Skip to main content

A little gold bother, but a lot of profit

It has been a truism in the hobby that if you are going to invest in gold, take delivery.

In the 1980s collectors were given a lesson in the importance of heeding this advice when a Florida firm that encouraged its gold buyers to leave the metal with them for safe storage went broke and left behind wooden blocks painted gold as assets.

Obviously, the investors did not make out well.

What to do with the gold itself then becomes a problem. Hiding it under the mattress opens up the owner to theft. Often, the coins end up in bank safe deposit boxes, or in a designated bonded storage facility.

One of these warehouses, located in New York City and run by HSBC bank has told its individual clients to clear out their gold because they want to use the vault for more lucrative institutional clients, according the a Wall Street Journal story yesterday.

Obviously, the gold in the vault is safe, but it becomes vulnerable in the transfer process. This is an inconvenience to the owners.

What’s a gold buyer to do? The most important thing to do is stay mentally engaged with the investment, hire a reputable transfer agent and get on with life.

Is that a bad thing? Not really.

It might be tempting to consider gold as a "buy it and forget it" investment decision. However, every investment should be reviewed regularly.

In the Florida case, the bother of handling the gold was removed from the shoulders of the clients, but as it turned out, the gold was removed, too.

A little bother seems to be a good thing