Where to Store Gold: The Best Jurisdictions for Owning Precious Metals
Our view is clear: Switzerland was, is and remains the world’s optimal jurisdiction for private precious metal ownership and storage.
Nevertheless, we recognize that many clients and investors will wish to consider and compare alternative jurisdictions. Toward this end, VON GREYERZ can separately arrange storage solutions for nearly any modern jurisdiction in the world, including those discussed/compared below.
Selecting the Best Sovereign Jurisdiction
Each investor, of course, must ultimately decide what is the optimal storage jurisdiction. This memorandum is designed to inform that decision. It is important to keep the following broad principles and observations in mind when selecting among optimal locations to own and store high-value levels of precious metals.
- Store Outside of Your Home Jurisdiction. Sadly, one of the key reasons for owning and storing precious metals outside of one’s own jurisdiction is to protect your assets from your own government. Throughout the centuries, sophisticated HNW individuals and private institutions have recognized the need to hedge/protect assets by legally creating a safe-haven firewall between themselves and their respective governments. This is to avoid unwanted yet potentially real controls (confiscation, taxation or capital) in times of political or financial crisis. However unlikely or unthinkable such controls and changes may otherwise seem, it is critical to focus on preparation rather than false hope in times of heightened political and/or financial risk in one’s home jurisdiction.
- Select a Safe-Haven Jurisdiction with a Superior/Long Reputation. Investors seeking the safest and most reputed wealth safe-havens should only consider those jurisdictions with the longest history, tradition, experience and record for protecting wealth. Such jurisdictions may often involve higher costs, but superior protection comes with a cost, and investors should be weary of the latest “trends” or cheapest fee structures and concerned only with the safest and most trustworthy locations. For this reason, we are not examining jurisdictions in areas known for political volatility (i.e., South and Central America in general) or new yet largely untested locations, such as Thailand or Dubai.
- Be Weary of Jurisdictions Subject to Vulnerable Alliances or Control. The EU, for example, exerts significant regulatory control over vaulting locations in Dublin, Amsterdam or Frankfurt, and the U.S. exerts significant influence over Canadian locales, making these locations less of a first-choice jurisdiction for such residents. In short, investors storing in openly allied/controlled jurisdictions are subject to laws and controls far beyond the particular jurisdiction in which their metals are held.
- Select Jurisdictions Known for the Quality and Safety of their Vaulting Facilities. Despite the various strengths of their tax and privacy regulations, many otherwise popular gold storage jurisdictions lack truly sophisticated, secure, and protected vaulting operations. This is one reason why jurisdictions like Panama, for example, are not considered herein.
- Seek the Highest Level of Professionalism. Investors deciding upon superior jurisdictional reputations must equally select the most reputed professionals within those locales. This means enterprises with an exclusive and openly-known expertise in precious metals, the ability to quickly acquire, sell and globally transport the metals while being directly accessible 24/7. In each of the top jurisdictions, there are the clear leaders with the highest reputations within those locales. These reputations are earned rather than marketed, and take decades to acquire.
Gold Switzerland: Bias of Conviction?
Our most recommended storage location for high-value levels of precious metals is Switzerland, a globally recognized and leading gold jurisdiction which we have favored since the founding of VON GREYERZ at the turn of this century. This jurisdictional preference was by no means a bias, but rather a high conviction choice based upon extensive industry knowledge and exclusive focus in precious metal ownership.
Ultimately, the most favored neutral jurisdictions for gold storage are those with superior political stability, a strong rule of law, an exceptional financial and logistical infrastructure, and again, a long and openly recognized tradition and reputation for preeminence as an international gold hub.
Our Breakdown of the World’s Best Gold Storage Jurisdictions
- Gold Capital of the World: In addition to its central bank owning one of the world’s largest gold reserves on a per capita basis, Switzerland is the world’s largest precious metal trading and refining hub, and home to the world’s most reputable refiners; 70% of the world’s gold bars are produced in Switzerland, and gold accounts for 29% of Swiss exports, making precious metals (and metal investors) a highly protected Swiss industry
- Political Stability: Switzerland boasts one of the world’s most de-centralized and historically stable direct democracies marked by three levels of authority: Federal, Canton and local
- Neutrality: Switzerland’s self-imposed neutrality status avoided all of the major European conflicts, including the last two world wars
- EU Independence: Switzerland remains outside of the debt-beleaguered and politically-fractured (post-Brexit) European Union, pursuing its own independent banking, tax and financial regulations
- Fiscal Stability: Contrary to its Western neighbors, Swiss financial prudence is marked by considerably less debt, with budget surpluses rather than deficits
- Monetary Stability: The Swiss franc is a popular reserve currency and trusted above most others due to its greater independence from EU and other Western financial policies
- Rule of Law: Switzerland boasts one of oldest and most respected adherence to a well-defined legal system and codes, with a particular record for enforcing privacy and property rights
- International Reputation: Switzerland is globally trusted as a safe and neutral situs, serving as the headquarters of multiple international organizations and treaty conferences
- Privacy & Free Currency Flows: Switzerland offers superior data privacy laws relative to other jurisdictions which protect investors from unwanted scrutiny; additionally, Switzerland allows for free-flowing currency and imposes no limits or declaration requirements on any amount of money brought into or out of the country
- Switzerland’s globally recognized reputation as a politically and financially neutral jurisdiction was undeniably impacted by Switzerland’s decision to join the West in US-led sanctions against Russia in February of 2022
- The superior bank privacy and secrecy rules which had made Switzerland unique in the world have been openly reduced in the wake of FATCA and other post-9-11 regulatory measures
- Compared to other, more modern jurisdictions like Singapore or New Zealand, storage and transactional fees in Switzerland are often more expensive
- Switzerland is considered by some gold investors as too traditional, too slow and not innovative in allowing, for example, ease of leverage or gold-backed loan provisions (and rightfully so)
- The “Switzerland of Asia:” Singapore boasts a modern setting and world-renown service reputation with a major gold presence/ecosystem for the purchasing and modern storage of precious metals uniquely poised to service a growing trend of eastwardly-moving wealth.
- Geographical Advantages: Singapore’s island location offers it a natural independence and protection from broader Malaysian incursions
- Safety: The city state of Singapore is known for almost zero crime relative to every other nation in the world
- Political Stability: Singapore is globally recognized for a consistent reputation of political neutrality and stability
- Strong Rule of Law: Singapore boasts an internationally recognized reputation for a transparent and reputed legal and judicial framework far superior to most other Asian jurisdictions
- Modern Financial and Precious Metal Infrastructure: The government in Singapore is both business and banking friendly and seeks to become a global gold hub; consequently, Singapore offers various tax, vaulting, trading and transport advantages to precious metal investors
- Singapore’s Asian locale and relatively closer proximity to an ever-expanding and uncertain Chinese military and geopolitical influence is a concern to many
- Despite being home to some of the most modern vaults, their structural security is typically not equal to bedrock/mountain-based vaults typical of Swiss facilities
- Political & Legal Stability: New Zealand enjoys a global reputation for democratic principles, a developed economy and an English-speaking, common-law based legal infrastructure ensuring consistent social stability
- Neutral Wealth Haven: New Zealand enjoys a long-standing and global reputation as a neutral wealth haven, and as such is known for a wealth-friendly government and thus far less likely to resort to gold confiscation
- Geographic Advantage: Situated deep in the Southern hemisphere, New Zealand is physically removed from the major political conflicts in the Western world, and despite its linguistic and cultural ties to the UK, is largely free from the UK’s political entanglements
- Gold Reputation: Unlike the UK, 99.5% purity gold and 99.9% purity silver are exempt from valued-added GST taxes; there are no import duties imposed on high purity precious metals coming into the country and New Zealand does not have disclosure rules for precious metals
- Like Singapore, New Zealand’s closer proximity to an ever-expanding and uncertain Chinese military and geopolitical influence is a concern to many
- Along with Australia, the United States, Canada and the United Kingdom, New Zealand is a member of the “5-Eyes spying network” which shares intelligence and other financial and personal data among its network
The Cayman Islands
- Location Advantage: Its proximity to the US and Canada makes the English-speaking Cayman Islands a popular destination for many North American investors
- Private Bullion Ownership/Storage: Class 3 UL vaults are available offering allocated, segregated and fully insured bullion storage at competitive pricing relative to other jurisdictions; precious metals are not subject to import or export duties or local taxes
- Banks in the Caymans require high minimums, and most vaulting is tied to banking operations which thereby adds to what we consider unacceptable operational risk
- The Caymans are a British Overseas Territory and therefor subject to potential regulatory impositions rendering the jurisdiction less favorable in the future (as evidenced by regulatory events in the Turks and Caicos)
- Major Finance Hub. Hong Kong is a globally recognized international finance center with an advanced wealth management sector poised to absorb growing trends of wealth moving eastward
- Precious Metal Hub. Hong Kong, which holds over two tons of gold reserves, is Asia’s leading precious metals hub, with refineries located within the city; it is also a major gold transportation hub with vaults within city or near the airport
- Lower Fees. Fees for gold storage in Hong Kong are traditionally lower than in Switzerland, and for many investors, the service is superior to certain Swiss counterparts
- Hong Kong is increasingly under immense political and financial pressure from mainland China, which is known for its obsession with gold imports; this raises the potential risk of outright confiscation in a worse-case regional scenario
- A counter-argument can be made that Hong Kong’s gold and financial markets will be protected rather than threatened by China’s rising powers in the region
- The Chinese can offer higher rates for gold than Hong Kong, which has experienced a hemorrhaging of existing sources of capital as threats of capital controls from China increase
- Hong Kong’s prior reputation as a major trading hub declined when China’s trade war with the US increased post 2014; more and more gold was transferred directly to Shanghai
- In short: rising political clashes between Hong Kong and China suggests further capital outflows and future uncertainty in the region
- Political and Fiscal Reputation: Austria enjoys a strong and long-lived reputation for fiscal conservatism, risk aversion and sound political and financial stability
- Rule of Law: Austria’s judicial system and protections are highly reputed within the EU
- Banking Secrecy: Austria enjoys a long tradition of bank secrecy and is among the few EU nations to openly fight with the EU to maintain these protections; safe deposit boxes in Austria have the highest reputation for secrecy/anonymity
- Exceptional Gold Reputation: Austrian mints and private vaults are often of the highest quality; gold (though not silver, platinum or palladium) is exempt from bullion tax
- As a member of the EU, Austria (like Germany and other EU gold jurisdictions) is subject to ever-changing regulatory controls and changes
- Deep and Sophisticated Gold Market: Germany is home to numerous and reputable bullion dealers (Reisebank) and is well-known for a population of risk aversion and conservative wealth management; it is a major gold trading hub offering a robust transportation/logistical infrastructure out of Frankfurt and enjoys VAT and other tax advantages
- EU Gold Leader: Germany tops the list of EU countries with an interest in gold and holds over 3000 tons of the precious metal in reserve; its gold markets are highly decentralized among its many reputable dealers and refineries (Heraeus, Heimerle & Meule, Agosi etc), wholesalers and retailers
- Political & Financial leadership: Despite recent pressures from geopolitical escalations in the Ukraine and larger financial and debt matters within the EU in general, Germany remains the obvious fiscal and political leader within the EU
- Rule of Law: Germany boasts a globally respected legal infrastructure and reputation for civil liberties and the enforced protection of financial and personal rights
- As a member of the EU, Germany (like Austria and other EU gold jurisdictions) is subject to ever-changing regulatory controls and changes beyond its sovereign influence
- Many of the vaulting facilities offered within Germany are tied to its banking infrastructure, which increases long-term operational and counterparty risks
- Political Strength: A globally recognized “cradle of democracy” since its infamous 1776 declaration of independence from England and its globally respected Constitution of 1789, the U.S. is internationally recognized for its democratic principles, three-branch governmental system and historical respect for, and protection of, individual civil and financial liberties
- Gold Hub: The U.S. is the world’s 4th largest gold producer and a major center for gold coin production and collecting; the U.S. reportedly holds the world’s largest stockpile of gold reserves at its Ft. Knox vault and is home to a vast system of private vaults, from coast to coast
- Rule of Law: The United States enjoys an internationally recognized reputation for its sophisticated common-law and codified legal system, backed by a respected and multi-court infrastructure
- Economic Strength: Home to the world’s largest economy, the financial, banking and legal infrastructure supporting this economy is attractive to both domestic and foreign enterprises as a leading international hub for complex security trading, bank finance and investment support
- Currency Leadership: The U.S. Dollar has been the world reserve currency since the Bretton Woods Conference of 1944, which has provided the nation and currency with undeniable advantages and powers in global financial markets
- Monetary Powers: The U.S. Federal Reserve manages both the price and supply of the world reserve currency, thereby exercising an unequalled influence over the monetary policies of the other global central banks
- International Reputation: Overseeing the world’s largest military force, the U.S. is the key actor and influencer in global financial and political policies which impact the spread and promotion of American principles of free market capitalism and democratic rule
- Fiscal instability: Combined U.S. public, corporate and household debt has reached record-breaking levels of well over $91T; as internal debt levels rise, fiscal expenditures follow, which places the U.S. in need of further fiscal spending despite rising trade and budget deficits; such forces are a direct threat to the nation’s future financial stability and currency dominance; various forms of “confiscation” (outright to taxation) are more likely
- Monetary stability: Unprecedented U.S. debt levels have been monetized by years of equally unprecedented money creation (QE) by the U.S. Fed, the inflationary consequences of which are now colliding with a rising-rate Fed reaction which has crippling effects on US and foreign credit and currency markets; these forces further combine to undermine the nation’s future stability as a safe gold haven
- Political instability: The foregoing credit, fiscal and monetary problems within the US have led to increasing inflationary forces, record-levels of wealth inequality and hence heightened social unrest marked by headline political instability and polarization by the political left and right; sadly, the U.S, does not hold the same social, political or even financial reputation or advantages for which it was hitherto known
- History of Control: Despite its global reputation for free speech, press, and the protection of civil liberties, these hallmarks of the U.S. system have fractured under increasing evidence of press censorship, a weaponized Dept. of Justice, growing distrust of election policies and COVID lock-down overreach which has lead to the emergence of “two Americas” of blue and red states; continued political and social fracturing heightens the risk of increased governmental controls, including risks of bullion confiscation (via direct means or via taxation policies) for which the US is already known
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