[Last updated January 2015]
Many people take a DIY (do-it-yourself) approach to storing their physical precious metals. By this we mean keeping them discreetly at home or at some other property (such as garage or self-storage) or held in a safe deposit box somewhere. We discuss each of these options in this section. The other option for physical metal storage is some form of Bailment.
If you have a secure permanent residence, with good privacy and have only a few ounces then keeping them strategically dispersed around your property makes sense. That is, as long as you remember where they are. And as long as you don’t brag about your stash down at your local drinking establishment.
Another self storage option is so-called ‘midnight gardening’ – the activity of discreetly burying treasure. We believe a lot more people than you might imagine employ this option.
If your portfolio stretches beyond say a dozen or so ounces of gold (or silver equivalent) we believe the security risks of self storage outweigh those of using a professional safe deposit service. There are numerous such low-cost and secure services all over the world. Furthermore having your ounces distributed in different countries also reduces the political risk of capital controls and taxation.
A handful of coins in good hiding places around the home for quick access is probably not a bad idea. How many is entirely a personal choice. Perhaps enough to support you and your loved ones somewhere for a few months? Other partially-secure places such as a garage, your workplace or even a rented self-storage locker fall broadly into this category of storage.
The problem with home storage is the risk of home invasion (burglary) and all the horribleness that can entail. The average home safe is an obvious target and won’t stand up to a determined thief. If someone has decided to target you they probably already know where your safe is. A better idea may be to use a fake safe disguised as a household object. These are secret containers cleverly designed to look like brand-name household items such as shaving foam, tinned food or drink cans.
Beyond some ounces for emergency or cash-flow purposes we strongly recommend not keeping precious metals at home or other partially-secure places. Purpose designed safe deposit boxes and even a spot of ‘midnight gardening’ are better DIY storage options.
Safe deposit box
High street banks in the UK, North America, Europe and elsewhere stopped being useful years ago. Some still offer safe deposit boxes for their customers. However these are being phased out and thus not an option for new customers. Even very wealthy customers are finding these services are being withdrawn. Arranging insurance for the box contents may not be straightforward either. In any case nowadays, keeping your precious metals in the custody of a bank is too risky.
“..nowadays, keeping your precious metals in the custody of a bank seems a bit too risky”
The difference between bailment and a safe deposit box lies in the fact that the safe deposit box provider cannot handle or manage the goods for you. The following are lists of non-bank safe deposit companies. They offer safe box services as their primary business. There are others located around the world. Some are in duty-free zones or bonded warehouses and can offer that additional benefit to customers. None on our lists below are recommendations and you should do your own due diligence before using any of these services.
Guardian Vaults (Australia)
Das Safe (Austria)
The Storage (Hong Kong)
Sentinel Vaults (Ireland)
VaultMax Global (Panama)
Certis Security (Singapore)
Security Center New Orleans (USA, LA)
Fort Box Uruguay (Uruguay)
The following companies offer safe box services plus they also have partnerships with precious metal dealers. They can arrange for purchase and safe deposit of your metals, and thus may offer some bailment-like aspects to their services.
Caribbean pirates did it. Indian brides still do it today. And no doubt a few intrepid hikers in the Australian outback, Canadian bush or Swiss Alps do it as well. ‘Midnight gardening’ is the tongue in cheek term given to the activity of discreetly burying gold treasure (it has other meanings too). Today’s midnight gardeners have the added advantage of highly accurate GPS devices – no more ‘X marks the spot’ on maps. We believe a lot more people than you might imagine employ this storage option.
If you own private land or are familiar with a large and remote national park this is a realistic option. For the price of a good GPS device, some containers and a shovel you could safely and at little cost store a significant amount of wealth. Seal coins in waterproof coin tubes (non-PVC) then place in durable plastic construction pipe with caps to seal the ends and make water-tight. Place deep in ground. Make sure not to put metals directly next to anything PVC as this type of plastic can breakdown over time and leave a damaging residue.
Alas, we must confess to not having much information to add to this particular storage option. We would humbly suggest that at the very least you should buy a reliable GPS device. Also because silver unlike gold does corrode and it’s value-to-mass ratio is so much lower than gold, it would be less desirable to store silver in this way.