BullionVault

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BullionVault

You want to buy gold - safely, simply, and at the best prices in the world - and you shall, in just a few minutes.

You'll first need some knowledge about gold markets, because then you'll make a better decision, and you'll get a better deal.

We'll explain how the professional bullion market actually works, and how BullionVault connects you to it to get you a safer, simpler route into real bullion gold, at prices you won't better anywhere.

We'll be clear, honest and informative. We'll tell you both about BullionVault and about the other main ways you could choose to buy gold. Why? Because when you've understood them all we think you'll have even more confidence you're making the right choice with BullionVault.

You won't be alone. More than 40,000 people from 83 countries use BullionVault.

In the last two years they bought more gold through BullionVault than through any other direct bullion ownership service in the world.

BullionVault now stores over 7 tonnes of gold, which is more than most of the world's central banks, and every ounce is owned privately, by people like you.

OK then? Now you know you're not wasting your valuable time let's get on with understanding how the gold market works.

Gold Bars, Good Delivery, and the Professional Gold Market#

The most competitive gold prices in the world - the ones you see published in the papers and on the internet - are enjoyed by the participants in the professional bullion market:- gold dealers, refineries, government agencies, bullion banks and the occasional big investment organization.

This professional market only deals in what are known as Good Delivery bars. If you're not trading these bars you are excluded from their market, and their very competitive prices, which means you'll pay more when you buy and receive less when you sell.

Good Delivery bars are cast by a small group of metals refiners accredited by the professional bullion dealing communities in London, New York and Zurich. They are accurately assayed and guaranteed always 99.5% pure gold or better. The market trades their pure gold content (gross bar weight * purity) which is known as fine gold, so no-one who trades professional market bullion ever pays for impurities.

Good Delivery bars have high integrity because they have never been in private storage facilities. From the day they're first manufactured they are kept in bullion vaults recognized and monitored by the local gold dealing community. Every time bars are moved - by accredited bullion couriers - a careful record is maintained, showing continuous storage through trusted hands. This guarantees gold bar integrity in a way that keeping gold at home, or even in safety deposit boxes, simply cannot match.

The result is that a professional buyer's vault will accept deliveries of these bars direct from the seller's vault without re-checking their purity - and that greatly reduces bullion dealing costs. This is why they're called Good Delivery bars.

Good Delivery bars are large - usually 400 troy ounces each (12.4kg), and at $1,000 an ounce that's $400,000 a bar. The professional market doesn't allow you to own part of a bar.

Yet even having enough money to buy a whole bar or two only solves half the problem. You still need that key relationship with a formally recognized bullion vault to look after the gold while you own it; otherwise your gold loses its Good Delivery status and cannot easily be sold back onto professional markets. But those vaults are ultra-cautious and typically don't deal with the general public; and even if you did spend the time, cost and effort of setting up a vaulting account with one of them you'd find the minimum monthly storage fee means you'd need about 15 big bars of gold to get an economic rate for bar storage.

These are the barriers which keep private users out.

Direct Access To The Best Gold Prices#

BullionVault.com changes all this. It enables people from all over the world to own professional market gold and keep it in any quantity in officially recognized bullion vaults in London (UK), New York (USA), or Zurich (Switzerland).

All BullionVault gold is held in Good Delivery form. So when you come to sell, your buyer is able to trust the purity and weight of your gold, which is guaranteed by BullionVault itself, because we know that you never had the chance to corrupt it.

Most people who buy gold don't stop to consider how important bullion integrity is going to be when they come to sell. But it will be critical to the price they get. Too much money is dissipated to intermediaries by people who find out - too late - that low integrity bullion simply does not fetch the spot price.

But on BullionVault - where all gold is guaranteed high integrity - you get the best possible high-integrity bullion price when you sell. The round-trip dealing spread is typically 0.4%, that's about one-tenth of the narrowest spreads usually charged to private customers for gold coins and small bars.

Furthermore you can buy just a small portion of a 400-ounce bar. You can trade on-line in increments as small as 1 gram - currently about $25.

BullionVault is not a unit trust / mutual. There is no 5% front end subscription load. When buying gold you pay a commission whose maximum rate is 0.8%, falling progressively when you invest above $30,000 to the spectacularly low rate of 0.02%.

Storage charges are down to wholesale rates of 0.12% pa ($4 per month minimum) with insurance included. That's less than a tenth of the storage fees charged by retail banks, less than one-third of the annual fees charged by typical exchange-traded gold funds known as Gold ETFs.

BullionVault customers also save money because they deal directly with each other, willing seller to willing buyer, cutting out the middleman.

You make a further big saving at settlement time too. You don't have to arrange for expensive armoured courier bullion collections. All bullion you buy is already in the vault. Moreover when you sell your buyer wants his gold in the same vault, and he frequently pays a small fraction over the spot price for your gold because it saves him the shipping cost.

Gold price - 5 years

Gold price - 1 month

Your Safety and Security Assured#

For as long as you own it your gold remains your outright property, stored in specialist facilities reserved exclusively for BullionVault clients and run by Via Mat - Switzerland's leading accredited professional bullion vault operator. You choose the storage location :- London, New York or Zurich.

You are truly isolated from the systemic risks in the financial system. You have taken legal delivery of your gold and you own it directly in physical form. Unlike the huge majority of investment products no company's financial failure can deprive you of this gold. Our bank (Lloyds TSB), Via Mat and BullionVault itself could all fail, and your gold is still perfectly safe.

Each and every working day BullionVault publishes on the internet the complete register of all its gold owners - with each owner listed under a public nickname known only to themselves.

This register reconciles exactly to the official bar list published with it. The bar list is produced by Via Mat, independently of BullionVault. No other custody business in the world subjects its records to this continual, daily, public scrutiny.

Our auditors produce an annual report verifying the accuracy of this daily reconciliation, and post it on their own website - again, completely independently of BullionVault.

Our storage contract with ViaMat prevents us from removing gold from the vault without declaring the withdrawal publicly on the front page of our website for at least 48 hours prior to the withdrawal. All removals of bullion must be publicly declared or the vault operators are contractually obliged to refuse to release the bullion. No other gold custody business in the world enforces a similarly transparent policy on all gold withdrawals from the vault.

BullionVault is also the only gold market in the world which stays open 24 hours a day, 7 days* a week. You, and 35,000 other registered users, are able publicly to quote buying and selling prices of good delivery gold directly to each other. Only BullionVault lets its customers compete with its own quoted prices to get all users the best possible deal, whether they are buyers or sellers.

Additionally you and all other BullionVault users have a right to sell whole bars directly onto the main market - one of the deepest capital markets in the world. This open linkage to the main market means you'll easily find many buyers competing to bid a fair price to you when you want to sell.

You even have the right to withdraw gold from the vault. The huge majority of BullionVault users leave their gold right where it is. That way they continue to be able to sell Good Delivery gold at spot market prices. Withdrawing gold from a Good Delivery vault will cost you money, but yes you have the right to withdraw your gold from BullionVault. (There are modest fees and anti-money-laundering reporting obligations for bullion withdrawal. Sometimes VAT has to be charged too. None of these apply where bullion is sold in Good Delivery form to another BullionVault user, or - via BullionVault - to any participant on the main bullion market.)

Any deal you make is settled instantaneously. We checked the seller had sufficient good delivery gold in your chosen vault before it was sold to you. Any sale you make is settled instantaneously too - again we checked the buyer had deposited sufficient cleared money before your gold was bought from you. BullionVault offers nobody credit, and settles at the point of trade, so nobody can let you down after you deal.

You can withdraw your money immediately after you sell. Your money will leave your BullionVault client account by the end of the next business day (London time). There is no minimum period for investing.

You don't trust internet security, and neither does BullionVault. So although it runs the most secure protocols available, BullionVault assumes that your account is at risk of penetration, and must be safe if penetrated. Unlike Digital Gold Currency we will not pay anyone but you, and we will not allow any transfer of value to another system user. So, both for your safety and to obey international anti-money laundering laws, when money is withdrawn from your BullionVault account it is sent straight back to your original funding bank account (yours) or otherwise to its verified replacement bank account in the same name.

For the same failsafe reason our Burglar Alarm service can alert you to all log-ins to your account, with an immediate SMS message to your cellphone.

The system is very easy to use and very safe. But, just in case, we invite you to phone us, and we'll talk you through your first few deals one click at a time. We check that everything is exactly as you want it while you're still on the 'phone. You'll be amazed how simple buying gold now is.

This combination of safety, value, accessibility, transparency and service has quickly made BullionVault the most popular direct gold ownership service in the world.

Click here to visit BullionVault now.

Important concerns when Buying Gold#

The critical thing with gold is to take delivery, and in normal circumstances to avoid immediate possession, while making sure you have the right to take later possession if necessary. This is not intuitive to most gold buyers.

Possession#

Many people believe they should take immediate possession of the gold they buy. But for all the comfort that they derive from the feeling of a gold bar in their hand, few who have tried selling a bar from private possession would take possession again. They learned - when they tried to sell - that no-one will pay close to the spot price for small bars or coins which have been in private possession.

Gold in your possession is subject to several disadvantages:-

You will have to accept a significant discount when you sell, because your gold is not in a form which can be accepted by the professional markets as Good Delivery.
You will find that it is very much harder to insure. Gold bars are a favourite with insurance cheats. They get 'stolen' all too regularly, and their insurers have to pay out, making honest people subsidise the cheats with high premiums. On the other hand actuaries know that professionally vaulted gold is extremely safe, and the insurance premium for gold in an accredited vault is spectacularly low.
If you bought gold, and took possession of it, intending to be safe in a crisis you will, in that crisis, find it impossible to spend your gold as if it were money. Take a gold coin out of your pocket today, and try and pay somebody with it, and you will be met with a blank stare. Gold is not currency. You cannot easily use it now to pay for anything. Of course there is a belief that it would operate as currency in hard times, and it remains just about possible. But the empirical evidence is not good. In places in our own times where a currency has broken down - places like Russia, Yugoslavia, Argentina, Zimbabwe - gold did not emerge as a circulating currency and there was no prospect whatsoever of quitting those countries carrying gold. In these circumstances privately possessed gold was at best useless. At worst it can be extremely dangerous.
The truth about gold being used as money is this:- it can be used as money in immensely rich societies (e.g. USA to the 1930s, industrialized Europe to 1914, Spain after discovering America, Imperial Rome, Ancient Athens) but if you try to use it in a crisis torn country you will be selling it to a smuggler - and at a huge discount.

Yet in modern times - and in most cases back through history - an effective defence for moderately wealthy people was gold owned offshore in a well governed country. Far better than gold in your possession is gold which is your property, but which is in a country enjoying political stability, high local living standards, sound finances, and no tense international relations. On all of these criteria Switzerland is near the top of the heap. Even better the Swiss economy is built on its trustworthiness as a home for foreign wealth, and this provides a powerful motivation for maintaining a safe investment environment for foreigners.

So, in most cases you are smarter to postpone taking possession until an emergency makes it absolutely necessary. In the meantime take delivery, but into a professional offshore vault, rather than into your personal possession. Then your gold will both be much safer than in domestic or safe-deposit-box storage, will be far cheaper to insure, and will retain its full resale value. You can almost always repatriate wealth after you've taken it abroad. Exchange controls stop capital flight, not inward investment.

Delivery#

When you buy a standard financial instrument - like a share - you transact a deal, and there follows a settlement process typically lasting a few days. Prior to settlement the broker has the shares and you still have your money, and both of you are obligated to honour the transaction by settling it. That obligation is recognised on the broker's balance sheet. He owes you something, making you a creditor, and you owe him something, making you a debtor too.

While that situation remains it is relatively balanced. What usually follows is a potentially risky but short period for you where you pay the broker, settling the debt and trusting him to transfer title to the shares to you in due course. At this point the failure of the broker is potentially very expensive for you. That's why you must always be careful who you deal with.

After you have paid - and thankfully with pretty good reliability - the broker quickly transfers title in the shares to you. Those shares are now delivered. At this point you stop being the broker's creditor; you are off his balance sheet and now you own the shares.

(By the way, very frequently you won't get possession of these shares, because they are often retained in the possession of the broker even though you own them. They are delivered but not into your possession. This is perfectly normal and safe.)

In law the consequences of delivery are important. If your broker now fails, even if your shares are in his possession, the fact that they have transferred to your ownership, through delivery, is the critical thing. If the broker fails a liquidator cannot sell your shares for the benefit of creditors, he can only return those shares to you. The broker's failure is now irrelevant to you because of your ownership.

Now, there is always a modest cost in arranging final settlement in this way. Yet because of that modest cost, and because investors feel irrationally safe on a broker's balance sheet, nowadays many styles of transaction are arranged never to settle. Instead they are managed by down-payments: futures, spread bets, contracts for difference, unallocated gold, gold pool accounts, etc all leave you on the supplier's balance sheet and exposed to its default. Probably the worst of these are unallocated gold and the balance sheet pool account, because your down-payment is usually 100%, exposing you over the long term to lose all your money if your supplier fails.

The long run future of all credit based systems is failure. That's why safety in gold means getting settled, and getting off the balance sheet. This is not dependent on possession, but it is dependent on delivery.

So however you buy gold make sure to get it delivered, or if you decide otherwise be sure you understand the consequences of the failure of your supplier.

BullionVault is the only gold business in the world which offers 24/7 trading with instant settlement. It can do this because it checks the customer's available money and available gold under its control before a deal is struck. The gold and the money are exchanged within the BullionVault system at the instant of the deal, so at any time 100% of BullionVault gold is fully delivered and settled.

Insurance#

If you try to insure gold yourself you will quickly realize the benefit of helping the insurer assess the risk by keeping your gold in a formal bullion vault. The actuaries' calculation of risk show, beyond doubt, that it is much safer there than anywhere else, and that's why insurance is included in the vaulting charges of most professional bullion vaults.

BullionVault goes several steps further here.

Because the seller's gold is already in the buyer's chosen vault your trades are settled as soon as you buy - and in warranted good delivery form. So:-

You avoid the risk of gold being lost or stolen in transit either to you when you buy, or from you when you sell. (Of course you could pay for the insurance to cover this risk, but do you want to?)
You avoid the worry that you might not find out that your gold was impure until many years later when you try to sell it.

On BullionVault, from the instant you buy to the instant you sell your gold is insured automatically, and the cost of insurance is included in the tiny custody charge of 0.12% per annum. Customers can view BullionVault's insurance certificate on-line at any time.

Certificates and record keeping#

Investors have a strong attachment to certificates. Somehow there is a feeling that an intricate and expensively produced piece of paper is necessarily an indication of underlying value.

It does not always work out this way, and the walls of finance companies everywhere are decorated with large numbers of historically interesting but entirely worthless certificates.

There is no way, other than the surrender of all the certificates in issue, to be absolutely certain that they are backed by an exactly equivalent quantity of gold. All sorts of things can cause this not to be the case:- Duplicates issued in good faith. Deliberate over-issue. Good forgeries. Bad administration. Changes of Address. Cancellation of old classes of certificates and their replacement. Failure to destroy old certificates surrendered, etc.

Certificates are capable of being duplicated about as easily as paper money, which is mildly ironic given the modern day bullion buyer's motivation - which is frequently to avoid the debasement of monetary printing.

There is a better way. Using modern technology it is easy to publish every day an accessible list of all gold owners with an interest in a specific vaulted store.

Reconciled to an underlying bar list this can provide a reliable proof that the total number of owners can claim an amount of gold exactly equal to the vaulted total. Moreover all investors' holdings can be published using a nickname which is known only to them and which, while validating their own holding to them, does not identify them.

This is how BullionVault proves your gold ownership every day. BullionVault customers see the proof on BullionVault's Daily Audit - published every day and linked directly from the BullionVault home page. And for those whose attachment to certificates proves insurmountable we provide an RSS feed of their own digital record - re-issued every day to their own computer, under their own private nickname.

Other Ways of Buying Gold#

Bearing these issues in mind then lets examine the other ways of buying gold.

Gold Coins#

Buy gold coins or small gold bars and you can hold them in your hand, or possibly in a safe deposit box. Your gold is delivered (good), and in your possession (bad in large quantities). You should try to get insurance cover if you buy a significant quantity, but this is not always easy, and of course you have to declare that you own gold in order to insure it, which you might not wish to do.

You will certainly find there is a significant premium on purchase price and a significant discount at sale, and this will dent your profits if you are buying for investment. Expect to lose about 8% this way, perhaps a little more in single coins and smaller denominations, or a little less in bulk.

You could find that you become a trapped owner should a financial meltdown occur. You may also discover your gold is not easily liquidated if - for example - exchange controls are implemented in the country where you live.

In spite of the drawbacks many people who buy a significant quantity of gold for investment offshore do keep a much smaller reserve in coins. This 2006 USA Liberty 'Buffalo' , which is 1 oz and 99.99% pure gold, is owned by BullionVault's director, who thinks that while it may lack the investment efficiency of offshore good delivery bars, it wins on aesthetic quality. He paid a premium of 7% over spot and like most people who own coins has never yet tried to sell it.

It is relatively straightforward to buy gold coins. A search of Google for "gold coin dealers" will quickly produce some suppliers. Watch out for the big difference between numismatic coins and bullion coins. Bullion coins like this one have no value as a collectible, and their worth is based only on their gold content.

Gold Certificates#

Gold certificates are typically unallocated gold with an option to convert into allocated at the investor's option and cost.

The cost of allocating is prohibitive - involving a fabrication cost and an ongoing storage cost typically of 1.5% per annum. This is more than 10 times the wholesale rate for insured bullion storage, and this artificially high rate achieves its primary purpose of keeping the gold unallocated.

That is a convenience for the provider who thus gets free long-term working capital.

As an investor in unallocated gold your gold is on the balance sheet as a liability and you remain exposed to the suppliers' insolvency for the long term. Given the relatively high costs involved there is little likelihood of you choosing to allocate.

Certainly the most well-known and most respected of the certificate providers is the Perth Mint Certificate Program.

Gold Futures#

Trading gold futures means you can buy gold on credit, gearing up your gold investment. But if you buy gold this way, sharp volatility will put you at risk of large losses arising from the leverage.

If you are a short term speculator with a particular view on the gold price, and particularly if you are a short-seller of gold, then you should look at our detailed section on Gold Futures.

Gold ETFs#

The exchange-traded gold funds are a high volume investment vehicle providing exposure to the gold price. They benefit from the familiarity of being traded on a normal stock exchange. If you already have a brokerage account set up then these can be one of the most convenient options for you. However it is well worth your while understanding the key issues from our section on Gold ETFs.

Gold Mining Stocks#

Gold mining stocks face ever-growing problems of politics, cost and geology. Moreover - much to many people's surprise they have very significantly underperformed bullion over the recent past.

The underlying reason for this is that modern attitudes have made gold mining a bit of a pariah in business terms. The shattered landscapes and plentiful poisons left behind by previous generations of miners have created a mistrust by environmentalists and their governments which are now routinely applying very high clean-up standards and costs before granting mining licences.

Governments also frequently require infrastructure and other social benefits to be financed by mine operators - acting as a sort of compensation to local communities. They are well able to assess the value of the mine, and force up the social price to the point where it is only just a profitable undertaking. That means that the profits of mining are now more than ever expended in social works in the country and vicinity of a new mine.

On top of that the rising cost of energy has in many cases been crippling.

The result is that there has gradually developed a premium on gold which is already out of the ground and in its refined form - bullion.

But that does not deny that great fortunes can be made by people who find the right gold mine stock - one with large deposits and low production costs.

If you are interested please read our page on gold mining.

The Best Way to Buy Gold#

We hope you have found this walk through the ways of buying gold to be instructive. We firmly believe that BullionVault offers you the cheapest, safest and most accessible way that has yet been devised.

You can register now, and quickly you'll be owning the gold you seek to protect you from the appalling mismanagement of our currencies and economies.

We respect your privacy. Your BullionVault registration will never be sold, rented or otherwise made available to any third party. All it will do is put you on the road to private, outright gold ownership, in London, New York or Zurich. We think that might make it your most valuable use of the internet this year.

We finish by summarizing the advantages of BullionVault - many of which are found nowhere else.

BullionVault deals good delivery gold - the only gold accepted on the world's spot markets. Your gold is not subject to loss of integrity and marketability while you own it.

BullionVault has no minimum investment.

BullionVault gives you instant access to your money. You can sell gold and redeem cash to your bank account in 24 hours.

When you buy on BullionVault prices are significantly lower than when you buy gold coins and small bars.

When you sell on BullionVault prices are significantly higher than when you sell coins and small bars from private possession.

Only BullionVault offers open price competition, with 40,000 registered users - including you - competing as both buyers and sellers, and publicly quoting their own dealing prices. Competition between so many users greatly narrows your dealing spread. Typical dealing spreads at BullionVault's competitors are $22.00 an ounce. Typical BullionVault spreads are just $2.50 an ounce, and $0.25 is not uncommon.

BullionVault commissions start at 0.8% and reduce rapidly above $30,000 invested , to just 0.02% for larger amounts. For storage you pay a tiny 0.12% per annum - that's less than one eighth of one percent - which includes insurance.

BullionVault is unique in being open for trading through the night and through the weekend.

Unlike increasing numbers of modern gold investment products BullionVault is not based on a complex trust which you need lawyers to interpret. You own gold. It's that simple.

BullionVault lets you buy and sell directly in three currencies: $, £ and €. You do not have to buy US dollars to deal. If you want to avoid your own currency you can sell your gold directly for another, without FX conversion expenses, because BullionVault provides ample direct gold liquidity in all three currencies.

Only BullionVault lets you store in three countries. Switzerland (Zurich), UK (London) and USA (New York). Only BullionVault - with its multiple vaults, and instantaneous settlement - allows you to trade out of one jurisdiction and into another in seconds, as you might well choose to do in response to dangerous geo-political events.

Your account is protected by advanced security technologies, but BullionVault recognises that the internet is not 100% watertight, so BullionVault assumes security is capable of being breached and still protects you. You are protected by your Burglar Alarm, and by the restricted return of your money only to you, at your original funding bank account, or its verified replacement.

Only BullionVault daily publishes a full client reconciliation to 3rd party bar lists and client money bank statements. Only BullionVault has a verification report of its daily reconciliation produced by its independent auditor's and published on their own website.

Only BullionVault publishes its insurance cover certificate.

Only BullionVault has the confidence to give you a free gram of bullion, stored in Switzerland, and allow you to test the system's dealing and custody environment for yourself - entirely at BullionVault's risk.

You can collect that free gram of gold right now. From there you can test the live system, at our risk, by selling your gram, and buying it back.

Once you get registered you can use our interactive help system to ask BullionVault staff any further questions you may have, or by all means call us now, in the UK, on +44 (0)20 8600 0130.