Precious metals ownership can be complicated.
How do I find the right partner to buy from five to 10 percent of your assets in physical
precious metals or digital?
Is the right play?
While much of the world has been in lockdown, financial markets have continued to operate,
often with spectacular results.
For investors, some of the greatest opportunities of our lifetime will unfold in the coming
months and years.
This is not a time to shy away from investment ideas.
This is the time to embrace them and investigate their potential for our investment portfolios.
We've asked experts from across a range of different markets about why we should invest
in them and why now.
Gold is currently one of the hottest investment themes with a large number of leading institutions
and high profile hedge fund managers actively engaging in this space.
Central banks, particularly the US Federal Reserve, have gone into overdrive with their
money printing activities.
Its balance sheet has expanded at an extraordinary pace, with many estimating that it will top
10 trillion by the end of this year.
Economic uncertainty, fiscal and monetary accommodation at record levels and increasing
concerns that we may see extreme forms of either inflation and deflation or both is
the backdrop that should be extremely supportive of gold.
But once you've decided to buy gold, you still need to decide what form that should take.
ETF, physical or digital.
Many investors want to take ownership of physical gold rather than as a financial assets such
as an ETF.
I asked Kenneth Lewis, CEO of at Maxim Won Gold, about the various forms of bullion can
take and in particular why digital gold is an exciting alternative and why now is the
time to start thinking about a digital format alongside physical bullion.
What is the attraction of physical and digital gold compared to obtaining exposure through
instruments such as an ETF like the G.L. deal?
Why physical, mental or digital metal?
It really comes down to your personal preference.
A lot of people love the idea of having it under control where they have it in their
homes, where they're not really tied to the financial markets and on the digital side.
It's just nice knowing it's always backed by physical metal and like some ETF out there
in today's world.
Once investors have chosen physical gold, there's a variety of forms in which can be
taken.
Kenneth, to outline some of these formats and summarize the differences, physical precious
metals are generally comprised of a few things.
Your coins to sovereign back.
You have rounds and you have bars.
Rounds and bars are generally made by private events.
There's generally a premium difference between the two on the sovereign coin side.
You obviously have the federal governments out there that are supporting it, whether
it be the US, the Canadians, UK presenting some Perth mint for Australia.
And people tend to migrate to sovereign points because they know they're going to be around
for years to come.
Coins tend to have a higher premium.
Bars around tend to be a little bit lower cost.
But I'd like to focus on spread's.
Right.
It's really what's it cost you to get in and get out and look at that?
Overall cost of ownership and spreads are a good way of doing that.
When you look at spreads, you're getting more more silver and gold for your money when you're
buying rounds in bars.
Many assets can have different prices depending on the format that an investor chooses.
And gold is no different.
Kenneth outlined why some forms of gold can demand the premium.
Typically, when you're dealing in institutional investment, you tend to find as you're buying
paper, you're buying Comex.
Physical metal needs to be delivered.
But that physical metal typically is in 400 ounce form if it's if I'm talking about gold
or could be in thousand else form.
I'm talking about silver.
They tend to be lower premium bars.
They tend to be a product that normally is readily available, although in more recent
times that's not the case.
The EFP markets have kind of exploded with deltas as high as 50 and 60 dollars where
you were to be able to get physical.
It's much more expensive to do so on the physical products that we sell points in bars.
They tend to be more expensive to acquire, typically because of the manufacturing processes.
They're still have numpty metal, as you can imagine.
And then, of course, the logistics of moving product to and from.
And then, of course, retailers obviously have to have overhead and have to serve our customers
and getting that product to the customer.
So you find that premiums tend to be a little bit higher on the physical product that we
shipped your home that you might find in a paper form.
But you're also finding you're getting a much better product as well as the consumer.
Obviously, you can go out and look at a GOP product out there and they'll say that you
can take physical, but you have to take a 400 hour Escobar.
You're fond of cream to be pretty high.
Realistically, for an everyday consumer to take on 400 ounces of gold is really not possible.
That's records and bars that a product like at MECs or a company like Adamic sells.
It makes it much more attainable for the in consumer.
You can buy fractional form, you can buy it one ounce product, which is our most common.
And you go all you have the kilo products if you want to buy a kilo goombah if you so
choose.
So that's one of the things it's just more, more attainable for the consumer.
It's also when you go to liquidate your metal, it's much easier to sell five ounces of gold
trying to find a buyer for 400 school board.
Investing in physical gold can also include investing in collectibles.
So what are the items with additional historical scarcity value collectibles?
Boy, a lot of individuals love to get into precious metals with metals because they see
an opportunity for the premium to grow much greater than the metal.
And that's typically what you're doing when you're buying a collectible product.
It's kind of like art, right?
You buy a picture that's been done by an artist, you're hoping to see it go up in value over
time.
That's really the kind of basis for a collectible coin as well.
You're really banking that that premium is going to increase even if the precious metals
value doesn't change at all.
Normally, when you start getting into premiums that are 20, 30 percent above the metal value,
you're really buying something gets more collectible product.
You're banking on his ability to appreciate over time, due to their uniqueness, a rarity
of that product.
We sell over twenty thousand products on that mix.
We get the large assortment in the world, we believe online.
We've got coins at two hundred thousand dollars.
We've got coins, you know, as little as five dollars.
The premium that goes with collectibles tend to make that where it's really in the eye
of the beholder.
You need to do your research.
So you're bonded collectible product.
You want to kind of understand what is auction values might be out there or what is selling
in the open market for today or what other products like it's selling for.
That might have come out five or 10 or 20 years ago and try to get a feel for whether
or not you feel that there's truly appreciation opportunities in that.
One of things I always recommend with serious buyers of collectibles is to focus on products
that are in slab condition, buying products that are in kind of slab form abraded.
Tend to be a safer bet, you also that you're getting authentic from one of the challenges
with collectibles sometimes is with areas of the world today able to counterfeit products.
You want to know that this is real.
Buying a slab coin, whereas serialization number can be looked up in the system.
You kind of know you're getting the real side on the physical side.
You want to make sure your products are always insured.
All right.
You shouldn't be paying for that.
The shipper should always be on the hook for that.
They should always be communicating to you through the process.
But from where they accept your order to shipping your two, which is delivered, they should
have a process to deal with claims and disputes.
And you want to know what those processes are before you buy.
Throughout history, Alchemist's have tried to create gold and governments have tried
to dilute the gold content of their coinage.
FEG products are still a problem today.
So how do you avoid getting Cotan by the counterfeits?
How do you avoid fakes?
May I tell you?
I think the most important thing is buying from a reputable dealer.
It's easy to fire up a Web site.
Anyone can look very big.
You also have to be careful with some of the basics we normally all go to.
Let me do a check of reviews.
But anyone can go out and put a whole bunch of reviews out there.
You want to see what the retailers engaged in.
Those reviews are engaging their customers.
You want to go to open forums and ask feedback from those who might be live individuals that
are going to be able to communicate with you.
You want to see how long we've been in business.
Companies that have been in business for 20 years are more likely going to be here another
20 years from now.
You want to know that you won't have that conference.
So but also very important is how the retailers deal with the problems.
That makes me take great pride in, you know what?
We're going to make mistakes and it's how we recover honest mistakes.
It really earns a customer for life and how retailers are dealing with those challenges.
Gives you a lot to know about the kind of company you're doing business with.
Obviously, the websites and the clarity.
And yet they and and how well they're transparent about how they do business is also helpful.
I think it's very, very poor.
You do your homework before you make that buy gold is now also available in digital
form.
But what is digital gold?
And perhaps more importantly, what is it?
Not digital metals, one of the most misunderstood products in the market today.
I'll describe how our product works at one gold.
I think that is generally how digital metals were at other leading firms like one.
So we're buying metal first and foremost, and then we sell that metal to our customers.
We assign fractional ownership of the product that's sitting in the vault today.
And then you're able to trade that whenever you like.
You can.
You can get it.
You can get out within a moment's notice.
But the most important thing is the metals always there under lock and key.
It's fully insured and consumers are protected.
Knowing that that metal is there in the past and fortunately, there have been companies
that don't have the physical metal.
So you want to do your research.
You want to make sure that the metals really there.
And what kind of confidence can the seller give you in knowing that that metal is there
in terms of what it's not it's not a crypto product.
One of the challenges behind crypto is typically there's not an intrinsic value in MIDI.
There's nothing really of value backing the investment you're making.
One of the things about digital gold is all the modern digital conveniences you expect
are now available.
When we built one gold, one of our goals was to make the process super easy to buy.
You can sell it.
You can do things like meet your bank account to allow funding of the transaction to be
very seamless.
You can then do redemption if you like.
So you want to convert your digital asset into a physical one, shipped your all.
No problem.
All right.
There on the user experience for the consumer or even in today's times, you're able to do
things like like the auto invest where you can buy five dollars and gold once a week,
do it over 52 weeks, and at the end of the year, you're going to have your five dollars
substitute and whatever the value of gold did in terms of up or down.
So you can't do that in a physical world where you're traditionally only shipping physical
to a home.
But I can do that when I'm owning physical involved and assigning ownership to the customer.
So earlier we looked at premium's within physical gold.
The premiums also exist within the digital gold space.
You're getting very attractive pricing in a digital environment today.
Our premiums are a little higher than they were, mainly because we can't buy metal at
a price we could buy before.
But even then, with that said analysis, Silver runs two percent today.
So you're going to spend basically 30 cents for an ounce of silver on digital gold.
If you go to my Web site, you want to buy it, but by silver round, it's going to cost
you three to four dollars an ounce.
So 30 cents for three or four dollars.
You can see it's very attractive from a from a cost acquisition standpoint.
And, you know, physical metals always there.
There's full insurance in place so you can feel protected and confident in your metals
really there.
If we've been on our guard about sellers of counterfeit gold, how do we go about ensuring
that a seller, digital gold is also legitimate?
A lot of times you find a digital offerings.
The backing is they'll put a board out there with some really cool names.
But the reality is who's actually financially backing the operation?
Question.
So transparency is critical.
The players behind it are very important.
High liquidity is super critical, right?
You want to be able to get in and get out on a moment's notice.
So ease of use and having technology available to you at all times.
Very, very important.
The ability to get redemption.
So the ability to exchange for physical.
We think is super important on the digital side.
I believe it's even more important to build confidence.
The bells there right in our offering.
You own title.
It is your medal.
We have insurance policies for you from the Lloyd's of London.
We have tier one vaulting partners that give attestations, statements, the medals physically
there, which we make available to our customers of all time.
Right.
We also make sure we always own the medal before we sell the out at all times.
We technically have a certain number days, the truth position if we have a surge.
We may have to take two to three days to secure the medal, but you need to know the medals
there at all times.
Digital gold has been developed to provide an additional layer of flexibility for gold
bullion.
Investor's House Kenneth to summarize the benefits that these various forms of storage
provide.
Should your uncle do your research?
It performs very well.
We look at the data all the time and you can imagine it's performed great in tough economic
times.
It gives you a hedge nationally portfolio.
So first and foremost, I do believe there's a strong, strong argument for why won't only
gold or silver in your portfolio makes a lot of sense.
The data doesn't lie.
But now, once you've decided you want a medal, you know, do your research, figure out what's
right for you.
Should you own paper and go to your brokerage firm?
It's an option, right?
They charge an annual fee.
Sometimes it's 30, 40, 50 basis points per year.
You're going to find that digital offerings, that that annual fee is more like twelve basis
points for gold product.
But there's a little bit higher premium the front end.
But it gives you far more capabilities than what you can do today with a broker.
Joffre, go seek yield on the fiscal side.
It really comes down to your comfort level of owning metal of your home.
We do a significant amount of business there.
We have over one point seven million customers that are doing that.
And we've had our best months on record here in the last three to four months.
So clearly a need a demand for physical metals high right now.
Premiums on both for are going to come back down.
They're a little higher than you normally are, but that's just because availability
of physical metal has become a challenge.
So precious metals ownership is the right thing.
It's really about what form you should have and how much you should have.
And then from there, do your research, pick the right players to partner with whether
it's IMX and one gold or someone else in the industry.
Make sure you find someone you can trust to take care of you through good and bad times.
There is clearly an incredibly powerful investment thesis for gold today, and everybody should
investigate the opportunity.
Many investors have already gained exposure.
These investors have varying degrees of wealth and requirement.
The fiscal and digital markets have therefore developed over time to provide incredible
variety, to cater for a wide range of tastes and needs within this space.
Kenneth makes clear.
Do your due diligence if now is the time to invest in gold.
Now is the time to investigate the variety of physical opportunities on offer.
And it's also the time to look at the flexibility that digital gold can also provide to all
investors.