Guest Post: "Why You Should Store Precious Metal In Multiple International Locations", by Olivier Garret of Hard Assets Alliance

Sat, Mar 10, 2018 - 9:28am

We've maintained an affiliation with our friends at Hard Assets Alliance since 2012 and I hope they are always on your list of bullion dealers when making a purchase. They provide a fantastic service and you'll likely find this new post from Olivier Garret, the Founder and CEO of HAA, to be extremely helpful and interesting.

Why You Should Store Precious Metals in Multiple International Locations

By Olivier Garret, Founder and CEO of Hard Assets Alliance

“Where should I store gold?” and “Should I store in multiple international gold storage facilities?” are some of the most common questions I receive from Hard Assets Alliance customers.

In short, the main reason why investors would consider storing precious metals in more than one international location is risk mitigation.

In addition to being a store of value, precious metals are insurance against a number of potentially disastrous scenarios: financial crashes, civil wars, political unrests, and other crises.

Unfortunately, any form of wealth can become a prime target of theft or government seizure in times of great distress. And diversification between storage locations can help mitigate it.

Here are the four serious risks to your metals holdings that international diversification will help avoid or reduce:

  • Confiscation or outlawing of personal gold ownership.

    • Capital controls—the government limits or denies a citizen’s right to carry or send any form of money abroad.

    • Administrative actions—seizure of property by a government agency without notice or due process; becoming enmeshed in a frivolous civil lawsuit.

    • Currency debasement/inflation will lower one’s standard of living and destroy wealth not adequately protected.

    The most likely risk is that someone (including a family member) finds out that you store gold at home and steals it—or worse. For this reason, taking possession of large amounts of precious metals puts your wealth, as well as the lives of your family, at risk.

    A better option is to store some of your precious metals in a safe storage location somewhere nearby. This way, you reduce the risk of theft and can quickly take delivery of your holdings.

    I do not recommend storing your precious metals with a financial institution, though.

    The reason is that the contents of a bank vault is not adequately insured. In addition, financial institutions would be amongst the first casualties in a financial crisis. Further, your holdings would become an easy target in case of government seizures.

    If you have enough precious metals to be concerned about government seizure/confiscation or capital controls, you should consider jurisdictional diversification. Storing precious metals abroad makes it much harder for a desperate government to seize them.

    Besides, you could access part of your holdings in case you have to flee from your homeland for any unexpected reason like war.

    For real-world examples, look no further than Europe in the 1930s and 1940s. Many Europeans were fortunate enough to have assets in Switzerland or the United States during the 1930s and 1940s. The offshore assets were their escape tickets from fascist regimes and wars.

    If you decide to go global, make sure you store metals with the most reputable independent vaults. Look for precious metals storage companies that safeguard assets for large institutional investors and governments, such as Brink’s.

    Further, be sure that your precious metals are fully insured and available for immediate delivery at all times.

    Another important decision is picking the destination countries to store some of your safety nest.

    I suggest looking for the most stable countries with a long history of depositor protection. Don’t forget the destination country will have its own set of regulations controlling the import of precious metals, too.

    But in the end, you have to choose a location that makes sense to you.

    I would personally more likely choose Switzerland or Australia than Singapore. That’s because I would be more likely to relocate near one of these two countries than to Asia.

    But this is a personal preference, and your criteria may be different.

    For non-US investors, the United States may be a great place to store metals. Switzerland is also attractive because it has the longest track record of political stability and neutrality. Singapore’s financial history is much shorter, but the country appears to be very stable.

    England, Australia, New Zealand, and Canada are also great alternatives.

    The key is to diversify across jurisdictions as much as it makes sense based on the size of your precious metals holdings. I personally hold precious metals in four different jurisdictions, including the United States.

    The only drawback of storing assets abroad is that foreign-held assets require greater awareness and planning:

  • Access to your metals may not be as quick and easy. Foreign-held bullion is for those with sufficient gold and silver already stored at or near home. Storing all your precious metals overseas defeats one of its purposes—to have it handy for an emergency.

    • The receipt of proceeds after a sale could take time. The delay between selling your foreign-held gold and receiving the funds can be days. Offshore precious metals should not be considered ready cash.

    • While the US may pose the greatest threat to a US investor, a foreign government could move to control certain assets as well. The risk varies by country and is generally greater within the banking system than with a private vaulting facility. Be sure to perform your due diligence before selecting a country. Choose a location with a history of strong depositor protection, governed by the rule of law, and solid property rights—and select bullion storage facilities with the highest reputation.

    • Understanding and complying with reporting requirements is essential.

    The bottom line: Gold stored abroad is all about minimizing risks and maximizing options. As your metals holdings grow and governments become increasingly desperate, diversification becomes increasingly important.

    One last thing I want to note is that I do not advise you carry gold or silver bullion across a border yourself. While it is legal, the risks are too high.

    I know of numerous cases when ignorant customs agents confiscated precious metals. US Federal Government rules and regulations are muddy and complex in this regard, so you may not be able to find justice.

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    Learn how to make asset correlation work for you, how to buy metal (plus how much you need), and which type of gold makes for the safest investment. You’ll also get tips for finding a dealer you can trust and discover what professional storage offers that the banking system can’t.

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    About the Author

    turd [at] tfmetalsreport [dot] com ()


    karma polis
    Mar 21, 2018 - 5:39am


    Turd, many thanks for your inimmitable running commentary. I write with a query regarding the up-coming enlivening / animation / going live of the "PetroYuan" this coming Monday,( 26th March '18). How do you see it impacting the chicanery of the western PM markets? I try to be careful what I wish for, considering the gravity of the situation. If our western currencies are essentially worthless, and the BRICS are prepared to prove it, there will be some serious shit to wade through! Alternatively, if the "hawks" of the west get their way and succeed in provoking a war with Russia and/or China, it might just be that the $ price of PMs is the LAST thing ANYONE will be caring about! As I hunker down in my little back-water nation, Scotland, our psychotic bitch Prime Minister, Theresa May, seems bent on poking the Russian bear with an electric cattle-prod. This lark with the nerve gas in Salisbury, for example. The scariest aspect of which is my compatriots' willingness to believe it! As if...... President Putin must be thinking, "Who the fuck.....?" Western media love to portray him as an ex-KGB thug, us Turdites know better, and he's actually a chess master. Putin and Xi have played the long game beautifully by handing the west enough rope, now I fear the time is upon us to "Do or die!" I wish this had all happened when it should have, 10 years ago. Then, I could have pulled rank as a father and said, "Time to bug out, family!" Now my kids are young, autonomous adults whose heads are full of music and fashion and hormones. Not so easy to drag them off to South America or somewhere relatively out of harm's way.

    To anyone on your side of the pond who thinks war is the answer, I'd say "Russia is not Iraq and China is not Libya." Both these proud and mighty nations have endured countless humiliations at the hands of "The West" in general and the US in particular and will be short of sympathy when we're laid low. The peoples of both countries have weathered hardships that us westerners cannot begin to imagine. If our "money" reaches its intrinsic value, we won't have to imagine, we'll get to experience it first-hand.

    CC Horses
    Mar 12, 2018 - 12:16pm


    Thanks so much for taking the time to answer my question.

    Very Much Appreciated.

    Yes, Caesar must be paid

    Have a great day!


    Mar 12, 2018 - 11:51am


    I am probably doing it wrong since I use neither the LIFO Last in First Out, or FIFO First in First Out accounting for losses as my harvesting of losses is cumulative. If I was asked to prove losses then my paper trail, while correct in amounts, dates and losses, is spotty as I might use a portion of a large buy from 2013 for a particular 2016 sale and get that segment of silver or gold allocated to a capital loss.

    Right now I've sold most of my personal gold and silver to harvest losses so anything going forward could result in a capital gain but ultimately I bought back most of the gold and silver and now it sits at a much lower basis.

    Those are examples of losses from gold and and silver sales that are added to a large stack of loss carry forwards from prior years going back to around 2007.

    What stinks about the IRS is they allow only $3,000 a year in excess losses to be used any one year to shelter other present day income . That $3,000 is what you use once any other losses, either past or present, are absorbed by gains. If you have a $20,000 loss in 2017, that loss goes first to offsetting gains in 2017. I don't think there is a way to select the year you use the loss though. It's pretty much an automatic process. Your accountant should know how to do this and I suggest that anyone taking losses and gains in the more exotic assets like precious metals and cryptos use a good CPA or accountant. That is your shield against the IRS challenging any claims for losses, particularly when they get up to mid 5 to low 6 figures.

    Losses shelter last years gains to the degree that they exceed the gains. If the gains are greater than the losses you'd use loss carry forward from prior years like I do. If losses are greater than gains then they carry forward. It ight be possible to look back and file an amended return to account for excess losses but I don't see how that would work for these situations.

    There is a limit to the number of years these losses can be carried on the books as a viable shelter. My CPA explained it to me and said he could use the oldest losses, either short or long term, against a future year's gain.

    EG I did well with JNUG and DUST in 2016. The gains were around $250,000 That used up some of the oldest losses carried from way back to the market crash of 2007-8. Ouch. But those losses from a decade ago saved me a huge short term tax bite from day trading JNUG that could have easily been 35% or more as ordinary income. I have a lot of loss carry forwards that will hopefully be used in the near future should gold and silver move up sharply. I would get pretty strategic in making sure I took gains in any particular year that was still within the time limits of keeping my loss carry forwards intact. If they expire then that is a big loss to me because, if nothing else, my loss carry forwards at least save me paying excess capital gains on bullion Those gains could be ordinary income or capital gains, either of which are pretty igh rates.

    This is a long winded way of explaining how losses can be used and a few time lines to be aware of. You might want to keep a chart of the oldest to the newest loss carry forward, their dollar value and when they need to be used. My CPA keeps tabs on that for me annually.

    While I lost my ass buying high and selling low yet buying back almost the same number of ounces of AU and AG, it was painful to recognize errors in my assumptions as to price directions for PMs. All I can do now is wait until they rise in price again, decide if I want to sell and which direction to move capital. Trading in 2018 and late 2017 has not been quite as good as 2016 but we can hope the market turns for juniors and the like. Then my loss carry forward will have a solid effect on keeping taxes to a minimum.

    On a side note, if your combined incomes for a couple in 2018 is not more than $77,000 approx and that includes capital gains, the cap gains tax rate is zero. This is an important fact in driving when to sell PMs for a gain and how much to sell. I am no fan of paying gains on PMs due to the debasement of the USG but there's no sense in drawing the attention of the IRS by selling and then having to explain to the goons that you don't owe taxes because of tax regulations.

    IMO, and a bit of editorializing. If push came to shove I have enough sources under the radar that I could sell for a gain and not leave a paper trail. Like paying for services and selling to precious metal confederates. But I didn't say to cheat on taxes. Caesar must be paid

    CC Horses
    Mar 12, 2018 - 10:02am


    Can you select the year to use your carry forward loss?

    Example - I sold some silver at a loss in 2017 this years tax return. Do I have to use the carry forward loss next year, or can I choose to wait to use in another year, say 2020?

    Thanks in advance.

    Mar 11, 2018 - 11:24pm

    Bill I might be able to shed some light on this

    The $10,000 limit applied to assets owned by a US citizen overseas. The FACTA and FBAR reegulations require reporting of offshore holdings over $10,000 There is a question as to whether US gold bullion, US Gold Eagles or gold coins minted by other governments require reporting. It's splitting hairs but very important that you know the rules. Loop holes exist in the reporting of gold coins held in safe deposit banks in other countries but I heard that reporting requirements made to that foreign bank might pose greater risks because most foreign banks are now loath to accept US citizen accounts because of the penalties imposed by the IRS and other government agencies when they find an offshore bank holding citizen cash or other assets. The penalties can be severe

    As to selling gold coins offshore, you create a form of asset., such as a bank account that is in excess of $10,000. The US government demands that account be reported. If your gold goes up 1000% in value, hitting $20,000, you also could have capital gains Gold coins and gold bullion can be as high as 28% federal. Selling overseas may force the buyer to report your transaction. If you sell the coins in the US the American Gold eagle does not require a dealer/ buyer 1099. It's an interesting loop hole I've sold gold in excess of $100,000 to buy silver when the gold to silver ratio was good or to exchange gold for another asset like a home or cash for my trading account

    Did I report the transaction in spite of the dealer not reporting it with a 1099. Yes. Because my sale price was lower than my basis and I got a tax write off. Over the last 4 years I've systematically sold gold to get the capital loss but in most costs I bought the precious metal back later. I hate parting with my stack

    ASE has the same rules. No 1099. But pure bullion or foreign minted gold coins garner a 1099 if you sell 25 or more. I've done that too. Sold Krugerrands I dont know what happens with gold bullion bars but suspect that the same rule applies

    Silver bullion 1,000 ounces or more requires a 1099. I've done that too. And taken cash. Not sure if the dealer did a treasury report for cash in excess of $10,000 but it's quite possible. Banks are also really down on large cash withdrawals and deposits and tend to report those transactions

    If you do any special systems with offshore holdings of gold and silver, sales of same or sale on shore, check with your CPA or a good tax advisor. You can think you are correct but find yourself running afoul of the law. I used my CPA many times for questions of this sort

    The final question that comes up and related to selling coins or bullion that have a capital gains. I know for a fact that if your sales are not garnering a 1099, it's up to you whether you report the sale

    It would be pretty easy to go to a bullion store of LCS, sell 20 gold eagles for $20,000 each (I live for the day that gold goes to $20,000) and the dealer writes you a check for $400,000. I've come to close to that amount over a few transactions in order to buy our house last year. Of the 6 sales, 4 were a loss as I was selling silver and gold acquired years ago for a much higher amount. 2 sales were smaller, kind of filling in the blanks for the home purchase and the sale price was higher than the buy price by around $2 an ounce for ASE.

    Because I went all in around 4-5 years ago, buying a boat load of PMs at prices well above the present price, I have a substantial tax loss carry forward. This buffer to capital gains taxes is my way of being able to sell what could be much appreciated prices on gold and silver. And don't we wish that would happen


    Mar 11, 2018 - 10:09pm

    Agent 700

    I now keep my few gold and silver couns at the bottom of an abandoned mine exploratory shaft but have been thinking that Singapore vaults may be a better or another good alternative for an American citizen.

    My biggest question is if I do store phys gold $9999 worth of coins what are my reporting requirements to IRS? None. Now my next question would be what would be the same IRS requirements if the nominal fiat value rise to $20,000 for same gold coins? Since the fiat value of those phys coins now exceeds the min required reporting requirement of $10K, although none have been converted to fiat, would there be a reporting requirement?

    If the answer to that is also "none", and I sell my coins for $20K, would you know if US IRS would look at this as a violation of the reporting requirement of any account greater than $10K?

    Thanks for any advise on this

    Mar 11, 2018 - 8:02pm

    Storing Gold in Singapore

    I can highly recommend Silver Bullion in Singapore, which most internationalized-thinking people regard as the safest jurisdiction in the world.

    An American citizen can open, fund, ship to or take delivery from Silver Bullion, along with buying and selling via the internet. I have personally visited their "Safe House" (with the SINGLE visit existing customers are allowed, for security purposes). It is a very, very secure vault and Gregor's policies, systems, redundancies, options and people are all cutting edge. He has dovetailed the business with Singapore Monetary Authority laws, and is sanctioned by them. Silver Bullion holds DUAL, full recovery value insurance policies with Lloyds and some other top insurer - that covers even if there is "an inside job". There is an optional clause a customer can select that will require a PERSONAL visit by an authorized individual in order to sell or withdraw your metals, which protects any customer in case his home country mandates delivery and confiscation by some new law..

    Guys, Asia is where it's at for investing and juridictional safety. Get a passport and come on over! It is not as "foreign" as you think, and is light years ahead of the USA in many aspects..

    Mar 11, 2018 - 7:01pm

    What the Heck

    4TH Keep Stacking Longest 4th ever. Lol

    Visit the FAQ page to learn how to track your last read comment, add images, embed videos, tweets, and animated gifs, and more.

    Mar 11, 2018 - 10:54am

    Here's an interesting factoid

    Minimum wage in 1938, when it began was 25 cents an hour, or $20 for a two week paycheck. How many people bring home $1300+ every two weeks making the minimum wage these days?

    Mar 10, 2018 - 11:59am

    Paraphrasing Shakespeare

    First, kill all the bankers

    The entire oligarch apparatus would collapse overnight. Evil would not be financed

    Side note.

    DBank's top execs get no bonus for third year in a row. More losses for this nazi bank

    Boo fucking hoo

    Lower level DBank employees get bonuses triple last years.

    Bank loses money--employees bonuses 3x. WTF !!!!

    That these rat bastards still draw breath is a crime against humanity.

    Dr Fix Your synchronicity post was great I almost forgot how much I like both musicians. And people still wonder about quantum entanglement on a musical level, or any level for that matter.

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