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BullionVault for Dummies: Reviewed by an Expert

As you might already know (or not!) BullionVault is what it sounds like; an exchange of gold and silver bullion online. To be more specific, BullionVault is a peer-to-peer based exchange where users can trade gold or silver with each other. The company is the world’s largest holder of bullion gold, having reserves that are larger than most central banks hold in their own vaults. Don’t worry, it’s quite easy to get started and will go all the necessary information in this article!

IS BULLIONVAULT TRUSTWORTHY?

BullionVault is legit; as a company they have the necessary paper work in place, as expected by any financial company. BullionVault is owned by Galmarley limited, and you can check their status yourself by using their company number 4943684 as well as their financial standing online via their website. In 2008, the company was taken in a as a member of the London Bullion Market Association which represents the largest of its kind in the world’s physical bullion markets.

BullionVault has also won the Queen’s Award for Enterprise twice, for their use of technology in making the efficiencies and reliability of the professional bullion market available to private customers and for having succeeded enormously in expanding their market to also include overseas clients and markets. BullionVault is also transparent in the sense that their audited figures are available online, making it easier for clients and investors to check the numbers and analyze the company’s financial stability. As BullionVault is trusted by banks it can buy and sell bars at a low-cost and at market terms, and transmit the savings to clients.

IS BULLIONVAULT SAFE?

All individuals wanting to become members and trade gold or silver are asked to provide proof of their identity and address detail, as well as a verified bank account with which money is paid into and out of from BullionVault. All trading activity is made via the platform, removing the risk inherent in making deals directly with other individuals. BullionVault executes a daily audit to reconcile the clients’ holdings against an updated bar list and bank statements – all to ensure that all bars listed are in fact held in the vaults of BullionVault.

IS BULLIONVAULT PAPER GOLD?

The simple answer is no. Here is an explanation: the largest difference between paper gold and physical gold is that paper gold is connected to the futures market and other derivative investments that are based on the price of an underlying asset. Physical gold is what it is; the actual underlying asset!

BullionVault offers you to trade and own gold or silver, making you the owner of a tradeable physical asset in stark contrast to paper gold trading. Physical gold is traded based on its fundamental value, with a price based on its demand and supply.

HOW IS MY GOLD AND SILVER STORED?

Once you have bought gold or silver via BullionVault, your assets are stored in vaults controlled by the company. You are still the owner of the assets, while BullionVault are the ones in possession of it and thus have an obligation to safekeep the assets and make they are stored in a secure manner.

BullionVault co-operates with certified vault providers and makes these vaults available to traders at a low cost, thanks to economies of scale and a good deals enabled by their size in the market. The vaults are distributed among different geographic locations, to minimize risks brought by financial meltdowns in particular markets.

HOW ARE PRICES SET FOR GOLD AND SILVER AT BULLIONVAULT?

The prices for the gold and silver traded on BullionVault are set by the users themselves in the market platform made available by the company. You set the price at which you are willing to buy or sell gold or silver, and a trade will be made once other members accept the suggested price.

In recent years, BullionVault has made it possible to trade gold and silver quite close to the spot price (e.g. the price set by futures prices). This is done via giving the option to its members to buy and sell gold or silver at a daily price equivalent to that set independently at the London gold or silver fix. This option is available on the BullionVault website along with the BullionVault markets’ live order board.

HOW DO I GET STARTED WITH BULLIONVAULT?

You can start trading with BullionVault by following these steps:

  • Register on the website by setting a username, password and e-mail address.
  • Transfer funds from your bank account to your BullionVault account.
  • Buy gold or silver via your account.
  • Validate your account, by
  • Sending in a photo ID
  • Sending a proof of your bank account such as a bank statement that is recent
  • Send in a proof of address
  • Done! BullionVault will contact you once the validation is finished.

WHAT DOES IT COST TO USE BUILLIONVAULT?

The highest cost for you as a trader per year will be a maximum of 0.5%. The transaction cost paid is based on how much you trade for per year, following the following structure:

  • If you trade for less than $75,000 you pay 0.5% transaction fee
  • If you trade for less than $750,000 but more than $75,000 you pay 0.1%
  • If you trade for more than $750,000 you pay 0.05%

There is no minimum amount with which you are expected to trade though, other than the physical limitations (that is to say, you need to trade in whole grams of course).

You can choose to trade in the following currencies: US dollars, Euros, Japanese Yen and British pounds.

SUMMARY

If you want to trade physical gold or silver, BullionVault is an alternative for you. The commission fees are low and the company has vaults in diverse parts of the world, keeping your investments safe and diversified in case of a financial crisis. It is easy to get started, and within the means of most traders out there. To summarize, it is worth trying it out as commodities are an interesting asset to have as a part of one’s trading portfolio.

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