Recently by Jeff Clark: What You Need to Know About Buying Silver Today
One of my best friends recently discovered, to his shock and dismay, that five one-ounce gold coins had been stolen from his home. I feel especially bad because I had encouraged him to buy some physical metal, giving him some tips and pointing him to the better dealers.
Whats especially disconcerting about the theft is that my friend had the coins stored in a safe, hidden from view, securely locked, with the key hidden. He thought his gold was safe, a reasonable assumption given the precautions hed taken.
But all those measures werent enough. Based on what he knows, he strongly suspects it was a relative, partly because of this persons background and partly because they were one of few familiar enough with the house to know where the key might be. The police unfortunately dont have enough evidence to make an arrest fingerprints, for one, couldnt be successfully lifted from the safe.
My friend was in shock for several days. While it didnt represent all the gold he owned, its not insignificant; with gold at $1,400/ounce, thats seven grand the thief made off with. Hes further consternated by how it went down; the robber only took part of his stash, evidently to make it look like his gold hadnt been disturbed. The key had also been put back in its place, and for this reason he cant pinpoint a specific time period the coins were stolen.
The cost to him has been more than monetary; he loved his bullion coins and had collected at least one from almost every country that produces them. He told me he occasionally took them out of the safe because they were, in his words, beautiful and I just loved the weight of them in my hand. His stash was starting to build up to a point where he had enough savings for almost any emergency. The pain deepened further when he learned that thanks to current IRS rules, he cant even write off the loss. (Hes forgoing a homeowners claim, given the industrys reputation for dropping customers for making small claims.)
Needless to say, my friend is no longer storing his gold (and silver) in that safe. Hes the kind that would normally shy away from using a bank safe deposit box, but not anymore. Even with that, though, he knew this method wasnt perfect and so explored all his options. Hes decided to follow the suggestion I outline at the end.
After the dust settled, he told me that yes, he felt violated; yes, hes still angry; and yes, its made him suspicious of others around him, a feeling he hates. But what I suddenly realized, he said, was how valuable gold is becoming again. Its not a barbarous relic anymore its not a pretty coin or a hunk of metal or a commodity or even an investment. It really is money, and its scary to think how dicey things might get when everyone sees gold as money again.
My friend is not poor; there were other valuables the thief couldve snatched. He took the gold.
So what about you? How safe is your safe? Are your clever hiding spots clever enough?
Heres a quick checklist of the three most common places to store your gold. My friend overlooked one of the basic rules of home storage, so I hope youll review where and how you store your precious metals so that you can avoid the same pain and loss he experienced
Safe deposit box
The easiest and simplest way to store gold is in a safe deposit box at your local bank. If you go this route, use a local bank. You want to be able to get to your gold in an emergency, which is one of the reasons you own it in the first place. So dont keep it in a different state or a distant city. Keep it close.
However, as my friend acknowledges, a safe deposit box isnt perfect. First, your access is restricted; you can only get to the gold during regular banking hours. Second, safe deposit boxes are not insured against robbery. And last, a bank box compromises your privacy. It provides a generous clue for the government, in case it ever decides to repeat FDRs 1933 confiscation of gold.
A related option would be to use a depository or private vault. Theyre outside of the financial system, though they tend to be on the expensive side. And theyre not plentiful, so you may not live near one.
This is where the term midnight gardening comes from; people bury their gold at night so others wont notice the digging. The alternative is to find a separate reason for the excavation, such as fixing a pipe or removing a stump, and work in the daylight.
Either way, before those of you who are used to clean fingernails pass on this method, consider its advantages: it wont be damaged in a fire, and a burglar would need to know where to dig. A lot can happen in the world that wont disturb buried gold.
A few practicalities, if you decide to go the shovel route. First, use the right container, something airtight and waterproof. This is especially important if you are storing numismatics or are burying silver in any form. Weve been told those water bottles that hikers use work pretty well, but choose one heavy enough to stand up to years of erosion and persistent insects. Another choice is a small section of PVC pipe from your local hardware store; cap the ends and then bury it in a shallow puddle of cement.
Dont use a coffee can, since the color on the metal can bleed. To protect from scratching, put each coin in a plastic baggie or something similar.
Where do you bury it? Your location should be neither too easy nor too difficult to find. Not too easy, so that the gold wont be found by a thief. But not so difficult that years later, you or your heirs have trouble locating it. Complicated instructions (including treasure maps) can get muddled with time and create the risk your gold will never be dug up.
Find a place, on property you own, that youll always remember but that isnt obvious if someone learns youve buried something valuable.
Keep in mind that most modern metal detectors can operate to a depth of about 4 feet for objects as large as a stash of coins or bars. Theres also ground-penetrating radar, used primarily by forensic investigators, that can detect where digging has occurred, as well as satellites that can pinpoint where ground has been disturbed.
Hide it in your house and/or use a home safe
Indoor storage is practical for smaller quantities. You can probably think of dozens of places in your home where no one would think to look. Avoid any place obvious, such as a jewelry box or cookie jar. The disadvantage of this method is exposure to, as my friend can tell you, theft, along with fire, flood, and other natural disasters.
Consider using a safe, ideally one secured to the floor. As one dealer said, A safe can be brought in on a two-wheeler and taken out on a two-wheeler, if it hasnt been attached to a building or at least hidden. Ive heard good things about Liberty safes, and they have a replacement guarantee. For obvious reasons, my friend is now gun-shy about using a safe with a key lock.
If you use a floor safe, locations for it include the garage, under a refrigerator, or anywhere you can place something over it. Another option might be under the floor of a storage or garden shed; you can both install and access it without being seen, day or night. We recommend installing it yourself, and some of the kits make it easier than you it might expect. We wouldnt hire a contractor.
Before you buy a safe, however, I recommend reading this article from a veteran bullion collector: How Safe Are Safes? (If you cant log in because youre not a BIG GOLD subscriber, why not try it today risk-free for only $79 per year? Details here.)
Leave the right trail
However you store your gold, let exactly one person know the details. It needs to be someone in whose honesty and discretion you have complete confidence. It will be that persons job to access the gold if you are incapacitated or die. If you are using a safe deposit box, his or her name should be included in the box registration, and they should know where to go to get the key.
Tell one person, but only one. No one else should know. This is especially important if youre using home storage. You dont want to come home someday to find your house turned upside down because someone heard youre living in a treasure chest. Even worse would be to come home and find a looter waiting to have a chat with you. My friend kept quiet about his gold, but admitted some family knew about it. Thats all it took.
Theres just no other way to say it: Keep quiet about your gold.
Unless youve reached a point in life where you are depending on your children for help with your affairs, a child is not a good choice as your gold storage confidant. Kids talk, and you dont know whom they might tell or how far the story might travel.
But you do need to tell someone, regardless of your storage method. I heard of an old miner who no kidding left a treasure map for his kids, to help them figure out where hed hidden his gold. But someone else found the map and his kids never got their inheritance. And what if the kids had received the map but werent very good treasure hunters? Ive read similar stories about descendants who knew that gold had been left for them but had no idea where it was.
What if more than one person already knows you have gold? Review your home storage methods to be absolutely sure they are adequate, or use one of the other methods.
So whats the best place to store your physical gold? Well, your choices boil down to three: store your gold in a safe deposit box, bury it, or hide it indoors. Each method has pluses and minuses, but probably the best method is a combination of them all. In other words, diversify your storage locations. My friend couldve been wiped out if the robber hadnt been trying to be sneaky.
Last, dont let this scare you off from buying bullion. Its still the asset that offers the best monetary protection for the foreseeable future. Not owning it may leave you feeling robbed when you go to use your paper dollars and find they wont buy you as much as you thought. Thats not a theft you can prevent unless you own gold.
Today it is more important than ever to allocate some of your portfolio to gold and silver. Right now China, Russia and other countries are plotting to dump the U.S. dollar and they have started to hoard gold in never-before-seen amounts. Dont wait until its too late to jump on the runaway gold train watch this free video for more information.
Jeff Clark is editor of Casey's Gold & Resource Report in Casey’s Daily Dispatch.