I am not a big believer in conspiracy theories that say most of the gold held by the US Federal Reserve is fake or non-existent. Yet as this article and others indicate, more fake gold is finding it way not only into individual retailer hands but private bullion banks it would seem.
This may put into question whether gold being held from certain ETF investment funds, to specific banks to even under central, bank care is as pure and in total value as statements indicate. And who wants to be the unlucky holder of it by buying it over the counter from various dealers. While, I am not convinced that the vast majority of authorized dealer gold is fake, this above article should give pause.
It is also interesting to note how more countries (and economically serious ones, not only Venezuela) haveordering back their gold from the United States Federal Reserve in recent years.
This coincides with the massive increase in US federal debt and growing but not panicking worries about main reserve currencies, especially the US dollar. Now with BREXIT, the Germans may want to accelerate the movement of their gold out of the US to better convince markets that they have more guaranteed access to it if worries develop if/when Germany leaves the euro.
Commensurate with that are some slight concerns that the multi -billion stash of German government owned gold in the US may not be up to the purity standards of Berlin. I understand some of the returned Germsn gold has been resmelted with new German government put on it. Other financially serious countries such as Austria and Holland have asked for their gold to be returned from the US Federal Reserve, not coincidentally.
What then does a retail investor do these days when buying real gold for an investment knowing their are growing concerns about debasement and gold fraud. Personally, the first thing I would do just speaking for myself woukd buy from the most reputable dealers and countries that are not financially desperate, now or in the predictable future and do not have histories of gold confiscation.
Unfortunately given the sorry stories above,I would thus tend to avoid the US market even with reservations but not totally with the US mint. President Franklin Roosevelt’s administration essentially confiscated gold during the Great Depression.
Then one has to remember that European central banks have held significant amounts of gold with the US Federal Reserve. Without getting dramatic, I would prefer any gold source backed there to be avoided or only purchased if it had been resemelted recently under the supervision of the German, Dutch and Austrian central banks If better still the Swiss Central Bank I personally would not touch an ounce of gold sourced diectly out of The Federal Reserve as a preference not as a total essential need.
To get around these concerns even better, I would prefer to buy directly from the most trustworthy sources particularly ones getting their gold gold emanating primarily from their own gold mines. Two countries come to mind, Australia and Canada mints that include direct sales of their gold coins. Beware there are many private dealers making it look like they are as good as the government mint.
One of the main problems though is that new issuances of gold coins by these mints gets sold out very quickly. After all dealers know of their high value.
For Americans and those citizens worried about their current and future rights to hold gold and get a global marketable value, you can put it in a deposit box outside your country. Canada now has a major private depositary near Toronto. Places like Australia, New Zealand and Switzerland and likely Singapore might be good places to buy and store gold. If you hold significant amounts of gold or intend to geographical diversification is not a bad idea with Panama as and added place to widen that diversification from the evermore economically troubled .West.
There can be laws on residency that you may have to be aware of if you are a foreigner purchasing gold in various countries. Hence jewellery and related apparel purchases are the easiest away around it by buying from reputable brand stores like Cartier etc.
But if you are strictly interested in just investing in hard gold, again purchases from certain government mints are best but of course not in maximizing anonymity unless a shell company is being used with nominees etc. Follow all laws should be yiur motto.
One way to get around the whole problem of gold purity and storage is to buy shares of reputable gold miners or gold miner ETFs. There can be much volatility so buying too many of these shares may not be advisable.
However, major investors like Kevin O’Leary indicate that having a portfolio with up to 5 percent of its total value held in gold is prudent. In the brutal world, increasingly so, can one afford not to be insured by holding some gold?
If so, hold some of the real stuff over paper gokd investments might be a good thing. Just make sure if you do buy the real stuff it is not totalky fake to even a small percentage fake. Buy from reputable retailers and even better, mints of governments that are relatively trustworthy not to undermine your investments short term to long term could be a solution.