Check out this gold investing alternative!

by admin on December 24, 2007

Dear readers,

Register your Bullionvault account now!A few months ago, I’ve shared with you how you can invest in gold. Recently, I’ve just found a new alternative to invest in gold.

Check out Bullionvault.com, an online gold investing platform. Bullionvault is where gold investors visit to buy gold for storage in a professional bullion vault. The process is secure yet straightforward, and prices are competitive.

When considering investing in gold with online or offline platforms, it is important to bear in mind the two types of treatment of gold. Technically, they are called allocated and unallocated storage of gold.

Allocated gold
Allocated gold is gold deposited under a safekeeping or custody arrangement. It is held as numbered bars, on labelled shelves, and it is the property of the individual owner. Even though it is held in a vault it is neither the property of the bank nor the liability of the bank. As such it is safe from bank insolvency. Investors have to pay for the storage of allocated gold. Arranging for the physical security of bullion bars requires strong vaults, wise use of technology, carefully constructed systems for security, and the monitoring and control of human factors. All institutions that offer allocated gold investing will charge storage fees.

Unallocated gold
Unallocated gold (frequently held in accounts referred to as “pool”, or “metal” accounts) is simply the provider’s liability. It forms part of the working capital of the bank and it can be legally used by the bank for profit. The gold investor is therefore exposed to the insolvency of the bank. It is important to note that because gold is not a currency, the depositor is not ordinarily subject to any degree of depositor protection. Unallocated gold’s free ‘storage’ is a bit of a misnomer because it is quite likely that there will not be anything tangible to store. This is why unallocated gold is more aggressively marketed, and being generally free for ‘storage’, is more popular than allocated. After all banks do not store the money in our bank accounts; they put it to use.

As for Bullionvault, they do not provide unallocated gold. All its gold is delivered in physical form. It is held as the outright property of the service’s users. It is available in single gram multiples, and is not required to be moved at the buyer’s expense in settlement of a sale. This generally makes it more valuable to buyers than spot gold.

So how does Bullionvault work? Upon registration, you gain access to Bullionvault’s order board. The order board is directly accessible to you and all other customers, where you can bid for and offer gold in an open and fair competition manner. This is an incredibly powerful system because you get to set your own price. Quality of the gold will never be a thing to worry about because it’s still the same guaranteed quality, warranted by Bullionvault.

Let’s say if other customers are ready to sell their gold below Bullionvault’s own price, you can buy directly from these customers. If nobody is willing to sell at your bid price, you can slowly gap up by bidding nearer to the lowest offer price. When you are ready to sell your gold, you can also offer your gold at a small fraction less the best available buying price and you’ll become the cheapest source of gold for the next buyer. That will greatly increase the liquidity of your gold when you wish to sell them.

Bullionvault operates in three major currencies, US Dollars, Euros, and pounds sterling so you can trade gold using whichever currency that is most advantageous to you. You will also get to choose the location you want to own gold in because Bullionvault has vaults in three locations, New York, London, and Zurich. These three locations are widely thought to be among the most robust defenders of private property rights in the world, both for their own citizens and – notably with Switzerland – for foreigners.

Register your Bullionvault account now and get a FREE gram of gold compliments from Bullionvault!

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