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Buying Gold and Silver: A BullionVault Review

Company Background

Established by Paul Tustain in 2005, BullionVault is an online peer to peer gold and silver exchange headquartered in West London, UK. BullionVault is fully owned and operated by Galmarley Ltd.

Statistics: Over 55,000 people had used Bullion Vault in buying, storing and trading of physical gold and silver as of February 2015. Between them, $1.3 billion (€1.1bn, £820m, ¥150bn) worth of gold bullion, which is way more than what is held by a majority of world banks, is in their possession. A further £170m ($270m) is held in the form of physical silver.

Why BullionVault.com?

For ordinary people wanting to buy silver or gold, one problem they face is that they can’t phone up their stock broker or even go into their banks to buy it. The availability of gold and silver is limited to coins like the Krugerrand, jewellery and small gold bars. This is one certain way of buying gold but it is rather expensive as selling of coins and bars is at a premium stretching to 20% above the official current price (depends on size and quantity) and buying back is at the same premium but lower than the official level.

Buying bullion in the professional market is the best way of investing in gold and silver as it is cost effective. Nevertheless, for a majority of people this is neither convenient nor practical. Professional traders accept 400 troy ounces each of the Good Delivery bars which makes it impractical and at today’s prices, this would cost you more than $300,000 a time. Also, issues of delivery and insurance are there to think about. It is not possible buying or selling part of a bar in the professional market even for ordinary people having $300,000 to spare which makes it very inconvenient. A person will need to sell a bar entirely even if they could afford one or two just to release a portion of their money when they need it.

Good Delivery is a term referring to bars of gold bullion cast by refiners who are accredited and kept in recognizable bullion vaults. There is no possibility of tampering with these bars as they are never allowed out of secure storage. Professional buyers will thus accept their delivery without checking for their purity. Dealing costs are thus reduced. It is very difficult proving that gold in private hands is what it is as claimed by the seller, and this is the main reason why you will never get a good price for it.

With BullionVault.com you are able to deal in Good delivery gold bullion of professional grade but in bar fractions- amounts as little as a gram- at costs close to professional bullion markets. The site developers have set up a market for such small quantities. The dealing costs have been kept low as every step of the process is automated using very clever software.

Vaults located in New York, London or Zurich are used to store the actual gold and silver possessed by BullionVault clients. A person chooses where they want their gold to be kept when they buy it. The popular location amongst these is Zurich as most people worry that in a crisis, their governments may make it illegal for individuals to own gold privately, as done by the US government during the Great Depression. Regardless of a person’s home government claims over their money, the Swiss have maintained a good reputation of looking after people’s money.

The computer system of BullionVault keeps track of how much gold and silver is in your ownership. An important part of the system structure is that you legally are in ownership of the gold and silver you have bought and no one else. For instance the BullionVault creditors will have no prior title in event that the company ever goes to bust. As compared to bank deposits this is a significant safeguard as the bank can do as it wishes with the deposits. Gold bought through BullionVault.com is yours entirely and it will remain in the vault doing nothing until you decide that you want to sell it.

How do you know the existence of your gold or silver as you never really see it? This is a good question thoroughly addressed on the BullionVault.com website FAQs and extensive help. It is not my wish to be accused of pulling the wool over anybody’s eyes or offering biased financial advice and the best answer I can give is go and see for yourself. But in essence, openness is your protection. BullionVault.com goes an extra mile to be as transparent as possible by using BullionVault operator Via Mat which is fully accredited. It publishes the bar lists given by Via Mat showing the gold and silver held on behalf of BullionVault. The site also publishes its own lists showing who is in the ownership of what.

Opening an Account with Bullion Vault

It’s a relatively simple procedure opening an account with BullionVault. A person needs to simply click on the Register link on the home page and follow instructions.

As a person opens such an account which may have stored value, some security measures with the account such as using simple passwords and not giving out passwords are highly advised.

It becomes possible buying and storing gold bullion or even trading in it once you open your account i.e. buying and selling on a regular basis. And even buying and selling with other account holders. An advantage is that trading this way is possible using small amounts. Bank fees may be incurred in buying and selling involving dealing in funds transferred between the bullion vault and your bank and you should keep this in mind when you buy and sell gold.

How to fund your BullionVault account

It is so easy buying and selling gold and silver bullion on the BullionVault website. All that a person needs to do is funding their account via ACH, check or bank wire. After funding the account, you can access the trading platform where buying and selling of bullion takes place. The order process for BullionVault is pretty quick and very secure unlike other sites where a person needs to wait for their money to clear and await shipment.

BullionVault Shipping Rates and Secure Storage

Individuals do not need to pay for shipping and handling charges since bullion comes in the form of good delivery bars and is stored in a vault that is secure. The bullion is delivered to the Via Mat or Brinks storage facility of your choice and an annual charge of 0.12% is charged by BullionVault for gold and 0.48% for silver. The fee is inclusive of insurance which is in line with a majority of other competitors.

Bullion Vault Security

Out of its commission, a compensation fund is maintained by BullionVault and contributes per commission charged at a rate of 10% to a maximum of 10 cents for each order. Currently the compensation fund value is capped at $4m which a total maintained under review. The exclusive power of distributing the benefits from this fund can be exercised by the independent council that adjudicates formal complaints.

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