written by reader Best Way to own gold

By xiexgp@gmail.com, July 20, 2015

I want to buy some gold ,but I don’t know the best way to go about it. I would appreciate any or all suggestions on the subject. I know I dont want to own the actual gold. I live in Tacoma,Wa which is rife with criminals wanting to steal it.

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Travis Johnson, Stock Gumshoe
July 20, 2015 12:32 pm

If you want gold for an “end of the world” kind of scenario, where you think there will be no more dollars and zombie hordes will be roaming the fields looking for brains to eat and gold will be the only remaining currency, then it would have to be physical gold that you have nearby — that’s what the “end of the world” folks pitch, because they believe “electronic gold” that’s in storage somewhere and traded as a derivative (like futures contracts) will be wiped out in armageddon — or seized by the government, perhaps, since the rallying cry of many gold enthusiasts was the seizure of gold by President Roosevelt 85 years ago. (There’s no reason for that to happen again, but never say never — that was done to create inflation and try to add liquidity to the system, and had to be done because of the gold standard … we don’t have a gold standard anymore, and liquidity is abundant and forced down our necks by the Fed as they try to create inflation).

If you don’t care about owning physical gold coins or bars in a safe deposit box or something like that, you can take the next step and buy allocated storage — an account where you have a specific amount of gold, specific coins or bars in a vault in NY, London, Zurich or Hong Kong (or a couple other places) that are yours. You pay more for this, usually, since you’re paying for traceability and storage. Beyond that, you can buy electronic gold that’s not specifically allocated by bar to you through some gold trading and storage services, or you can buy one of the exchange traded funds that holds gold (and sometimes a bit of gold futures contracts to manage liquidity), like GLD, which is the biggest one.

I don’t personally worry very much about allocated vs. unallocated or held vs. stored or paper vs. physical — I hold some physical gold and silver, which I consider a form of savings, and for that I like APMEX as a dealer (but there are many others who are fine as well, I’m sure), and I would also have no qualms about holding GLD if I just wanted to have an easy, liquid investment that tracks the price of gold extremely closely.

Hopefully if other folks have favorite gold investment vehicles, they’ll chime in. Thanks!