Investing in gold bars? Here are the dos and don'ts of physical gold storage.
As a tangible and precious metal, gold has withstood the test of time as a store of value. That's one reason why so many investors are drawn to the idea of owning physical gold — especially in the form of gold bars. Add in the fact that gold can also help you build a retirement nest egg, hedge against inflation and diversify your investment portfolio and it's easy to see why people are flocking to the precious metal.
And, now that news has spread about Costco adding 1-ounce gold bars to its inventory list, it appears that even more people are getting in on the action. After all, Costco can't keep the virtual shelves stocked with the two types of gold bars it's offering, and demand is so high that inventory is selling out in a matter of hours. Luckily, there are plenty of reputable gold companies to choose from, so you don't have to wait for the warehouse retailer's shelves to be restocked. You can easily buy gold bars online and have them shipped to you instead.
But if you're planning to put some money into gold bars, make sure that you understand the dos and don'ts of physical gold storage first. After all, proper gold storage is crucial to protecting your investment and ensuring its long-term value.
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The dos of gold bar storage
Before you purchase your first gold bar, it's important to ensure that you understand how to store them the right way. Otherwise, you could leave yourself vulnerable to theft or other types of losses.
The best practices for physical gold storage include:
Secure storage facilities
When you're investing in gold bars, do choose a reputable and secure storage facility. This could be a bank's safe deposit box, a private vault or a specialized storage service, all of which offer the type of security you need in order to keep your gold investment safe. Make sure the facility has a strong track record and robust security measures in place — and that other investors have positive feedback to offer on the facility.
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Insurance
Do insure your gold bars. Even with secure storage, there is always a risk of theft or damage — and depending on the amount you have invested in gold, that could lead to massive losses. Comprehensive insurance will help protect your investment in case of unforeseen events, but be sure to do your homework and make sure that your gold will be fully covered under any policy you consider.
Documentation
Do maintain detailed records of your gold bar purchases. Keep copies of invoices, receipts and certificates of authenticity. This documentation can be valuable for not just insurance claims, but potential resale in the future.
Regular audits
Do periodically audit your gold holdings. If your gold is stored in a private vault or storage service, ensure that the facility offers regular audits or allows you to conduct your own inspections. This helps ensure the authenticity and integrity of your investment.
The don'ts of gold bar storage
There are also a few things you should avoid when you're investing in physical gold, including:
Home storage
There may be occasions in which it makes sense to store gold bars in a safe at home — when you have a low number of bars, for example — but don't be tempted to risk it and store significant quantities of gold bars at home. While it might be tempting to keep your precious metal close by, home storage poses security risks and may not be covered by insurance adequately.
Information sharing
While this may seem obvious, don't share information about your gold holdings with friends or family members who aren't directly involved in or impacted by your investments. Keep your investment details confidential to reduce the risk of theft or fraud.
Low-quality storage
Don't compromise on storage quality to save on costs. Cutting corners on security or choosing unverified storage solutions can lead to significant losses. And, considering how valuable your gold bars are, it's simply not worth the risk to save a few dollars on storage costs.
Mix with scrap gold
Don't mix your investment-grade gold bars with scrap or jewelry. Keep your investment gold separate to maintain its purity and value.
Neglect maintenance
Don't forget about your gold once it's stored. There isn't a ton of maintenance required with gold bars, but you should still periodically check on your investment, ensure it's in good condition and update your insurance coverage as necessary.
The bottom line
Investing in gold bars can be a sound financial decision, especially during times of economic uncertainty. However, the safety and security of your investment depend on proper storage practices. By following the dos and don'ts outlined in this article, you can help ensure that your physical gold remains a valuable asset for years to come. Remember, gold is a long-term investment, and proper storage is an essential part of preserving its value and integrity.
