Posted on April 14, 2023
Owning precious metals has been a life-changing experience for me. Over the last 14 years of being involved in the precious metals space, I have come to appreciate the values and traditions of the industry and of the people that make up this very special community. And I have made many, many friends that I will have for a lifetime. One thing you realize when you begin this journey of precious metals is that it is not just about the investment itself; it is about the reason why the investment is important.
Owning precious metals is not just about saving money and fighting inflation. It includes a belief that physical metals are a part of the world we live in while being a confirmation that natural economic law exists. And with that belief comes the idea that honest money and commerce are a vital part of our society.
We often get distracted by the economic times of the day and forget the reasons why gold and silver are truly important. I believe that they are a representation of the blood, sweat, and tears of the people who mined and minted them. And about the communities that the metals serve as a store of value and medium of honest exchange. They are the bedrock of a thriving and opportunistic society.
But owning precious metals does come with certain risks. Chief among them is where to store them. Being the ultimate store of value, gold, and silver will command premiums during economic downturns. Public awareness gets raised during these times as mainstream media moves towards recommending gold as an investment. Those that own them can become suddenly interesting to those members of the community who had not begun investing. This scenario then repeats during the maturation of each economic cycle.
There are alternatives to owning the metals at home which consist of the following common choices. Let’s talk about these options and the pros and cons of each.
We will start by discussing burial or developing a remote cache. This method is often popular in the prepper community, one made of survivalists and others that prepare for economic downturns. They can also be a cheap and effective method for people without a lot of money to pay storage fees to someone else.
To develop a cache, one simply finds a remote spot and buries the metals in a place that is not likely to be discovered. In some cases, this can be on the owner’s property, or in others in ‘the wild’. However, this method has led to some forgetting where their metals are buried or others finding them and digging them up. I will call this the ‘ad-hoc’ option with the least amount of overall safety because it just relies on obfuscation as its main security control. Having been a security professional for many years, I do not prefer this option as a good, long-term solution.
Storage units are another choice. I have followers who have used this method while they decide how much precious metals they want to own and who ultimately provide security. This is often the choice of the early-stage PM investor looking for a safe and secure method outside their home.
The problems with this choice range from low levels of exterior security to poor quality security monitoring. Not only that, but storage units are in highly trafficked areas that are more likely to get your metals discovered. Storage units are put in these high-traffic areas on purpose; it is the drive-by-foot traffic the stores are looking for. This is hardly an effective private option in the long run.
Bank deposit boxes have been a popular choice for precious metals investors wanting more than a few ounces at home. They are popular, readily available, and easy to access during normal banking hours. There are concerns about this option, however.
First, banks are not open at all hours of the day. Therefore, retrieval is limited to certain hours, minus weekends and holidays during bank closures. In a normal scenario, this is not a big detriment. We use our precious metals only when we need them, otherwise, it is perfectly fine to leave them stored behind lock and key.
The problem with safe deposit boxes is that they are not accessible at all hours of the day when we really need them. Banks can be shut down during lean economic times. Our recent articles on Signature and Silicon Valley Bank have brought the reality of bank failures into the limelight. Should we trust our metals to be stored in floundering businesses that serve as one of the reasons we want to own them in the first place? That doesn’t seem to make a lot of good sense if I am being completely honest.
Now we come to the professional options for precious metals storage. The vaulting industry developed over time to serve investors with more than a small stake in gold and silver. In fact, these options also often provide the option to expand into platinum and palladium as well.
This option is much more robust in terms of physical security as well as serving as a convenient source to buy the metals. They can eliminate the need to find separate retail metals and storage providers while providing a much higher level of security and peace of mind to the owner.
And while storage options allow for scaling up of precious metals investment for more experienced investors, they are often also the best choice for early-stage metals owners that have not developed enough market knowledge to know where to buy and store their purchases. In other words, professional storage options remove the insecurity around physical ownership at home, especially for first-time buyers.
We have two basic options. One is readily available, and the other is local and somewhat elusive to find. I will talk about the second option first. This option represents local secure vaults which I am fortunate to have as an option where I live. A local vault is often just a building retrofitted with secure doors, cameras, loading and unloading areas, and a vault or series of safes that store valuable items.
This option can be used for precious metals storage, but also for any high-value item such as artwork or other antiquities. Therefore, the market for this type of vault is often robust enough to find plenty of support in the larger communities. But this option is expensive to develop and run, and not often supported in every city. Small communities and towns will likely not have access to this option.
The other risk with local vaulting options is that they can be confiscated. I have read two stories in the last 6-7 years of local vaults being raided by authorities for illegal substances. Essentially, drug dealers and other illicit businesses use these vaults as part of their business model. After all, local vaults are often completely anonymous and can be paid with cash. They tend to attract those elements of society that need to lay low in their day-to-day operations.
Lastly, we have the professional precious metals vault. These vaults are often started by larger businesses that accept investment globally. The metals are provided by the vault storage provider in most cases, though intake of private metals can be an option. The latter is often limited and subject to additional metal verification procedures upon intake, which can add to the expense.
The benefits of these options are that they completely remove the concerns about private storage away while also providing an easy source to the buyer who does not have to worry about shipping or any logistics of handling the metal at all. First-time buyers of gold and silver can quickly see the benefits of using this option.
Additionally, professional vaults often remove the criminal element and reduce the chances of local authorities getting involved. In fact, most professional storage options are certified to run their businesses, are frequently audited, are registered with the local authorities, and have developed business relationships around the world. They are well-respected and have a good track record of safe storage for many, many years.
Further, while professional storage can be more costly than the more basic options discussed earlier, these costs provide many benefits to the investor that they cannot get anywhere else. That is why many people, from first timers to experienced veterans, turn to the professional vault option.
Entering the picture is a new, trusted product from JM Bullion which I am going to discuss next. I am excited about this opportunity because of the strong track record JM Bullion has for providing metals to the community. CyberMetals offers private and secure storage through a trusted bullion provider.
CyberMetals goes beyond traditional precious metals investing by allowing you to buy and sell vaulted gold, silver, platinum, and palladium at a low, fixed premium. The service can be managed by web or by using a mobile app, so it is highly accessible to all generations of users. And storage fees are low and very reasonable because the overhead of the business model is lower than other industry options.
CyberMetals customers can redeem their physical precious metals through JM Bullion at any time. This is perhaps the most exciting part of the deal for me. I love the fact that JM Bullion has built a completely integrated system for purchase, storage, sale, and redemption. Takes the guesswork away!
Lastly, customers can set up an automatic purchasing option that acts as a physical metals savings plan. Know how much you must spend every month? Great, this option has a way to automate those purchases for you.
CyberMetals is highly accessible and beneficial to anyone. I think you will find it to be quite an attractive option in your search for safe precious metals storage.