This article outlines five rules to follow before, during and after the purchase process.
So said Larry Edelson (www.uncommonwisdomdaily.com) in edited excerpts from an article* last year which bares repeating at this point in time as interest in purchasing gold grows.
Lorimer Wilson, editor of munKNEE.com (It’s all about Money!), has further edited ([ ]), abridged (…) and reformatted the article below for the sake of clarity and brevity to ensure a fast and easy read. Please note that this paragraph must be included in any article re-posting to avoid copyright infringement.
Edelson went on to say:
100+ accredited manufacturer produce a staggering 400 different gold bars among them. I recommend you buy small gold bars which are available in a wide range of weights and can be bought for as little as 1 percent over the price of gold.
5 Rules to Follow When Buying Gold
Rule #1. Don’t store your gold with the dealer you bought it from
Why? Because too many of them have gone bankrupt over the years and, as the price of gold continues to skyrocket, you’ll likely see more bankruptcies, not less, down the road. In gold bull markets, the buying frenzy seems to attract the least prudent and least ethical players to the bullion industry.
Rule #2. Take possession of your gold using one of these alternatives
Why? Because when you purchase physical gold, the farther you remove your bullion — legally and physically — from the dealer, the safer it is from the claims of that dealer’s creditors.
- Alternative A: Cash & Carry
In terms of getting what you paid for, buying your gold and taking it with you is the ultimate solution. You go to your dealer, inspect what you’re buying, make your purchase, and walk out the door with your gold in hand.
- Alternative B: Consignment Method
The dealer sends the bullion to you for your inspection and then you send the money. It’s a great choice and gives you plenty of leverage. If you can find a dealer to go for it, you’re golden. Just have them send the metal to you and then you respond with a check the minute you’re satisfied you’ve got what you were promised.
- Alternative C: Sight Drafts
You make an arrangement with your bank to act as an intermediary between you and the gold dealer. The dealer sends the gold to the bank. The bank then holds it for your inspection. When you give the OK, the bank issues a cashier’s check and you take possession of the metal.
Rule #3. Use a major, independent depository to safeguard your gold
Rule #4. Use non-fungible storage
Why? Because when you put your gold in non-fungible storage, it means it’s stored in your name and it’s not pooled with bullion from other customers. This keeps your gold nice and tidy — and it’s really the best way to go. However, just because your dealer says your bullion is non-fungible and completely segregated doesn’t necessarily make it so and even if your metal is segregated, that doesn’t mean the segregation agreement will automatically stand up in court. The best way to make sure is to have your attorney review the firm’s paperwork. Either way, always specify that you want non-fungible storage. It may cost a bit more, but it’s worth every penny.
Scroll to very bottom of page & add your comments on this article. We want to share what you have to say!
Rule #5. Consider offshore purchases and storage
There is one approach I especially like and that is the Gold Certificate Program at the Perth Mint of Australia because it is/has:
- The world’s only government-guaranteed certificate program
- Insured by Lloyd’s of London at the Perth Mint’s expense
- Low minimum purchase requirements of $10,000 to get started
- Segregated storage available
- Storage in a government vault, not a foreign bank
- Gold, silver, platinum and palladium available — in coin or bullion
- Permitted in Individual Retirement Accounts (IRAs)
What happens when you want your gold? Just present your certificate by mail or in person to the Perth Mint, pay any related charges, and then tell them where you want your gold shipped. It’s simple and easy.
[Follow the above 5 rules and your gold should be secure regardless of the world’s economic, financial or political situations.]
*http://www.uncommonwisdomdaily.com/the-most-important-investment-you-can-make-628 (Uncommon Wisdom is a free daily investment newsletter from Weiss Research analysts offering the latest investing news and financial insights for the stock market, precious metals, natural resources, Asian and South American markets.)
1. Gold: What Do Terms “Karat” & “Troy” Mean? What’s A “Carat”?
What’s the difference between 1 troy ounce of gold and 1 (regular) ounce? What’s the difference between 18 and 10 karat gold? What’s the difference between a .75 and 1.0 carat diamond? Let me explain. Read More »
2. The Pros & Cons of Buying Gold Bars vs. Ingots vs. Coins
It is during difficult times [such as these when] quantitative easing and currency wars have highlighted the volatility and vulnerability of currencies…that the true, safe value of gold really stands out. It is now easier for you to convert your savings into gold than ever before and this article outlines the reason for buying physical gold and the advantages and disadvantages of buying gold bars, ingots and/or coins. Read on! Words: 853 Read More »
3. These Sites Are the BEST Places to Buy Gold & Silver Online – Here’s Why
Our review of the best places to buy gold online…[are] dependent on what your goal with the gold is — amassing physical bullion for financial security or to speculate on gold prices. Below are strategies and recommended dealers for each approach: Words: 532 Read More »
4. Beware The Dangers In Buying Certain Gold Coins – Here’s Why
At first glance, buying gold may seem a simple, straight forward process. However, there are dangers, such as falling for a telemarketer’s line that his coins are “non-confiscatable” and somehow have more value because you bought them from him. Basic bullion is the way to go when investing in gold. Words: 788 Read More »
5. Here’s a Dirty Little Secret About Cleaning Bullion Coins
Improper cleaning results in the loss of a small amount of metal from the surface of the coin. Repeated cleaning can actually lower the grade of a coin by removing too much metal. To learn the answer as to what is the best way to go about storing and cleaning your gold and silver coins read on. Words: 417 Read More »
6. Compare & Save When Buying Gold: Check Out These Worldwide Dealers
Compare and save! Who is the most reputable, cheapest and most reliable precious metals dealer to buy your physical gold and silver from? There are hundreds of dealers touting their wares but when it comes to direct comparisons only a few rise to the top of the list. Here they are. Words: 262 Read More »
7. Can I Include Physical Gold & Silver in My IRA?
I have an IRA. How can I invest in gold and silver? It is quite easy! Yes, I am talking about actual physical gold and silver, not “paper” gold, or certificates, or paper promises. Words: 621 Read More »
8. Gold:Silver Ratio Suggests Much Higher Future Price for Silver – MUCH Higher!
The majority of analysts maintain that gold will reach a parabolic peak price somewhere in excess of $5,000 per troy ounce in the next few years. Given the fact that the historical movement of silver is 90 – 95% correlated with that of gold suggests that a much higher price for silver can also be anticipated. Couple that with the fact that silver is currently greatly undervalued relative to its average long-term historical relationship with gold and it is realistic to expect that silver will eventually escalate dramatically in price. How much? This article applies the historical gold:silver ratios to come up with a range of prices based on specific price levels for gold being reached. Words: 691 Read More »
9. It’s PARAMOUNT to OWN some PHYSICAL Gold & Silver – Here’s WHY
Stop lamenting the current price of gold and silver and questioning the validity of owning PMs because without gold and/or silver it will be almost impossible to survive what is to come. No one knows when, but when it does, and it is a historical certainty, are you really going to care what you paid for your gold and silver? Read More »
10. Nick Barisheff: “Today’s the 2nd-Greatest Opportunity to Buy Gold Since 2002!”
Last year…saw gold’s greatest decline in 32 years…but I’m still confident that gold’s bullish fundamentals are still intact and that what I said in my recently published book, $10,000 Gold, still holds true. Here’s why. Read More »
11. Be Careful! Owning Gold Bullion is a Revocable Privilege in the U.S. – Not a Basic Right!
The laws of gold confiscation are very clear in the U.S.: During any time of national crisis, it becomes illegal to buy, sell, or “hoard” gold bullion in any form. It is delineated under an Executive Order and can be re-administered as quickly as the assets in your checking account can be frozen. The penalties for violation are 10 years in prison, $10,000 fine, or both. Words: 821
12. Beware: Official U.S. Government Price for Gold is Only $42.22/oz.
The United States has seen four different gold confiscations — the last of which was in 1933. Few people realize that when the freedom to own gold was restored in 1972, the President retained the power to require us to surrender our gold which he can do again any time (probably on a Friday) with the mere stroke of a pen. That means all confiscated gold could possibly be compensated at only $42.22 per 1oz. and not at the world market price. Don’t take this decision lightly. It was another blatant warning that the government may be contemplating grand larceny — AGAIN. Words: 1740
13. How To Avoid Getting Ripped Off When Buying Gold
If you’re trying to invest in precious metals, then stick to bullion coins or bars. Don’t be distracted by numismatics, rare coins, collector’s items, or fancy packaging or grading schemes…Even though I have long warned of the dangers of the industry, it is hard for retail investors not to be led astray by high-pressure salesmen [but] reading this guide is a step in the right direction. Words: 1000
When it comes to PM’s the old adage still rings true:
Those that plan ahead always come out ahead.
I’d also add that:
Those that don’t plan ahead, usually end up beholden to those that do…