Bullion Vault Users Thread

I'm in :)

Nice of you to start a dedicated thread. We may not share a membership of church but we share our membership of BV :)

I only have one personal account. Approximately 2/3 gold and 1/3 silver. For now I only use it to buy and hold. The transaction costs prevent being able to do quick trades, which i regard as a big downside. But i understand they need their income as well.

I am not sure what I'm going to do with BV.

I like having options. I have some physical G/S and a small amount in metal stocks. But I like the idea of diversifying out-of-country. 

And, even though I am primarily a stacker, I do like the option of being able to quickly convert my BV metals to cash and back - or between gold and silver.

If fact, my first and main idea was to use my BV funds as a way to play the G/S ratio, without the hassle of bringing my physical into the LCS for a swap.

I own just silver currently at BV with the idea as the G/S moves toward 30/1 (or something convinces me that gold is better before that point) I start shifting to gold. 

ink: I find the transaction costs are way smaller than the premiums I would pay at the LCS for a transfer between gold and silver. Not only that, it can be done 24 hours a day should need be.

I will confess I have been doing a bit of "trading" in and out of silver (never more than 1/3 position out of the metal). I will save strategy discussions for other posts - and I would love to get some input from other BVers.

Currently I have one account. I am thinking of opening more in case I really get concerned about getting more cash out of the Canadian banking system and into a position where I can get it into physical quickly. My gut says if things get that bad, I won't be trusting wiring money to BV anyway ... but I am at least thinking about it.

I wish I could be as optimistic as you Rico. The way I see it, is a slow long slide into real impoverishment. I watched the video from the guy who you cited during an earlier post and he offered nothing really other than said promised technological breakthrough's in the future. Of course growth will follow at some stage, but such will be the slide in living standards, it will never bring us back to a more comfortable base. I therefore concur that there is reason to be bearish on these markets.Perhaps I am not as bearish as you but I see your point of view on this. I see that Europe is sliding towards economic slavery and this "crisis" is the stage for leeching away sovereignty of nations into this colossal unelected unaccountable body.

Crazy times!

Many thanks for starting this thread.  Great idea!

Good initiative !

I have one account, and my ratio currently is 1/10 gold and 9/10 silver. I am more of a silver guy anyway, playing both the scarcity and monetary feature of silver. The reason for the gold is that it is stored in a different BV vault in a different country, to spread some risk.

I promised a follow up to my previous post about BV in main street, regarding a few questions i had. Here are the questions and BV's answers.

===========

Dear Mr.XXXXXX
Thank you for your reply. Whatever happens to your bank, your gold/silver is still tradeable on BullionVault. It wouldn't matter if your bank wasn't receiving money anymore. You could still sell your metal on BullionVault, and then hold the money in the Client Account at Lloyds TSB until you arranged a new exit route.

Yes, we do have strict rules about re-validating a new bank for you. But we are a small, flexible business. And it's our aim to make sure you can realize the full value of your property when you want to. That's why, as well as selling on the BullionVault Order Board, you also have a right of withdrawal. This way, you can take your metal out of the vault, and sell it elsewhere as you choose. Please see our Terms & Conditions for procedure and costs:

http://bullionvault.com/help/terms_and_conditions.html#Right%20of%20withdrawal
http://bullionvault.com/help/tariff.html#Withdrawal%20fee

Furthermore, all gold-owning users have a right to ship between the 3 different vaults. We should like to extend the same right to silver users once new facilities - outside the UK - are opened later this summer.

RE: unsettled charges, BullionVault retains the right to sell a little of your metal to cover expenses, but only after giving you 7 days' notice:

http://bullionvault.com/help/terms_and_conditions_v3.html#Unsettled%20Charges

We haven't yet applied this right, however, choosing instead to take unsettled charges whenever money next passes through a user's account - whether on withdrawal of cash, or a new deposit.
Kind regards,

Adrian Ash
Head of Research
BullionVault.com

Office Tel: +44 (0) 208 6000 130
229 Shepherds Bush Rd
London W6 7AN
United Kingdom

On 16/06/2012 08:47, XXXXX wrote:

Thank you Adrian for your answers!

 

Please allow me some follow up questions.

 

at 2) What if my bank decides to have a bank holiday of a month like what is happening in Italy. What if the bank manager of the collapsed bank will not cooperate in a timely fashion. Seems to me that i am rather stuck then. In other words, i would like to have the reassurance that my silver/money is being tradeable when i want it to be, and trading is not depending on a bank manager cooperating or not. I guess what i am saying is that there should be an escape route in these cases. Can you give me this assurance.

 

at 3) The reason i keep some cash in my account, is to be able to pay the storage fees you are charging without having to sell my bullion. In the case that these funds are not available, because of a bank failure or otherwise, how will you proceed then. Will you sell a bit of my position by force, call it a margin call, or will this unique situation be dealt with in a different fashion.

 

at 4) Is bullionvault planning on making available storage locations for silver outside of the UK ?

Thanks for the reply, FB. Yes, your answer was helpful - particularly your observations about $/kg being more accurate. I set up my order board in oz. I will start watching more closely.

If I were adding new funds to BV, and wanting to just add to my position, I would likely do as you do - and put an order in between the bid/ask.

However, I am not adding funds lately - so I am doing a bit of trading. In that case the strategy depends on the situation. For example, If I am selling some silver in a spiking market, I will look to see where the next big sell order is and place my sell order slightly below it. This might be ABOVE any other very small sell orders. My thinking is anyone buying will take out the small orders (including mine) before they bite into the next big sale order. (Hope that makes some sense, grammatically if not strategically. Ha)

When I place an order in a static (not big dipping or not big spiking) market, I usually go in several cents above/below the current bid/ask - rather than in the middle, for example. So if I am buying, and the bid is 28.13, I would likely go in at 28.16. If I felt the market was ready to move on me, I might be tempted to actually buy at the ask.

The reason for this is I do notice (although not consistently) that there is a lag at BV when the spot price makes a major move. Any one else notice that?

So if I was buying, and the bid was 28.13 and the ask was 28.33, and I see spot silver shoot up in rhino horn fashion, there is not likely to be someone selling to me below the current ask - and once the market adjusts to the big move, the ask will be higher anyway. So I figure to get in before the market moves away from me.

My question about "what to do" about the big difference in bid/ask is for short-term trading purposes. It is going to be hard to explain in writing but I will try.

My goal at BV is to be fully invested almost all of the time. This is part of my "stack". My goal is to slowly increase my ounces by taking advantage of big spikes/dips by quickly selling and buying back in. But, the last thing I want to do is sell a part of my position during a spike and have to buy back a lot higher - and lose ounces from my "stack". This would happen if you sell too soon into a spike and it keeps going up. That is always a risk. I understand. And fair enough. You pays your money you take your chances... but so far I have been successful.

But here is the catch: I have been very accurate in selling for a good price into spikes. The problem is even when the price comes back a bit after the spike, the large difference in the bid/ask makes the trade risky.

In the spot market the bid and ask would usually be very close to the spot price (I assume?). But at BV that is not necessarily the case. 

I am a small fry and I am happy to add an ounce of silver on a trade. Even if I just trade a few times a week, I can add 2 ounces of silver a week to my stack. For a small trader the 30 cents between bid and ask is huge. 

For example, I plan to sell 100 ounces at $30 (on a big spike), and buy back at $29.50, I would theoretically gain one ounce after commissions. (Crude example, the math may not be exact).

BUT, if I sell at $30 in a spiking market, even if the price of spot silver settles back to $29.50 (i.e. I made a good "call"), the bid/ask may very well be $29.45 / $29.85. So I place my bid in between - say $29.50 - and it just sits there and sits there. Spot may even drop further to $29.40 and my bid will just sit there. If I go in between bid/ask, say $29.60, I might get my silver, but not nearly my one ounce.

I just wish the bid/ask were tighter - and more related to the current spot price.

Look right now at BV! Spot is about $28.03 - and has been for a few hours.

The bid/ask is $28.49/$28.62! If you sold at $28.50 earlier today (when silver spiked to $28.50), and saw it drop back down to $28.03, surely one would expect the bid/ask to be near that spot price! But it is not.

See what I mean?

In my previous post, I wondered why, with spot at $27.95, why BV had buyers bidding at $28.39. That was curious.

The bidders sure didn't know what they were doing, did they? lol

I will keep that in mind about BV ... when the bid/ask get too far away from spot price ... it might be a good trading opportunity.