Jump to content
Steve Netwriter

The Beginners Guide to Gold/Silver

Recommended Posts

I'm glad my efforts are liked. I worry about posting too much. I don't want to be too 'in your face' on here and annoy anyone. Thanks for your kind words.

 

------------------

 

I think this thread is useful for anyone new to gold/silver investment:

 

URGENT I need to help my parents!

http://www.greenenergyinvestors.com/index.php?showtopic=3829

 

Share this post


Link to post
Share on other sites

FAQ - And our answers to them

 

I've just had this question on another forum.

I thought I'd try and collect all such questions, and any answers people post (whether on here or where ever):

Did I get anything wrong ? Or miss anything ?

 

--------------------------------

 

I know there are a lot of investors that are consistently talking about gold.

 

I do not want to be a pessimist so could someone please answer the following questions to help me out?

 

- Why is demand 16% lower than this time last year?

 

- Why has the price of gold remained relatively low in the past year when compared to successive falls and considering the weakness of the USD?

 

- With the Fed expected to increase interest rates to combat inflation how will a stronger USD affect the gold price?

 

- When jewellery makes up the majority of the demand for gold, what effect do you think this economic downturn will have on jewellery demand?

 

- Considering most people agree that many financial institutions and households are heavily in debt, who will be the buyers of gold?

 

Below is published from technicalindicators.com

 

"As an indication of the public's interest in gold now, following are the figures published by the U.S. Mint showing the amount of gold sold by the U.S. Mint in the form of "American Eagle" coins bullion sales (in no. of ounces):

 

No. of Ounces

 

1997 771,250

1998 1,839,500

1999 2,055,500

2000 164,500

2001 325,000

2002 315,000

2003 484,500

2004 536,000

2005 449,000

2006 261,000

2007 198,500

2008 (thru May) 182,000

 

Judging from these figures, it appears there is no rush to buy gold coins in the U.S. - in fact it appears that more gold coins were sold when the stock market was rising. This helps to make the point that more gold is bought during good economic times when people have more money to buy gold, not during slow times when people have less money to spend.

 

There doesn't seem any reason that anyone can worry about a shortage of gold now or in the foreseeable future."

 

 

I'll try my best. I apologise, I think this may end up a little long......

 

"Why is demand 16% lower than this time last year?":

 

OK, when I read that my first question was "where is that number from?" I think you answer that later. More later.

 

"Why has the price of gold remained relatively low in the past year when compared to successive falls and considering the weakness of the USD?":

 

Now the answer to this depends upon your world view. There are two. I suggest a read of this:

 

Gold Is Money - Deal with It!

http://www.goldensextant.com/LandisAMA.html

 

which explains this as follows:

 

Two paradigms are at war in the gold world. The dominant set of received beliefs, those that shape the way most of us look at gold, is the “gold as commodity” paradigm. This view, with few exceptions, is held by all the major players - official sources, the media, analysts, the miners, and even a lot of gold bugs who ought to know better.

 

The commodity paradigm has three basic elements:

 

1. Gold was “demonetized” in the 1970’s.

 

2. Gold, like other commodities, is a hedge against inflation.

 

Here I bow to superior numbers and use the term “inflation” in its popular, and incorrect, sense: a rising price level. This is the sense in which the term is understood under the commodity paradigm, and also the sense in which it is used in the leading empirical study of gold, which I’ll come to later. I hope the Austrians among you will forgive me; I can tackle only so many paradigms at one time.

 

3. There is no monetary demand for gold. The demand for gold is principally ornamental. Above-ground supply is abundant, and the bulk of it is held by central banks, who are indifferent and accidental owners. The market is always at risk of disruption from a mobilization of that supply.

 

The commodity paradigm is almost universally held, and it appears consistent with actual experience over the past 30 years. It’s no wonder the dissident message can’t get through. Under the governing paradigm, our allegations of official intervention make no sense. Why would central banks try to hold down the price of a mere commodity?

 

Enter the challenger paradigm, struggling to get a hearing. Call it “gold as money”. It is a minority position, to say the least. Such is the power of the commodity paradigm. Yet the monetary paradigm has the distinct advantage, in my view, of being true.

 

Its core elements are as follows:

 

1. Gold is permanent, natural money. Politicians can no more demonetize it than King Canute could order out the tide.

 

2. Gold is not a hedge against a rising price level. It is a hedge against a currency collapse.

 

3. Demand for gold is principally monetary. Unlike other commodities, it is produced for accumulation, not consumption. The threat to an orderly market posed by the central banks is at this point largely bluster.

 

Under the monetary paradigm, gold is Banquo’s Ghost at the Jackson Hole Orgy. Once you accept it, official hostility toward gold, at least within the monetary Coalition of the Willing, is not just understandable. It is axiomatic.

If you accept the "gold is money" view, then you may also accept the "manipulation of the gold market" views, which will then adequately answer your question. A combination of "They knocked the price down", and natural market movements.

Put simply, gold is in competition with fiat money. One is in limited supply, and has a very long track record, the other, based on nothing but faith, has a track record of less than a century in its current faith-only state.

 

Loss of faith in fiat money would lead to a loss in the one thing that is required to sustain it. Gold, and any hard asset, is the enemy of the fiat money system.

 

 

"Considering most people agree that many financial institutions and households are heavily in debt, who will be the buyers of gold?"

 

Those with fiat money. Make no mistake, there is a lot of fiat money in the world. A growing amount every year. Buying gold is not limited to the very rich. That is the great thing about it. Unlike fiat money it gives the owner rather more freedom. A gold coin in your pocket cannot be eroded in value by a central bank creating more gold. Unlike fiat money.

Anyone with spare money from their income can choose between putting it into the banking system (the fiat money system), or buying a small amount of gold/silver. With silver at ~US$20/oz, the ability to buy a few silver coins is open to most.

 

By the way, if you object to the idea that there is a lot of fiat money in the world, ask yourself this. Where does money come from? Google "fractional reserve banking" for a clue

A lot of debt means a lot of money, somewhere.

 

OK, now onto the fun bit.

 

"As an indication of the public's interest in gold now, following are the figures published by the U.S. Mint showing the amount of gold sold by the U.S. Mint in the form of "American Eagle" coins bullion sales (in no. of ounces)".

 

This made me laugh.

Of all the sources of information on the demand for gold, that was the very worst choice.

What they have published is not the demand for gold, but instead the supply of gold from the US Mint.

They are the same I hear you say !!!!

No, they are not. They are only the same if the supply is unlimited, and allowed to match the demand.

Try Googling something like "coin shortages us mint".

The US Mint for some period removed gold coins from sale

Of course the sales were down, they would not sell them !

 

Now instead, try looking at the numbers for gold from various other more free suppliers.

Try the amount of gold/silver stored by Gold Money.

The amount stored by Bullion Vault.

The amount owned by the gold ETFs

 

You will find a HUGE demand.

 

Here is one chart as an example:

 

SPDR_GLD_Holdings_080711.gif

 

An interesting question is "if demand has been so high, why has the price dropped so much?" Answer that one without using manipulation in the answer

 

 

I hope that answers your questions OK.

Feel free to ask more. I will try and answer them.

Steve

Share this post


Link to post
Share on other sites

This is a "god send" for newbies Steve, great thread - just wish you'd done it a few months earlier.

--------------

 

ETFs

 

Anyway, cbs7 brought some alternative ETF's to our attention in another thread

I like to maintain some diversification so I found some Swiss ETFs run by ZKB Bank which I feel are safer (am I naive to think this?) and have used these to maintain a little more liquidity with a smaller fraction of my precious metals. If anyone is interested the ETFs are below, and demoniated in Swiss Francs:

 

ZGLD ZKB GOLD ETF

ZSIL ZKB SILVER ETF

 

I'd like to mention the closed end fund of Central Fund of Canada (CEF) is another option, (approx. 50/50 G&S by value) bought like any other stock quoted on AMEX or TSE. Note: It often trades a few percentage points above NAV, I believe this may be owing to the more favourable tax treatment it has over ETF's for US citizens DYOR. Oddly enough I believe it actually gets a "thumbs up" as a credible fund in James Turk's latest book. I hope he's right, I'm in as part of my diversification strategy. Nearly 100% gold, how's that for diversification :lol: "diversification is only for those that don't know what they are investing in" Warren Buffet (or something like that).

Share this post


Link to post
Share on other sites

I hope you are right. It still feels less than perfect to me.

I hope you don't mind, but I'm going to make your post into the ETF info post, by adding a large header.

 

PS As you may tell, I am trying to keep this thread as short as possible, with the maximum concentration of information.

Share this post


Link to post
Share on other sites
I hope you are right. It still feels less than perfect to me.

 

You mean you would doubt the great James Turk? :)

 

I hope you don't mind, but I'm going to make your post into the ETF info post, by adding a large header.

 

No, actually I guessed you would lift it and put it in your OP with your ETF contribution, no probs either way, what's best for the customer I say :D

 

 

 

Share this post


Link to post
Share on other sites
:lol: I thought not, but I had my doubts since you must get a lot of blood rush to the head being upside down and all that :D

Share this post


Link to post
Share on other sites
Bullion Vault Watch - discusses the different ways to sown gold, including whether Bullion Vault is safe, including charts of how much gold they have.

http://bullionvaultwatch.blogspot.com/

This article: http://bullionvaultwatch.blogspot.com/2008...vault-safe.html

The two links no longer work - do you have updated ones?

ABB

Share this post


Link to post
Share on other sites

Thanks Steve, found my way here from the interest.co.nz site - so yes I got your message. The post is very informative and I appreciate the direction as it is always a bit scarey when investing in unfamiliar territory. Aim to invest only enuf so i can buy the small heavily indebted nation in the south pacific that I miss so much. It needs saving from itself really and I think a couple of quid a week into the fund should do it.

Share this post


Link to post
Share on other sites

Excellent :D

 

Welcome to the forum :D

 

I've just been checking Bernard's site and wondering whether you'd found my reply. Things do tend to disappear downwards quickly on there.

 

There is quit a bit on here. I hope you find it interesting.

 

There are a few others from NZ on here. Either living in NZ or Kiwis overseas.

 

(I'll remove that huge quote :D )

Share this post


Link to post
Share on other sites

The History of Gold

 

There is a tendency to ignore history. We do so at our peril.

We also tend to think only recent history is relevant. This is misguided.

 

This is the history of gold:

 

The_History_Of_Gold.gif

 

 

Jewellery

4000 BC - A culture, centered in what is today Eastern Europe, begins to use gold to fashion decorative objects. The gold was probably mined in the Transylvanian Alps or the Mount Pangaion area in Thrace.

 

First Use As Money

1500 BC - The immense gold-bearing regions of Nubia make Egypt a wealthy nation, as gold becomes the recognized standard medium of exchange for international trade.

The Shekel, a coin originally weighing 11.3 grams of gold, becomes a standard unit of measure in the Middle East. It contained a naturally occurring alloy called electrum that was approximately two-thirds gold and one-third silver.

 

China

1091 BC - Little squares of gold are legalized in China as a form of money.

 

Great Britain

1066 AD - With the Norman conquest, a metallic currency standard is finally re-established in Great ritain with the introduction of a system of pounds, shillings, and pence. The pound is literally a pound of sterling silver.

1284 AD - Great Britain issues its first major gold coin, the Florin. This is followed shortly by the Noble, and later by the Angel, Crown, and Guinea.

1377 AD - Great Britain shifts to a monetary system based on gold and silver.

 

US

1787 AD - first U.S. gold coin is struck by Ephraim Brasher, a goldsmith.

 

Default

1971 AD - On August 15, U.S. terminates all gold sales or purchases, thereby ending conversion of foreign officially held dollars into gold.

 

 

 

References:

 

The History of Gold - National Mining Association

http://www.nma.org/pdf/gold/gold_history.pdf

Share this post


Link to post
Share on other sites
...

There is a tendency to ignore history. We do so at our peril.

We also tend to think only recent history is relevant. This is misguided.

...

 

I like the layout Steve, simple and informative. Here are a few more fact on the History of Coins that you may want to add in, it will also push you begining date to a bit earlier.

 

Sadly I find coins very interesting subject, still better than trains though and I don't have to wear a mac and stand in the rain :blink:

 

  • 3100BC Sumerian writing describing exchange, deposits and loans, first recorded banking transactions between city states and countries using commodities including gold and silver
  • 1800BC Eshnunna Law Code – Used to be in the Bagdad Museum describes 1 shekel of silver as being worth a bushel of grain
  • 750BC Code of Hammurabi – A set of Babylonian banking laws
  • 620 - 600BC Lydia - Oldest gold coin in existence - alloy of gold and silver – Can be seen in the British Museum – A very well researched argument as to why this is the first real coin can be found here http://rg.ancients.info/lion/article.html
  • 221BC – Qin Dynasty Chinese coin standardisation
  • 70BC – First Gold Staters produced in the UK
  • 43AD – libra pondo - Latin – “a unit of measurement by weight “ now know as the pound, the original was measured as 240 silver denari
  • 600AD – Production of gold and silver coin restarts under the Anglo-Saxons in the UK after the withdrawal of Rome in 410BC
  • 830AD – Penny used as a name for a coin produced under Eanred there are still arguments over where the name penny originated as it appears in a number of old North Western languages

I would be a bit wary of the 1091BC reference for the gold coins as this claim is subject to a bit of controversy and even the Chinese government does not really recognise them, this does not mean that they did not have gold coins then but they are thought to come from the end of the dynasty rather than the beginning when shell, spade and knife money was being used. They are attributed to the Zhou dynasty which ran from 1122BC to 221BC see http://www.ebeijing.gov.cn/Elementals/eBei...ood/t962507.htm

 

Share this post


Link to post
Share on other sites

Thanks for that :D

I fear I could become interested myself. Save me, save me :lol:

 

I think what would be interesting, and might make a good addition to that chart, is the history of pre-gold money.

One point I think I'd like to make is how various things were used, and how gold/silver became the best through trial and error.

Share this post


Link to post
Share on other sites

Thanks to Steve and all for the great stuff

 

Questions from a UK Investors point of view:

 

I understand why if I was a US Citizen gold would make a good diversification away from the $ which is the worlds reserve currency and the US Gov has abused that position

 

BUT as gold is priced in $$ wont US hyperinflation counteract the gain?

- if anyone knows the answer to this would be interested.

 

Have you come accross any articles as to why Gold would benefit a UK investor?

- links greatly appreciated

- most stuff seems to be US investor related

 

If the shit really does hit the fan and all currencies go to pot, banks go belly up and lawlessness takes over....THEN Who actually guarantees that you will be able to get hold of /withdraw (phsically or otherwise) your gold held in goldmoney's vaults etc. Will goldmoney/goldbullion/whatever actually survive such a crash. If you have a gold bar at home better not advertise it or the local gangsta will come and take it from you.

 

SO I guess typing this I can partly answer my final question - a gold investment would be good if the financial systems crash or if there is a large drop in confidence. But might not be of much practical use in the event of a complete breakdown in society/the financial system?

 

Maybe only Russian Oligarch's know the answer !

Share this post


Link to post
Share on other sites

SOME TECHNICAL INDICATORS

============

 

= 1/

TAKE A LOOK at the Long Term chart:

bigis4.gif

The Bull market in Gold is still intact.

Something like $800 is key support on the Monthly chart, then $650 maybe

 

I dont believe the dollar can go much higher. This ws driven by a concerted effort of CB's

in a summer market, and they may have spent their force by now, and will need to be careful

from here. A big bounceback in Gold would mark a very important low for Gold, and give

the Dollar bears a great chance to regroup.

 

In hindsight, the $850 had too many stops, and was too tempting a target for Gold Bears to miss, so they ran the stops there, and triggered a $30 selloff.

 

bigfz6.gif

 

Today's sentiment feels more like a low than the complacency many had on Friday

(self included.) Another few days, could establish a nice low, filling that gap at GLD-$79/80

 

aa5fi3.gif

 

 

= 2/

This is what a bottom should look like:

aa3pc4.gif

 

The above is the Oil Holders etf (OIH) - includes shares of Oil Service companies.

It often leads Oil (USO), which has sometimes led Gold (GLD) also.

 

It made a low yesterday on light volume, and then rose on heavier volume.

That's a very positive sign, and now it looks set to break above that downtrend line.

 

If OIH opens higher on big volume, a bottom may be in place, and I think it is then likely

that a Gold bottom will come within a few days also.

 

Other charts: OIH vs. USO & GLD: st-10 days : lt-6 months

Share this post


Link to post
Share on other sites

How much gold/silver should I buy as Insurance ?

 

I think we are talking about your liquid portfolio. You don't expect to lose your house. It's cash in the bank, shares etc, things that have counter-party risk, that need insurance against loss.

 

I don't think you can work this out accurately. For that you'd need to know the eventual price of them.

 

So lets use the physicists approach:

 

Options:

 

1. 0% - Hmmm, somehow I don't think that's going to work

 

2. 1% - Worst case you could lose 99%, so the price of gold/silver would have to go up by 100x to compensate you. Maybe possible, but unlikely.

 

3. 10% - Worst case you could lose 90%, so the price of gold/silver would have to go up by 10x to compensate you. Is such an increase likely? I think so, in which case this level of insurance is reasonable.

 

4. 100% - You don't have anything to insure !

 

So on the physicists scale, 10% seems about right.

 

The one danger you face is that of non-uniformity. ie only the bank you have your money is goes bust and leaves you with nothing. In such a situation, the price of gold/silver would not have to rise dramatically, and so a 10% insurance would be insufficient.

The implication is that the less gold/silver you have as insurance, the more diversified you need to be with your other holdings.

Share this post


Link to post
Share on other sites
Thanks to Steve and all for the great stuff

 

Questions from a UK Investors point of view:

 

I understand why if I was a US Citizen gold would make a good diversification away from the $ which is the worlds reserve currency and the US Gov has abused that position

 

BUT as gold is priced in $$ wont US hyperinflation counteract the gain?

- if anyone knows the answer to this would be interested.

 

Have you come accross any articles as to why Gold would benefit a UK investor?

- links greatly appreciated

- most stuff seems to be US investor related

 

If the shit really does hit the fan and all currencies go to pot, banks go belly up and lawlessness takes over....THEN Who actually guarantees that you will be able to get hold of /withdraw (phsically or otherwise) your gold held in goldmoney's vaults etc. Will goldmoney/goldbullion/whatever actually survive such a crash. If you have a gold bar at home better not advertise it or the local gangsta will come and take it from you.

 

SO I guess typing this I can partly answer my final question - a gold investment would be good if the financial systems crash or if there is a large drop in confidence. But might not be of much practical use in the event of a complete breakdown in society/the financial system?

 

Maybe only Russian Oligarch's know the answer !

 

Sorry, not had time to answer before :(

 

I find it much easier to think about gold as another currency, with exchange rates with all the other fiat currencies. That way you can see that the price will fluctuate like any other currency dependent on demand.

So although most people quote the US$ price of gold, I think it's better to look at it in "your currency".

Yes, if the US$ drops massively against all the other currencies, those who moved out of US$ into another currency will see the most difference. And gold is one of them.

 

But take Yen. If the US$ drops, many people expect the Yen carry trade to reverse, and for the Yen to rise dramatically. In that case, maybe Yen and gold will rise roughly the same amount. If so, for those with Yen, maybe gold is not so good.

 

But of course, if all fiat currencies are being devalued, then gold will be the best performing of them all, but simply look better relative to the worst currencies :D

 

I used to ask the very same question you have raised. And since viewing things as above, I've found it much easier to think about.

 

Yes, the worse thing get, the more extreme the measures needed to protect yourself. Ultimately some very secret big holes, and plenty of guns and amo. Lets hope it doesn't get to that !!!!

Share this post


Link to post
Share on other sites

Seasonality

 

Unlike slower moving markets like housing, the precious metals market is very volatile. That means it goes up fast, and down.

 

Success in precious metals therefore requires a great deal of knowledge. It's not the same as seeing a pretty house you like and buying it.

 

One critical aspect is seasonality. The price tends to follow a pattern through each year. Of course it is never quite predictable. That would make life too easy :D

 

So after the large drops recently, many less experienced people will be thinking of committing suicide, or worse still, selling their precious metals at a loss :D :D

 

Prices go up and they go down. A lot. That's the wonderful volatility for you. It makes it much more interesting. But what is important is the trend. You have to do your own research, and decide for yourself what you think the long-term trend is going to be. All the ups and downs are then just interesting noise on the way :D

 

This is such a great time. After the recent drops, there are so many interesting things to look at. Personally I find times like this much more fun than when the prices are just rocketing up. At such times it's like driving a fast car. It's fun, but it's not intellectually interesting.

 

So, to seasonality.

 

Seasonality.gif

 

From:

 

July's Commodities Purge Offers Long-Term Opportunity

http://www.kitco.com/ind/Holmes/holmes_aug072008.html

 

and:

 

Seasonal_POG_1995to2007.jpg

Thanks to id5 for that one :D

 

 

Notice how the end of the year tends to see large price increases, after the slow summer months.

 

Certainly very interesting times.

And potentially a fantastic opportunity for anyone with cash to safe guard.

 

Jim Sinclair started the year saying seasonality was not important this year. Obviously he was wrong on that one this time. But you never can tell. So IMO don't rely on seasonality, but don't dismiss it either.

 

Share this post


Link to post
Share on other sites

what follows here is someones concern with dealing with bullionvault. I think this is very informative and kudos to BV for responding.

 

Lemain - 16 Sep'08 - 12:28 - 47181 of 47253

 

Re BullionVault - can anyone show me, in BV's published information, that a gram of gold exists, at all times, in the allocated name of the client, for every gram of gold notionally in the client's account? It is implied, but the wording that I have seen is far from clear. Furthermore, can anyone show me where it states categorically that this gold is held in the vault chosen (London, NY or Zurich)? I may well be wrong - indeed I have no firm evidence to support my argument - but I suspect that much of BVs instantaneous gold is not actually in its vaults and allocated to a specific client.

 

I tried to get this sorted out on this thread, in public, with the CEO of BV over a year ago and those of you who listened will recall the discussion. No doubt the conversation is still on the thread and you can find it.

 

If some of BVs gold is paper gold then one hopes that the entire scheme is fully insured but the truth is that the gold market is unbelievably narcissistic - things will have to change and will change, for sure.

 

maximoney1 - 16 Sep'08 - 12:50 - 47182 of 47253

 

If 1 gram of b/v gold is 'paper gold' then it is blatant fraud. There whole structure is based around the 'storage of physical gold'....imo.

 

You do have the option to take physical delivery subject to fabrication costs to produce the smaller bars.

 

seems clear to me....,

 

Direct access to the very best prices

 

BullionVault.com changes all this. It enables people from all over the world to own professional market gold and keep it in any quantity in officially recognized bullion vaults in London (UK), New York (USA), or Zurich (Switzerland).

All BullionVault gold is held in Good Delivery form. So when you come to sell, your buyer is able to trust the purity and weight of your gold, which is guaranteed by BullionVault itself because we know that you never had the chance to corrupt it.

So the dealing spread is typically 0.4%, about one-tenth of the equivalent cost charged to private customers for gold coins and small bars.

You can buy just a small portion of a 400-ounce bar. You can trade on-line in increments as small as 1 gram - currently about $20.

BullionVault is not a unit trust / mutual. There is no 5% front end subscription load. When buying gold you pay a commission whose maximum rate is 0.8%, falling progressively when you invest above $30,000 to the spectacularly low rate of 0.02%.

Storage charges are down to wholesale rates of 0.12% pa ($4 per month minimum) with insurance included. That's less than a tenth of the storage fees charged by retail banks, and less than one-third the annual fees charged by typical exchange-traded gold funds (ETFs).

BullionVault customers also save money because they deal directly with each other, willing seller to willing buyer, by using our order board.

You make a further big saving at settlement time too. You don't have to arrange for expensive armoured courier bullion collections.

Your safety & security assured

 

For as long as you own it your gold remains your outright property, stored in specialist facilities reserved exclusively for BullionVault clients and run by accredited professional vault operators who are wholly independent of BullionVault. You choose the storage location :- London, New York or Zurich.

You are truly isolated from the systemic risks in the financial system. You have taken legal delivery of your gold and you own it directly in physical form. Unlike the huge majority of investment products no company's financial failure can deprive you of this gold. Lloyds, Via Mat and BullionVault could all fail - and your gold is still safely yours.

Each and every working day BullionVault publishes on the internet the complete register of all its gold owners - with each owner listed under a public nickname known only to themselves.

This register reconciles exactly to the official bar list published with it. The bar list is produced by the vault operator, independently of BullionVault. No other custody business in the world subjects its records to this continual, daily, public scrutiny.

BullionVault is also the only gold market in the world which stays open 24 hours a day, 7 days* a week.

Because you and all other BullionVault users have a right to sell whole bars directly onto the main market - one of the deepest capital markets in the world - you'll always find a buyer paying a fair price when you want to sell.

You even have the right to withdraw gold from the vault, although the huge majority of BullionVault users leave their gold right where it is. That way they continue to enjoy the benefits of owning Good Delivery gold which - remember - does not leave the professional vaulting circuit. (There may be additional fees, taxes and reporting obligations for bullion withdrawal.)

Any purchase you make is settled instantaneously - we checked the seller had sufficient gold in your chosen vault before it was sold to you. Any sale you make is settled instantaneously too - again we checked the buyer had deposited sufficient money before your gold was bought from you. BullionVault offers nobody credit, so nobody can let you down after you deal.

You can withdraw your money immediately after you sell. Your money will leave your BullionVault client account by the end of the next business day (London time). There is no minimum period for investing.

For your safety - and to obey international anti-money laundering laws - your money is sent straight back to your original funding bank account. Money transmissions to your original funding bank account are fast, safe and low-cost.**

And we make sure you can't make an expensive mistake either. You won't be able to buy more gold than you can pay for, or deal at a silly price. Firstly that's because the system eliminates all of these obvious user errors, but it's also because we invite you to phone us, and we'll talk you through your first deal one button at a time. We check that everything is exactly as you want it while you're still on the phone. You'll be amazed how simple it is.

 

Lemain - 16 Sep'08 - 13:53 - 47208 of 47254

 

maxi -

 

You can't own something "outright" is you are sharing it. You can't own 2, Arcacia Avenue, Bromley, Kent "outright" if 10,000 people also "own" part of it. At the very best, you own a share of something but nothing "outright". Furthermore, if someone is storing it then there is always a contingent liability for storage and insurance costs. For example, if the operating company has failed to pay the storage fees for ages then the storer will presumably reserve the right to charge the "owners" for the unpaid fees? This, to my mind, makes a nonsense of the puff that BV publish.

 

More worryingly, have you seen a copy of the Galmarley Limited (owners of BullionVault) full set of audited accounts? Who are the auditors? Were there any notes to the accounts? When I tried, I was told go get stuffed, or words to that effect.

 

adrianash - 16 Sep'08 - 16:54 - 47243 of 47254

 

RE: BullionVault

 

Dear Lemain,

If our service doesn't interest you, fine. But please beware of libelling us to other users of AdvFn.

 

Full accounts for Galmarley Ltd – trading solely as BullionVault – are audited by Albert Goodman. That information is published both on our website and in the audited accounts filed at Companies House (company number 4943684).

 

http://www.bullionvault.com/help/?FAQs/FAQs_safety.html

http://www.companieshouse.gov.uk/

 

It would cost you £1 to download a set of accounts; it's free to visit our site. Type "BullionVault accountants" into Google, in fact, and click on the very first result. You'll find that Albert Goodman, based in Taunton, also publish a thorough report about our Daily Audit on their own website – a space we could not possibly hope to control:

 

http://www.albertgoodman.co.uk/bullionvault/

 

This Daily Audit is unique in the custody business, and it's available free to all visitors. It shows that the quantity of allocated gold bullion held for our customers by ViaMat International – the privately-owned Swiss storage company we employ in London, New York and Zurich – matches the sum total of customer holdings down to the very last gram.

 

You can view and scrutinise this information without registering or logging in. Each customer's holding is listed against an anonymous "nickname" known only to themselves. Anyone can access the data, see how much a particular customer owns, and then check the sum totals against the Bar Lists issued to us by ViaMat.

 

http://www.bullionvault.com/audit.do

 

You'll also see any outstanding cash balances, held in the client account at Lloyds TSB and regularly valued above US$5 million. So, that's now details of our accountants...the privately-owned secure storage firm we use, based in Switzerland...and our sizeable corporate relationship with the UK's fifth-largest bank.

 

Oh, and we're now full members of the London Bullion Market Association (LBMA). Just last weekend we featured in the business section of the Sunday Times.

 

Sound like we're trying to hide anything from you or our customers?

 

Best wishes,

 

Adrian Ash

Research, BullionVault

 

 

 

Share this post


Link to post
Share on other sites

A few months back on hpc, Adrian Ash countered potentially libellous statements about the company.

 

(Maybe it was coincidence that I came off moderation within an hour of his post.)

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

×