September 11, 2021
The shine of gold hasn’t worn off after five thousand years as far as humanity is concerned. And with the dollar seemingly in peril, the most classic precious metal is just as in demand now as it was millennia ago.
But when it comes to physical gold, what’s the best to buy? Bricks or coins? And what about storage? Thankfully, we have Stansberry’s commodities expert Bill Shaw to show you the best ways to purchase (and hold) your golden nest egg.
An Easy-to-Follow Blueprint for Building Your Own Gold Hoard
Finding buried treasure…
For many folks, it’s nothing more than a fantasy. The idea conjures up visions of pirates, wooden chests brimming with coins on a deserted tropical island, and an “X” to mark the spot.
But most of us never really expect to discover a hoard of gold – and certainly not while just strolling through our own backyards. For one California couple, though, that’s exactly what happened…
“Mary” and “John” – the pseudonyms they chose to protect their privacy – regularly walked their dog through a trail on their property in the Sierra Nevada mountains. They followed the same path almost daily for years, never noticing anything unusual along the way.
That all changed during one jaunt in February 2013…
First, Mary noticed a rusty metal can sticking out of the ground. Then, John used a stick to dislodge it from the hillside. When he bent down to pick it up, it was so heavy that he thought it was full of hardened lead-based paint.
As Mary and John walked back to their home, the lid of the can buckled under the weight. And it revealed something much more valuable than old lead paint…
Inside were fistfuls of gold coins.
And Mary and John’s luck didn’t end there…
After returning to the site with some basic gardening tools, they uncovered another can. Although this one had decomposed from the rust, the coins inside only needed a little bit of cleaning. Then, they found another can… and another one… and another one…
In all, Mary and John unearthed eight cans containing a total of 1,427 coins. Now called the “Saddle Ridge Hoard,” it’s the largest known discovery of buried gold coins in U.S. history.
The hoard is mostly made up of $20 gold pieces from the San Francisco mint. These “double eagles” were processed from the nuggets that prospectors found during the infamous California Gold Rush of the mid-1800s. The coins were dated from 1847 to 1894.
With a face value of nearly $28,000, whoever buried the coins knew they were hiding a fortune. But after what we can only assume was at least a century underground based on their dates, the hoard is worth much more… It was valued at roughly $10 million in 2014.
Now, the odds of finding an actual buried treasure in your backyard are extremely low. And you probably don’t need to bury that much gold to protect your own wealth, either.
But the fact that someone went out of their way to hide that much gold so long ago proves something that’s still true all these years later… You must own at least some physical gold.
Each month in Stansberry Gold & Silver Investor, we cover the latest macro trends and what they mean for gold prices, as well as what’s happening within our Hard Rock Portfolio. But we often receive notes asking where and how subscribers can buy physical gold, too.
So with that in mind, this month, we want to share a few basic tips about how to do that…
We’ll share the best way to buy physical gold if you’re just getting started, as well as a couple of other options. We’ll highlight some of the most reputable dealers we’ve come across. And we’ll help you figure out exactly how to store it once you’ve bought it.
But before we get to all of that, let’s talk about why it’s critical to own physical gold…
The No. 1 Way to Preserve Your Wealth
Longtime Stansberry Gold & Silver Investor subscribers know the two primary reasons to invest in gold and related stocks…
First, the precious metals space offers the opportunity to make substantial gains through speculating on rising gold prices with gold stocks. These investments provide leverage to the spot price of gold… Historically, gold stocks outperform the metal significantly during times when prices are rising. And you can book massive gains in a short amount of time.
Second, and more relevant to our discussion this month, gold can help protect a portion of your overall wealth. For this reason, we want to own the physical metal… It provides “insurance” for our portfolios against an impending economic crisis.
As regular readers know, gold has proven to be a reliable store of value throughout history…
For example, over the past century, an ounce of gold will almost always allow you to get a custom-tailored men’s suit. And 20 ounces could buy you a new car. Yet, as we all know, the value of these items priced in U.S. dollars has skyrocketed over the same period.
That’s because the value – and thus the purchasing power – of the dollar is continuously being inflated away by our federal government. This trend became more pronounced after former President Richard Nixon removed the dollar’s gold backing in 1971… As a result, consumers suffered a dramatic rise in inflation in the late 1970s and early 1980s.
Meanwhile, the nominal price of gold soared to around $800 per ounce in 1980. That equates to about $2,800 per ounce in terms of today’s dollars – which makes it the highest “real” price for gold in history.
These days – thanks to out-of-control spending from the U.S. government both before and during the COVID-19 pandemic, and years of artificially low interest rates – we’re seeing inflationary tailwinds once again…
Analysts and experts can’t agree on whether this bout of rising inflation is simply “transitory” – as the Federal Reserve keeps saying – as we get back to normal… or whether it will continue to rise for several years.
A common metric used to track inflation is the Consumer Price Index (“CPI”). The CPI rate spiked to 4.2% in April – up from 2.6% in March and well above the Fed’s long-term target of 2%.
The most recent measure of the Personal Consumption Index (one of the Fed’s favorite metrics for measuring inflation) rose 3.6% since last July – matching the highest level in 30 years.
It’s still a far cry from the 15% we saw in the early 1980s.
It doesn’t really matter in either case, though. Whether inflation subsides tomorrow or a decade from now, it doesn’t change our main reason for owning physical gold…
The value of the U.S. dollar is always being eroded.
Remember, even before Fed Chairman Jerome Powell acknowledged that he was willing to let the economy “run hot” in August 2020, the central bank’s longtime inflation target was 2%. In other words, even in normal times, the dollar is slowly bleeding value every single day.
You can think of inflation like a tax on your cash. As inflation rises, your cash becomes less valuable than it was in the past. So if you’re saving cash, you’re being punished.
Now, don’t misunderstand us… We aren’t saying you should get rid of all of your cash. We need it for everyday transactions. You can’t fill up your car’s gas tank with gold after all.
But beyond your normal expenses and emergency funds, gold is the best way to preserve your wealth.
We’ve all heard stories about folks stuffing cash in their mattresses during the Great Depression because they didn’t trust the banks. And while we’ll likely never know for sure, maybe that’s why someone buried the Saddle Ridge Hoard underground, too.
Owning physical gold is sort of like putting cash in your mattress – but it’s much safer… That’s because it moves a portion of your wealth outside of the financial system while maintaining your purchasing power.
But how exactly can you do that?
Everything You Need to Know About Buying Physical Gold
If you’re just getting started, we recommend buying gold bullion coins.
These coins sell for a small premium over the spot price of gold. Typically, the premium is around 5% (and it’s about that today), but that can fluctuate based on supply and demand.
Bullion coins get their value from their gold content – not from their face value or collectability. Popular examples include American Gold Eagles, Canadian Maple Leafs, British Britannias, and South African Krugerrands. (You can also get bullion coins in silver.)
For example, here’s what a 1-ounce American Gold Eagle looks like…
Most of these coins are minted in 1-ounce sizes, but they also come in half-ounce, quarter-ounce, and tenth-ounce sizes. Keep in mind, though… As the coins get smaller in size, they will trade at a higher premium.
That’s because much of the premium for a bullion coin comes from the costs associated with the minting process. So as the amount of gold in the coin drops, these costs will account for a larger portion of the coin’s total price.
These bullion coins are all well-known and commonly traded around the world. It makes them highly liquid and tough to counterfeit.
If you’re putting a larger amount of capital into physical gold, then bullion bars might be the best route for you. Today, a 1-kilogram bar is selling for about $60,000…
Bullion bars are available in 1-ounce ingots, too. But if you’re buying by the ounce, we recommend sticking with coins… The slightly higher premiums that you’ll pay for coins are worth it if you need to sell in a hurry at some point in the future. It’s more practical to have your wealth in a recognizable and easily divided denomination.
Plus, since they come in so many different varieties, bullion coins are more fun to look at and collect than bars.
Another option is semi-numismatic coins… In addition to their gold content, these coins are valued by their condition, rarity, and collectability. And the premiums for these coins can soar in an inflationary environment.
If you’re buying rare coins, make sure they’ve been authenticated and graded by a third party… Two organizations are considered the industry standard for this service – Professional Coin Grading Service (“PCGS”) and Numismatic Guaranty Corporation.
After the coins have been graded, they will be encapsulated in plastic, which is how reputable dealers sell them. Don’t buy rare coins that haven’t been graded.
Coins are categorized by year, type, and grade. The grading service rates the coin’s condition on a scale of 1 (lowest) to 70 (highest).
The grades of coins that are considered uncirculated will start with the designation “MS” (which means “mint state”). Most coins that you can find in a coin shop will range from MS-60 through MS-70. Obviously, the higher the quality, the more you’ll pay for a coin.
If you’re looking for someone who can give you advice on rare coins, we recommend contacting David Hall Rare Coins. The company’s president, Van Simmons, has been assisting Stansberry Research subscribers for years. He is also one of the founders of the PCGS.
Below is the contact information for some reputable gold dealers…
(Please note that this isn’t a comprehensive list… It’s simply a few names to get you started. And we don’t get any compensation for mentioning these dealers… They’re just some of the folks who’ve treated thousands of our readers well in the past. They each have plenty of experience… And we’ve never received any serious complaints about them.)
Don’t forget about your neighborhood coin dealer, either…
Get to know the proprietor. These guys generally love to talk about gold coins. And you can sometimes find some great buys there that you wouldn’t get on a nationwide website.
Regardless of who you use, the most important thing is to do your homework…
Before you buy, make a few calls to see who offers the best deals. And don’t forget that prices change daily. So it’s important to do your research on the day you plan to buy.
If you’re considering buying a new phone, this shocking tale could change your mind. Get the full story now.
Where to Store Your Gold
Another question that many folks have is how to store gold once you’ve bought it…
Ideally, you can keep it at your house inside a fireproof safe. It’s a simple way to make sure it doesn’t get destroyed in a fire… And it’s easily accessible if you need it in an emergency.
You might’ve also heard stories of “midnight gardening”… Some folks feel safer burying their gold in their backyard. This method protects your valuables from both theft and fires.
Just be sure that you can find it when necessary. And you should probably tell at least one person who you can trust where it is in case you get hurt or die… Otherwise, you might wind up like the guy who never recovered his 1,427 coins in the California mountains.
Another option is a safe deposit box at your local bank. But of course, there’s one problem with that… If the bank is closed, you won’t be able to get to your gold.
Some dealers offer storage, too…
BullionVault, for example, charges a maximum fee of 0.5% to buy and sell gold through its service. And it offers various vaults around the world that you can use to store your gold.
The Perth Mint in Australia also offers gold depository programs.
But again, there’s no better way to store gold than somewhere you can physically access it. That way, you’ll be able to get to it in a matter of minutes (or less).
If you’ve been on the fence about buying physical gold, we hope this month’s story helps make your decision easier…
It’s never too late to begin buying. Start slowly, and build up your hoard over time.
Remember, we don’t think of physical gold as a way to make money. We don’t plan to buy low and sell high like we do with gold stocks. It’s a necessary form of insurance…
Nobody likes buying insurance for their homes. And we hope we never need to use it. But if the time comes, it’s always better to have insurance than not have it.
Gold works the same way…
You’ll sleep better at night knowing that a portion of your wealth is safe from economic disaster. And your extra time and effort will be worth it when the storm comes.
Love us? Hate us? Let us know how we’re doing at [email protected].
Managing Editor, American Consequences
With Editorial Staff
September 11, 2021