Since gold has begun to be used as a currency in 560 BC, it has maintained its value. The same cannot be said about paper currencies. Gold has become a trusted asset for those looking to protect their wealth, diversify their assets, protect against inflation, or hedge their higher risk investments against black swan events. Since gold has been around for so long, most investors are fully aware of its investment benefits, but most may not be fully aware of the best offshore gold storage options out there. Read this article to brush up your knowledge about safe storage of physical gold in Switzerland, various gold investment options, related costs, and why Switzerland is an important global player in gold refining.
A stable economy with low cyclicality, a neutral political status, a strong currency, and a reliable legal system with strong asset protection are some reasons why Switzerland is highly regarded around the world when it comes to storage of physical gold. Switzerland’s public debt to GDP ratio is below 40%, which is one of the lowest globally. Switzerland’s budget and trade balance have been positive for decades.
Inflation in Switzerland has been structurally low for decades and is still one of the lowest globally with core inflation at 2.4% as of February 2023. The Swiss Franc is strong and considered a safe-haven currency. Over the past 20 years, the USD has lost more than 40% against the CHF and about 75% over past 50 years.
When it comes to safe custody of physical gold, Switzerland has been a safe-haven jurisdiction for centuries. With Argor-Heraeus, Cendres Métaux, Metalor, PAMP, and Valcambi, five of the world’s largest and most important refineries are located here. Up to 70% of the gold mined globally is melted down and processed in these refineries. This places Switzerland at the center of the international gold trade.
As one of the world’s largest gold exporters, Switzerland has a well-established system for safe custody of physical precious metals in secured and insured facilities across the country. This enables investors to hold direct investments in physical gold bars or coins off-balance sheet as segregated assets in a low-risk country in a low-risk bank. As opposed to holding a certificate such as an ETF saying you own gold, holding physical gold in a secure facility is the safest option available to store parts of one’s wealth for many years.
Switzerland has one of the world’s largest gold reserves per capita and is one of the leading countries in terms of offshore gold storage. Gold can be stored in the main vault or a private safe deposit box of a bank. Gold can also be stored outside the banking system, either in a Freeport or at ultra-safe private vaults in Switzerland.
There are several forms of physical gold that can be bought through our partner banks, including:
The costs of purchasing the bullions will vary depending on the partner bank, the quantity purchased and the delivery location.
Generally, there is a small trading fee and premium to be paid over the spot price of gold. The premium per ounce depends on the size and value bought and decreases with larger purchases. It covers costs such as melting/manufacturing, transportation, and handling of the bars. There are no additional charges for a delivery to the banks’ common vaults. Delivery to a custom location will come with an extra fee.
Due to their intricate design, proof coins command higher premiums. Our clients generally purchase gold in the form of bullion bars, which are the most cost-effective way of buying and storing physical gold. These are also most easy to resell, as they represent the main form of phsical gold investment for large institutional investors.
Certain banks will apply an additional commission to store gold. As an independent asset manager, we have close relationships with the best Swiss banks and can help you choose the most cost effecive custodian for your gold investment.
Purchasing physical gold can be done easily and remotely. Once a relationship is set up and a Swiss custodian bank selected, the client can give us the order to purchase a defined quantity of gold. We will place this order with the partner bank, which will undertake the steps to buy the bullions and have them securely delivered to their vault or to a specified worldwide location.
In recent years, there has been a surge of fake gold on the Internet, coming out of places like China. Buying physical gold with a Swiss bank is a safe option. Anyone who purchases gold bullions from a Swiss Bank can be confident that they have undergone extremely rigorous testing before being certified and put up for sale.
No matter the problem, Alpen Partners will handcraft a solution for you. We know that there is no one-size-fits-all when it comes to financial success. Our approach involves working with our clients to make a unique plan to meet their needs. Rest assured that we will work hard to guide you through the process of meeting your financial and personal goals.
Contact us to enhance your financial plan today.