4 June 2015

No Cash allowed in Safety Deposit Boxes War on Cash heats Up

One of the biggest questions that precious metals investors have to answer is how to  store the metal after you have purchased it, especially if you own large quantities of Gold or Silver. In the recent past, many have recommended safe deposit boxes in banks as a suitable storage location for the metals.

However, things have changed since the announcement in April from Chase, the largest bank in the US, on their new policy for clients who rent safe deposit boxes. One of the key changes is the new rule regarding cash and coins. 

The quote below was taken from a ZeroHedge article in April regarding the “updated safe deposit box lease agreement” for JP Morgan Chase. “Contents of box: You agree not to store any cash or coins other than those found to have a collectible value.” 

It is not known how Gold and Silver coins fit into the new policy and whether it still makes sense to use safe deposit boxes for precious metals storage.

With the war on cash accelerating, no doubt that more banks will adopt similar policies on the contents of safe deposit boxes. Should there be more bank failures in the future it is unclear how depositor accounts and safe depot boxes will be treated. Therefore it is prudent for precious metals investors to consider their storage options.

Physical Gold and Silver is Still the Best Option

With all of the different options of investing in the precious metals some investors choose paper Gold and Silver because it is the easiest and most convenient way to gain exposure to the metals. However, this convenience becomes a big disadvantage when the investor does not have true ownership of the physical metal.

As we have written in the past, one of the biggest potential risks when dealing with banks and financial institutions is counter party risk. A problem with one major financial institution could be systemic. The point is that paper contracts can be defaulted on, which is why owning the physical metals makes the most sense. 

For investors who are interested in owning physical Gold and Silver but do not know how or where to store it, the good news is that more and more high quality private vault facilities are becoming available for precious metals storage. 

These facilities exist in many countries throughout the world. As demand for Gold and Silver increases in the coming years private secure vault facilities will only increase in number. So do your own research and see if this option may be right for you.

Author: celticgold.eu

Older Liquidity Risks Growing Newer CelticGold Market Report 7th June 2015