Experiences with vaulted silver - has anybody tried this?

[Silverlocks]

Hi,

One of the options my investigations through online sources has turned up is holding zero-rated silver in a vaulting service and perhaps attempting to make a few bob off volatility.  Notwithstanding that I've just asked a community of stackers about vaulting, does anybody here have much experience with this and, if so, what are your views on it?  

[Roy]

'If you don't hold it, you don't own it!'

You'll come across this sentiment a lot but, for some folk, vaulting makes sense.

I use vaulting services for silver and platinum because I don't have a base and to avoid delivery charges and VAT. The cost of vaulting is quite low and in my opinion worth it.

There are advantages to keeping your wealth in different places.

https://www.bullionvault.com (Switzerland/London)

https://www.bullionstar.com (Singapore)

https://www.chards.co.uk/info/storage (Switzerland/Guernsey/Blackpool)

Edited August 27, 2022 by Roy

[sixgun]

There is also Kinesis.money

Vaulting is free and you will get a small yield on your metal. There are 15 vaulting sites around the world and redemption is possible - a number of us have done this.
The Kinesis Ambassadors are taking the virtual debit card (mobile phone card) through beta testing at the moment - they have made a series of videos to show how to use it but these won't be released until there is a virtual card actually available to the public.

So with this option you have buy and sell your silver at very competitive prices. There is no vaulting charge. There is a yield on metal held and you can spend the metal as well as cryptos at any Mastercard terminal.

i am not sure what the situation is for Indonesia - the card is for US/UK/EU right now but once established will undoubtedly go into Asia. You can deposit in SGD but not IDR - one of the Kinesis accounts to deposit into is in Indonesia so this could well be coming.

Edited August 27, 2022 by sixgun

[KevjustKev]

As long as the vault has enough silver to pay you, and everyone else. How long would you have to wait to get you hands on your silver?

[sixgun]

23 minutes ago, tallthinkev said:

As long as the vault has enough silver to pay you, and everyone else. How long would you have to wait to get you hands on your silver?

This is the experience of one of the Kinesis Ambassadors redeeming silver. There are images appear in the actual Reddit post.

 

[dragafem]

There could be all kind of scenarios.The latest was the plandemic when people here in ozland could not get their stuff out of the vault due to covid🙄

[Oddjob]

3 hours ago, dragafem said:

There could be all kind of scenarios.The latest was the plandemic when people here in ozland could not get their stuff out of the vault due to covid🙄

True...but that was in Danistan from memory. In NSW Gulagland you could still get to your vault.

[Silverlocks]

I see Bullionstar has vaults in NZ as well as SG.  I was born in NZ and still have whanau there so stashing some silver down under might be an option for diversification.  SG is also quite handy to Indonesia; one can get budget flights there pretty cheaply.  The fees aren't the cheapest for silver by comparison with some I've seen in Europe, but it's not off the planet.

[LawrenceChard]

9 hours ago, Roy said:

'If you don't hold it, you don't own it!'

You'll come across this sentiment a lot but, for some folk, vaulting makes sense.

I use vaulting services for silver and platinum because I don't have a base and to avoid delivery charges and VAT. The cost of vaulting is quite low and in my opinion worth it.

There are advantages to keeping your wealth in different places.

https://www.bullionvault.com (Switzerland/London)

https://www.bullionstar.com (Singapore)

https://www.chards.co.uk/info/storage (Switzerland/Guernsey/Blackpool)

Well said.

For clarification:

Our Blackpool storage is not VAT exempt, so makes more sense for gold rather than silver, platinum, or palladium. It is also quite easy for those who may wish to take delivery at some time in the future.

The Swiss storage is exempt from VAT, so is good for silver, platinum, and palladium.

We no longer offer the Guernsey storage for new deposits, mainly due to complicated States of Guernsey compliance and documentation.

😎

[Silverlocks]

12 minutes ago, LawrenceChard said:

Well said.

For clarification:

Our Blackpool storage is not VAT exempt, so makes more sense for gold rather than silver, platinum, or palladium. It is also quite easy for those who may wish to take delivery at some time in the future.

The Swiss storage is exempt from VAT, so is good for silver, platinum, and palladium.

We no longer offer the Guernsey storage for new deposits, mainly due to complicated States of Guernsey compliance and documentation.

😎

 

As you own a company that runs one of these facilities, perhaps you might be able to answer if it's not too commercially sensitive -

The fees in the various vaulting outfits seem to sit at a point where the minimum aligns with having about £10,000 to £15,000 in storage; a lot of outfits seem to charge a minimum of £6 or £10/month.  Do you see a lot of folks putting significantly less than that (say £5k worth) into a vault as a starting point and then building up from there?

 

[Paul]

I've traded in and out of silver with bullionvault in the UK and like their site Storage costs are what eats away it your capital/profits. Far cheaper to trade and store gold instead with them 

[Silverlocks]

28 minutes ago, Paul said:

I've traded in and out of silver with bullionvault in the UK and like their site Storage costs are what eats away it your capital/profits. Far cheaper to trade and store gold instead with them 

For a back-of-a-fag-packet analysis -

If one looks at the Chards website as an example, the spread on VAT free 1kg bars in Switzerland seems to be about 8.5% or 8% if you sell from the vault (more if you buy specific brands), which seems about par for the course on 1kg bars.  If you factor in about 3.5-4% dealer spread on gold, you're at about 12%.  If you assume a buy-hold-sell cycle averaging 5 years that's 3% of the value in storage fees.  That implies that you want at least a 15% movement to make a gold-silver trade worthwhile.  A 50% movement is a possibility in that time scale, although your transaction costs are significantly higher than something like index funds.  

On that basis, a gold-silver swap if silver is at an advantageous price might be worth doing if one was of the view silver was undervalued but you'd have to take a punt of at least £10-15k on it and wear maybe £600 in storage fees (assuming 5 years).  If you just buy the silver then the transaction costs are a bit lower.

 

[LawrenceChard]

3 minutes ago, Silverlocks said:

 

As you own a company that runs one of these facilities, perhaps you might be able to answer if it's not too commercially sensitive -

The fees in the various vaulting outfits seem to sit at a point where the minimum aligns with having about £10,000 to £15,000 in storage; a lot of outfits seem to charge a minimum of £6 or £10/month.  Do you see a lot of folks putting significantly less than that (say £5k worth) into a vault as a starting point and then building up from there?

 

Some people do opt to vault surprisingly small amounts, and I don't understand why.

We did discuss it recently, but I don't recall the statistics, and don't have quick access to them.

At the time we started offering storage, I envisaged that most people would store sufficient values to ensure that it was good value in relation to minimum monthly and annual fees, and this appears to be the case generally.

Without double checking, our fees are 0.5% per annum on gold, 0.6% per annum on silver, plus VAT in both cases. Our minimum charge is £10 per month plus VAT, which means £120 per annum plus VAT = £144 per annum.

£20,000 total value would therefore attract annual fees of £144, which concides with our minimum fees. On that basis, I would suggest that investors get optimum value from storage for amounts over £20,000.

The Royal Mint charges are double our gold charges, and are arguably no more secure.

As our charges include full insurance cover, they are actually very good value. Most private investors would struggle to get insurance premiums as low as 1%, and that would be subject to investing in adeqate security. Because of this, storage is probably a better option for anyone with as little as £10,000 in storage.

Offshore VAT exempt storage for silver, platinum, or palladium is even more cost effective. The VAT saving is equivalent to about 17.5 years of storage fees, and of course still includes full insurance.

One important point to consider is the cost of taking delivery, which is not quite as simple offshore. If you wished to make personal collection, you may need to pay then reclaim Swiss or other local taxes. Secure transport using Brinks, Loomis, or similar is not cheap, but can actually be good value for larger consignments, as they are well rehearsed and experienced in handling the various tax systems.

Our local Blackpool in-house storage has proved more popular than I originally hoped, and we were very recently discussing making our existing facilities more space efficient, or adding another strongroom.

😎