One thing that is quite apparent when looking at investing in precious metals is that there is a lot of volatility. The US dollar price of gold is up and silver is up on one day, the next day gold might be up and silver is down, the next day they are both up and the next day they are both down! Arghh then when should you pull the trigger and invest in gold coins? And when should you invest in silver coins?
Or Is a Gold IRA the best route?
A precious metal based IRA is a method of holding your gold coins (and silver coins) in a remote storage location (called a depository) which is fully insured and avoids the potential tax implications of transferring your hard earned wealth into precious metals.
While there is some cost involved in either swapping an existing IRA into a precious metals IRA it may not be as costly as you may imagine. And in times of financial flux like we have now it could be a perfect way to protect your wealth from a looming recession or even a depression if the petrodollar is replaced by a new BRICS nation currency and Brazil, Russia, India, China and South Africa all decide to dump their US dollar holdings.
If (or when?) this happens all dollar denominated assets will ultimately crash. This includes all stocks and even ETFs that are supposed to be pinned to the value of a commodity. Fact is that ETFs can be heavily manipulated and can fail in the case of a large swing in the value of the commodity.
After all there is one commodity that is poised historically to be the savior when fiat currencies are failing and that is gold. Silver can also be another failsafe but it’s also very heavy when we are talking about a large store of wealth so if you’ve been saving for a long time, gold might be the way to go (along with a mix of some silver as well).
Self Storage or Depository?
You might be in a position to hold some of your wealth in gold and silver coins on your property but the risk of that that is quite strong is theft. Your other option is to use a depository that can safely hold your precious metals wealth and keep it insured.
This is not the same thing as investing in a gold ETF. You’ll pay a bit more for physical gold but then you know that gold is there when you need it and you can take delivery from the depository at any time. Typically you’ll simply pay a quarterly fee for the secure facility to hold it based on the current value of the gold and silver they are holding for you.
The fees are actually pretty reasonable considering what they are holding for you. Of course since they are based on the current value when the price of gold and silver spikes up and stays high for a significant amount of time the cost for the depository to hold it will go up (because they have to pay more to insure it and keep it secure) but this means you will still have significant wealth when the rest of the economy is crashing so is this worth the investment?