. We process cancellations of less than £20,000 for free through BACS. The fee for EU and Swiss clients is €10 paid via SEPA, with the local bank possible to charge an additional fee. The fee for all other clients other than those in the above categories is $30 via SWIFT.
How to Verify Your Account:
Provide the following documents, which are necessary: Identification documents, such as a passport, national identification card, driver’s license, or any other government-issued document that features your photo, your date of birth, and your signature. The bank statement of the account that was used to fund your BullionVault account is proof of your bank account. A utility bill may suffice in place of a bank statement if no address is shown on it. The proof of legal entity is also required for businesses and trusts. A confirmation e-mail will be sent to you once your account has been validated. You can check your account status under Account > Validation.
Final Thoughts:
Gold bullion distributor BullionVault is among the world’s largest. More than 40,000 customers use the company and 30 tones are held. Due to its low cost structure and flexibility, it is the ideal solution for retail investors who want to buy gold easily. In the past, an investor could physically withdraw gold from their assigned account, but this approach has become less expensive.
The withdrawal of physical gold costs 2.5% of its value, plus 5% if the weight of the gold is less than 400 ounces (equivalent to the weight of a standard London Good Delivery Bar). Investors are further protected by the daily independent audit. Funds from the sale of products or services shall be deposited within 24 hours and withdrawn within 48 hours. When it comes to gold investors, BullionVault is difficult to beat with its easy-to-use system, small retailing and storage costs, and 24 hour access with the highest level of customer security.
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