A recent surge in gold prices has prompted a reevaluation among collectors of how best to safeguard their precious holdings. With the spot price of gold exceeding $3,700 per ounce, despite a slight dip following a Federal Reserve rate cut, the value of gold has skyrocketed over $1,000—or 38%—just this year. This dramatic increase highlights the need for collectors to adopt more secure storage practices, especially considering that two years ago, the price was only about half of what it is today.
Most collectors are opting for personal possession solutions rather than relying on banks. Stefan Gleason, CEO of Money Metals Exchange, noted, “About 95% of our customers want personal possession.” This inclination underscores the challenges and risks associated with gold ownership, including the ease with which gold can be misplaced.
Gleason provides several strategies for securely storing gold. For those with smaller collections, keeping the gold in a home safe is a common approach. However, choosing a less conspicuous location is advisable, as a safe could attract potential thieves. Gleason suggests that if collectors decide to hide their gold, they should disclose its location to a trusted person. “If they’re going to hide it, they need to have a trusted person who knows where it is,” he cautioned, emphasizing the importance of sharing this information in case of unforeseen circumstances.
Potential risks also arise with home insurance policies, which often offer limited coverage on valuables like gold—sometimes as low as $200, according to USI Insurance Services. For collectors with larger amounts of gold, a more secure option is to utilize a trusted depository. Gleason explained that as collections grow in both size and value, it becomes increasingly important to store them outside the home.
While safe deposit boxes at banks are an option, the Federal Deposit Insurance Corporation (FDIC) does not insure the contents, making it a less appealing choice. Furthermore, accessibility is limited, and some institutions may prohibit storing certain items like coins and bars.
Specialized companies offer storage services for precious metals, often charging a fee based on the value of the holdings. Money Metals Exchange, for example, provides a secure facility in Idaho where customers’ gold is stored in one of thousands of containers. Gleason reassures clients that every time a container is accessed, strict auditing procedures are followed to ensure security.
Regardless of whether collectors choose to keep their gold at home or in a depository, a fundamental principle remains: confidentiality. The more information disclosed about the amount of gold owned or its storage location, the higher the risk of theft. Gleason advises against discussing gold holdings with neighbors or anyone who doesn’t need to know, saying, “Part of security is keeping your mouth shut.”
As gold prices continue to rise, these precautions will become increasingly important for collectors looking to protect their investments. The current market dynamics serve as a reminder that while gold can be a valuable asset, its security is paramount in a climate of heightened interest and potential risks.
