Gold Storage is no Simple Matter

In a time of investor uncertainty, everyone looks for something completely bankable to park their money in. The stock markets are collapsing, and news reports continue to pour in about how smalltime individual investors are fleeing the stock market for how unpredictable it is. So if they are withdrawing their money from the stock market, where are they putting it all? In CDs in banks that pay so little interest, money actually loses value over time? Not likely. They go for that beacon of stability and reliability in uncertain times gold. People are talking about prices rising to $2000 an ounce very soon now. For small investors, this is great news in an investment climate where prices falling is all they hear about. There's just one question though when they do about gold storage? These days, you don't even hold your stock market holdings in paper. Everything is electronic. What exactly do you do with your actual gold bullion, bars and coins to keep it safe?

Let's start with the most obvious option hiding it in your own home. The reason you would want to do this is that you would want to save on gold storage fees. These can be very, very expensive as much as 1% of the value of your gold when you go to a bank or other business. It can seem like the common sense thing to do to just buy a safe and hide it somewhere in your house. Certainly, your house isn't as safe as a bank vault. But if the economy really, really tanks and we more or less live in the Wild West one day where the US Dollar basically is reduced to no value at all (some right-wingers actually fear this), the fact that you have a little gold on hand to get to any time you want, can be some comfort. And it isn't as if there is nothing protecting your gold. You can always insure your house for the additional value of the gold stored in it. But that wouldn't make any sense your insurance premiums would go really high that way.

So how about going with a gold storage facility or bank? At the most affordable end of the spectrum, you'll pay about $100 for every year to rent out a storage box. If a safe deposit box doesn't seem to offer the kind of protection you have in mind, you can hire of a spot in a bank vault for more money. But if you are interested in speculating in gold though, you won't be able to access your gold for a short order after hours deal.

When you store gold with the bank, you don't actually own the gold anymore. You only own the value of the gold. So if the bank should go under, you're left with nothing. Seen this way, a private security firm could be far better.

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