Gold ― it's the world's oldest form of sound money and arguably the best store of value available. While the dollar's purchasing power has declined by over 96% since its inception in 1913, gold has not only preserved value, it has appreciated by over 4000% over the same time period.
Saving in dollars leaves you at the mercy of inflation where, each year, you lose more and more of your purchasing power. With the Federal Reserve printing almost 25% of all dollars in existence in 2020 alone[1], the U.S. faces a real threat of hyperinflation in the future.
While no one can determine when — or even if — this will occur, gold offers the only real monetary hedge against inflation. However, investing in gold is expensive, with an ounce costing more than $1,700.
If you want to save in gold, protect your wealth, and diversify your portfolio, Vaulted offers a unique method of investing in "the yellow metal".
Inside this review
What is Vaulted?
Vaulted offers you the opportunity to invest in gold without having to purchase physical bullion directly from a dealer or store it at your home.
With Vaulted, you can invest in 99.99% purity gold bullion, held for you at the Royal Canadian Mint (RCM), the most secure precious metals vaulting system in Canada.
Vaulted is an online gold investment company based in Durango, CO. When you purchase gold through Vaulted, the company converts the dollar amount you invest into the equivalent of physical gold bullion, which is then held for you in a segregated account at the RCM.
RCM is an ISO-9001:2000 certified precious metals refinery owned and managed by the Canadian government.
Who owns and operates Vaulted?
Vaulted is a division of the McAlvany Financial Group and International Collectors Associates, LLC. Known as McAlvany ICA and founded by Don McAlvany in 1972, the company has its headquarters in Durango, CO. McAlvany ICA has an A+ rating with the Better Business Bureau (BBB).
McAlvany ICA operates as a full-service precious metals dealer. Vaulted is the company's latest venture to help US citizens purchase gold for their retirement.
How does it work?
When you purchase gold through the Vaulted platform, you get ownership in real gold bullion which can be delivered directly to you or held on your behalf under the custodianship of the Royal Canadian Mint (RCM).
Vaulted stores its gold in 1-kilogram gold bars in the RCM vault. The bars all come with assay and marking that confirm the bars' purity and weight.
Each bar comes with a unique identifying serial number stamped into the gold. When you purchase through Vaulted, they give you an allocation into the bar, with all assay and serial numbers available for your review. If you ever want to take a trip to the RCM, you can check on your gold to see it's there (but you'll need to pay a fee to do so).
If you manage to save enough gold to pay for a full bar, you can request physical delivery. RCM ships your bar via FedEx, insuring the value during transit.
If you ever decide to sell your holding, Vaulted will credit your nominated bank account with the spot price of gold on the day, less commissions, a standard industry practice.
When you decide to sell, Vaulted also issues you with the necessary tax forms. Vaulted doesn't report any gold purchases to the IRS, and you only have to report your capital gains on your annual tax forms in the year that you sell.
VaultPlan
VaultPlan is an automated savings plan. After linking your bank account with Vaulted, you can configure VaultPlan to regularly and automatically purchase a pre-defined amount of gold at the spot price to build your position over time. For example, you could set up VaultPlan to buy $100 of gold at the spot price every two weeks.
Since this is an automated savings plan, you are exposed to the risk of market volatility. However, when you are of the opinion that gold is a long term hedge against deflation, you're most likely less concerned about average cost over time than you are about building your investment.
Who is Vaulted designed for?
Vaulted aims to make private gold ownership a reality for Americans. The company targets millennials and zoomers (Gen Z's) that can't afford to buy a kilo-bar but want to invest in the asset fractionally.
Vaulted is a good choice for anyone that wants to diversify their investment portfolio into hard assets. As gold is a stable store of value, it protects your wealth from the erosion of inflation.
Fees and charges
- Transaction fees: Vaulted charges a 1.8% fee on purchases and sales.
- Annual maintenance fees: Vaulted charges an annual maintenance fee of 0.40% on the value of gold holdings in your Vaulted account, billable every January and July. The fees cover the cost of physical storage at RCM, technology infrastructure, personnel, and marketing.
- Physical delivery charges: RCM charges a $50 fee for physical delivery, plus a surcharge of $2 per bar. FedEx charges you Next-Day or Second-Day shipping rates, based on weight and distance to your premises. Vaulted states the fees for delivery typically range around $150, with all deliveries fully insured.
Opening an account
Signing up with Vaulted requires your name, birthdate, phone number, physical address, and email address. This information verifies your identity and gives Vaulted a delivery address to send your gold in case you want physical delivery of your investment.
Pros and cons
Pros
- Real-time execution of orders at the spot gold price.
- Secure vaulting of your gold, at lower cost than a private vault or a safe deposit box.
- Low minimum investment.
- Automated investment plans.
- Lower tax rates.
- Gold is a stable investment and store of value.
- RCM is owned by the Canadian government, which has a AAA S&P rating.
- Precious metals are the world's oldest form of currency.
Cons
- Vaulted is not a SIC-insured company.
- Gold bullion investments typically take 5 or more years to generate a return, being more of a store of value than a vehicle for generating profits.
- Vaulted only supports investment through taxable accounts.
Alternatives
Gold ETFs
Gold ETFs give you exposure to the gold price, but they don't allow you to hold physical gold ― you only have it on paper ― which is very different from owning bullion. Gold ETFs are for traders that want to make profits on trading the spot gold price.
There are also options for investing in gold mining companies and other gold funds. Some of the most popular gold ETFs include:
- iShares COMEX Gold Trust ETF (IAU)
- SPDR Gold Trust ETF (GLD)
- Invesco DB Gold ETF (DGL)
These ETF products also come with annual fees and trading commissions. For example, the SPDR Gold Trust ETF charges a 0.40% fee, similar to the Vaulted pricing model.
Gold bullion
Gold bullion is the best way to own gold. There's no third-counterparty risk and you can hold your gold in your hands. Bullion can be purchased at market rates for a small fee.
However, you'll need to arrange storage. The annual fees for a safety deposit box costs can eat into the value of your portfolio, especially if your investment is small. You can always store your bullion at home or bury it in your yard, but there's a significant risk of theft.
Noble Gold
Noble Gold offers a fast setup of a gold-backed IRA and options for purchasing numismatic collectible gold coins. The company also offers "Royal Survival Packs". Noble Gold has investment options for all investors looking to diversify their portfolio into precious metals.
OWNx
OWNx is an investment platform that specializes in precious metals. It is a custodian with operations in Delaware and Texas where they store metal in your name. You do not have to be an accredited investor to use OWNx.
Verdict
Buying gold with Vaulted is easy, making it accessible for anyone in the US with a mobile phone. If you just want an easy way to get your gold investment started, it's hard to think of an easier way to do so than with Vaulted. VaultPlan makes it even easier to build your investment steadily over time.
Article sources
1 City A.M. "Almost a fifth of ALL US dollars were created this year, https://www.cityam.com/almost-a-fifth-of-all-us-dollars-were-created-this-year/". October 8, 2020.
