Physical Gold and Silver
Not an investment case. Insurance against the currency losing value and against the system shaking, held in a form that does not need a bank to be open.
Gold, the long view
Key dates
- 1971
- Nixon suspends dollar convertibility to gold. Bretton Woods ends and the dollar floats. Gold stops being the anchor and becomes a price.
- 1980
- Peak near 850 dollars in January, on double digit inflation and the Hunt brothers cornering silver. It takes 28 years to see that level again.
- 1999
- The Washington Agreement caps central bank selling. The UK had already begun selling roughly 400 tonnes into the bottom of the market.
- 2010
- Central banks turn net buyers for the first time in two decades, and have not turned back.
- 2011
- Runs past 1,900 dollars in the aftermath of the financial crisis, then falls for four straight years.
- 2022
- Central bank buying passes 1,000 tonnes a year and stays there, led by China, Poland, Turkey and India.
Buy it or store it
Goldbroker sells allocated metal held in your own name, stored outside the banking system in Zurich, Singapore or Toronto, with the option to take delivery whenever you want it. Allocated means specific bars, listed by serial number, that are yours rather than a claim on a pool. They publish the buy price and the sell price side by side, which is the first thing to check about any dealer and the thing most of them will not do.
Go to GoldbrokerKey facts
- LBMA good delivery is the list that matters. A bar from a refiner on it prices instantly, anywhere.
- The names to look for: Valcambi, PAMP Suisse, Argor-Heraeus, Metalor, Perth Mint, Rand Refinery, Royal Canadian Mint.
- Purity is 999.9 for gold and 999 for silver. Below that it is jewellery or scrap, and it is priced as scrap.
- Keep the assay card sealed. A bar out of its card needs testing before anyone will price it.
- Serial numbers appear on the bar and on the card. They have to match.
- Sovereign mint coins carry a face value and legal tender status, which is why they cross a border more easily than a bar.
- In the UK and most of the EU, investment gold is exempt from VAT and silver is not. That gap is roughly a fifth of the price before you start.
- Buy from a dealer who publishes both prices. If nobody will quote you a buy price today, you do not know what you own.
Silver, the long view
What the spread costs
5to 10 percent, round trip
You buy above spot and sell below it. Low single digits each way on large gold bars, far worse on small silver coins, where the premium can exceed a fifth of the metal. Spot is the reference price and nobody trades at it.
Units that sell anywhere
- Krugerrand, one ounce. The most traded gold coin there is.
- Canadian Maple Leaf and Austrian Philharmonic.
- British Britannia and Sovereign.
- American Eagle and Buffalo.
- Bars from LBMA good delivery refiners, in sealed assay cards.
- Fame is liquidity. An obscure bar needs an assay before anyone will price it.
The exit
- Buy from a dealer who publishes both the buy and the sell price.
- Keep every invoice. Provenance is part of the value and part of the tax position.
- Recognised units sell the same day. Anything else waits for an assay.
- Know the name of the buyer before you need one.
- If you cannot say how you would sell it inside a week, it is a decoration, not a reserve.
Where it sits
- 01Water. Three litres per person per day.
- 02Food. Two weeks that needs no power to cook.
- 03Medicine. Everything anyone in the house takes daily.
- 04Cash. Small notes, split across three places.
- 05Then metal. It does nothing in the first week.
Where it goes
Nothing here is financial advice, and this site is not licensed to give it. What is above is what the physical form does, what it costs to hold, and what the record shows.