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2 Reasons why you should store some of your gold overseas.

store gold in London

Owning gold is all about protecting yourself and your wealth.

It’s the money you keep outside of the banking system and out of reach of Wall Street. It’s about planning for the future and avoiding risk. It’s about coming out on top in the event of a catastrophic social or economic event.

To achieve this end, most people store their physical goal either at home or in a bank safety deposit box.

For most eventualities, that’s fine.

But there are scenarios that would make it hard or even impossible to access or benefit from owning gold when it is all stored within arm’s reach, or even inside of this country.

If you really want to cover the bases and minimize risk, you need to hold at least a proportion of your gold overseas.

Here are a couple of reason why.

1. Government confiscation of your gold

It is hard to imagine, but in a time of severe financial crisis, the government could demand that private citizens hand over all the gold bullion they own.

It happened once before during the Great Depression of the 1930s.

Franklin D. Roosevelt passed a law that demanded everyone take their gold to the bank and convert it into cash…at a very low price.

“I, Franklin D. Roosevelt, President of the United States of America, do declare that said national emergency still continues to exist and pursuant to said section to do hereby prohibit the hoarding gold coin, gold bullion, and gold certificates within the continental United States by individuals, partnerships, associations and corporations and hereby prescribe the following regulations for carrying out the purposes of the order.”

Why did he do it? Because the financial system needed emergency liquidity. They needed everyone’s wealth to move into the system.

Many argue that this could never happen again. But then again, the idea was probably inconceivable to everyone before 1933 as well.

Storing some of your gold overseas, perhaps spread through two or more countries, would protect you from a similar event.

2. The imposition of exchange rate controls

Imagine a time of political, social or economic unrest that drove you to want to leave the country.

Granted, this is also an unlikely scenario, hopefully. But owning gold is all about being prepared for an uncertain and unknowable future.

So let’s say you have decided to move somewhere else in the world. Naturally, you’ll want to take all or some of your money with you.

Under normal circumstances you could do that. But if things are bad at home, the government could have put in place some exchange rate controls, which could prevent you from transferring money out of the country.

That would be a problem unless, of course, you had some gold stored overseas which you could convert into cash.

You wouldn’t need the gold stored in the country you plan to move to, just somewhere without those same exchange rate controls.

How to buy and store gold overseas

My first choice is always to use BullionVault. You buy your gold online through their website, and that gold is then stored in one of their accredited vaults, in Switzerland, the UK or the US. (You get to choose where it is stored.)

In addition to now having some of your wealth safely tucked away elsewhere in the world, there are a number of other benefits to using BullionVault – such as being able to buy gold at the professional rate, not the retail rate – which I describe in more detail in this post.

We none of us like to dwell too much on life’s worst-case scenarios, but if you are already protecting your future with gold, it makes sense to store at least some of it overseas.

About the author: DH Kenrick is a student of world economics and a committed gold enthusiast. 

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