More on Buying and Owning Gold


There is a company (there could be more, but this is the one we know about) which makes 24kt (pure gold) jewelry.  Most gold jewelry has much less gold in it.  The thinking is that when the government confiscated American’s gold in the past and made it illegal to own gold coins, they did not attempt to take people’s jewelry.  This company, The Heirloom Collection, can be found at  http://www.heirloom24k.com/ .

Owning such jewelry would be most similar to owning bullion but would not be quite as recognizable and so might be slightly less exchangeable.  But on the other hand, pure gold jewelry would be easier to break into smaller pieces if need be and can also be worn for an added benefit if you find it attractive.   Of course you must pay for the fact that it is handcrafted.  The markup isn’t as big as you would usually find for handcrafted jewelry, but it is much more than for bullion.  As an example only (because prices change daily with gold spot prices), if gold is at $1125, a one ounce piece of jewelry might go for between $1,850 & $1,900.

Gold ETF’s

We hesitate to call gold ETF’s savings because they are not as easy to get your hands on (in dire circumstances), but in most situations, they are easy and in fact, not much harder than getting your hands on cash held at an online bank or wire house, so we’ve included it here.

Benefits: Ease of Purchase.  If you have a brokerage account, it is quite easy to buy gold ETF’s that warehouse gold for you.  They pool the amount of gold of all those who have invested.  You can do all of this from your computer.  It is also easier to buy very large quantities of gold if you have substantial assets.

Risks: Fraud, Government encroachment, & Financial System Collapse.  There are several risks involved with purchasing through an ETF.  We’ve seen hints that they don’t always buy the amount of gold they are supposed to hold right when they get new funds in.  This means there is some danger that they wouldn’t be able to deliver the same return as the underlying gold spot price might indicate.

Governments historically love to blame “evil speculators” for the problems that they themselves have created (and ours is no exception having done this many times in the past).  If the Dollar were to fall tremendously (which would mean gold would be shooting towards the moon), the government could easily look to blame this on the speculators of gold and enact some form of confiscation towards gold ETF’s.  There’s nothing that says this will happen, but it is in line with past actions of the US and other governments, so it’s a risk.

If the financial system were to have a momentary collapse or shut down due to crises, you would probably not be able to access this money.  Remember how the markets closed for 6 full days of trading after the attacks of September 11?  This is the best recent example in this country.  We don’t have a lot of examples that remind us that this is a real danger, but in the 19th Century, bank closures were common in this country and they still are today in many countries around the world.  Because our Dollar has been very stable, there has not usually been a need to shut down the system, but this could change if the Dollar became unstable.

Similar Option: There are also closed end mutual funds traded which pool gold &/or silver.  There is one we’re familiar with which holds both gold and silver in one fund.  Closed end funds can trade at a premium or discount to Net Asset Value and because more people are demanding gold recently.

This post is Part 11  in the series A Few Ways to Prepare. To continue with this series, click on Pt 12. To use this as a growth tool to better understand your own calling, you might start by reading Pt 1, Pt 2, Pt 3, Pt 4, Pt 5, Pt 6Pt 7, Pt 8, Pt 9 and Pt 10.

Photo credit: Shalin India

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