The most hardcore goldbugs always advocated buying pure, physical gold — not mining stocks, and certainly not ETFs that represent a claim on some gold ingots held in a vault somewhere in the UK.
But the problem for physical gold fans is storage, and there’s no obvious answer for that.
One solution could be bank safety deposit boxes, but check this out: HSBC is tired of all these gold fans, using their safety deposit boxes to store a few gold coins, and they’ve given them the heave-ho.
WSJ: HSBC has told retail clients to remove their small holdings from its fortress beneath its tower on New York City’s Fifth Avenue. The bank has decided retail customers aren’t profitable enough and is demanding those clients remove their gold to make room for more lucrative institutional customers.
That move, of course, is creating headaches for companies in the physical gold business.
“I have never seen any relocation like this,” says Jonathan Potts, managing director of FideliTrade, the parent company of the Delaware Depository Service Co., which has two warehouses in Wilmington. FideliTrade’s two vaults have been filling up at an unprecedented pace, in part because it is taking in metal that has been ejected by HSBC.
Dealing with the fallout from HSBC’s decision has become a full-time job for David Norris, executive vice president of GoldStar Trust Co., a Canyon, Texas-based retirement-account trustee, which organizes metal storage for its clients.