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I am considering to buy gold bullion from my local bank and I am performing a risk analysis considering the storage. One major question is what happens if the gold bullion take damage. My bank offers to buy the gold bullion back at any time, but I am not sure how easy this will be if a bullion was deformed because someone dropped it or it was exposed to heat because of a fire.

Is there a way to sell damages gold bullion at a bank if

a) They took damage but the amount of gold is the same as the original bullion
b) If they took damage and the amount of gold has been reduced / some gold was lost.

If the bank will not buy it back, where else can I turn to? Will I get a reasonable price for damaged bullion?

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    I see buying gold as an insurance for me against a possible collapse of the financial system and I feel safer if I have solid gold in my hands. In a worst case scenario gold futures / indexes might not be worth anything. – Demento Sep 24 '11 at 11:07
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    There's a recurring theme of "collapse of the system." I'd suggest that if the worst occurs, you are best served with a stash of water, food, and weapons. – JTP - Apologise to Monica Sep 24 '11 at 18:28
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    Gold is soft for a metal, but you'd still have to drop it a long way or onto something very sharp to deform it enough to not be acceptable as bullion. You're more likely to break your foot. – poolie Sep 24 '11 at 21:57
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    I'm with Joe. If we go all apocalypse are you really going to trade your food supply for the capacity to make jewelry? You also do realize that Gold only has value for the same reason that cash money has value, right? That is, we have all agreed as a society that it does. – JohnFx Sep 25 '11 at 16:26
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    @joeTaxpayer - You forget the golden rule... He who has the gold makes the rules :) Though if the system collapses I am not sure how you can expect to get your gold from the bank. I would expect the government to swoop in and seize all gold assets in an attempt to stave off its collapse and loss of power. – user4127 Sep 26 '11 at 14:36
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There are bullion dealers who will buy gold no matter its form. You won't get the spot price as it's probably being bought same as junk jewelry or any other gold needing to be melted and recast.

If this is your concern, you should buy a fireproof safe, the kind people use to store their important documents, and add the gold value to home insurance policy. Do not get a safe deposit box at the bank, see mbhunter's comment and link.

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    Right, and specifically "can you sell it at a bank", the answer is no, they're just not generally equipped to do this. – poolie Sep 24 '11 at 21:55
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    DO NOT put them in a safety deposit box. abcnews.go.com/print?id=4832471 – mbhunter Sep 25 '11 at 23:32
  • The ABC article is 8 years old. Has the procedure changed? I'm posting it to skeptics.SE to find out. – Mindwin Nov 1 '16 at 13:45
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Are you talking about a country besides the US? And you're talking about a commercial bank, right? In the US, banks don't buy gold from consumers. The last time they sort of did (in the early 1900s), they were trading gold coins for gold certificates, and then they later stopped allowing consumers to trade them back. This is known by a well-known financial term: "Gotcha, suckers!"

If someone were naive enough to deposit a $50 Gold American Eagle today in a bank, the depositor will get a credit of $50 on their account, and later some clever person will ask the teller if they have any "strange money" lying around, and that lucky person will be able to withdraw a $1,700 coin for $50, if it lasted for even a second in the teller's drawer.

But let's say you're going to a place that does indeed still buy gold coins.

The discount depends on the type of coin, and the type of damage. An old (collectible) coin has a part of its value set by the gold value, and part by the collector's premium. Better specimens command better collector's premiums, so a damaged coin, as long as it isn't a chunk of the coin missing, won't be worth less than the melt value. (You may not get that much from a dealer, but it should be fairly close.) If part of the coin is missing, then the person buying it should weigh the coin and adjust the price proportionately.

It's likely, though, that if you have the items in a safe, you may have a puddle or blob of gold, but it should still all be there unless someone takes it. Gold melts at about 1850 degrees Fahrenheit, but it would take half the surface temperature of the sun for it to boil away. If it's unidentifiable, it may need to be assayed again.

  • I wondered about that as well. My bank sure doesn't deal in gold. Yet, OP wrote "My bank offers to buy the gold bullion back at any time" as if they make a market in this. – JTP - Apologise to Monica Sep 26 '11 at 14:48
  • My bank is in Europe and they buy and sell gold bullions to and from their customers. Thanks for your information so far! (+1) – Demento Sep 26 '11 at 15:58
  • I googled what you wrote in the first paragraph but found nothing about gold certificates in the US after 1933. – RonJohn Sep 26 '19 at 13:16
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if the gold is damaged it has to get melted first to measure the gold content. after this process you will get your money

  • It doesn't have to be melted in order to be assayed, so this is incorrect. As was pointed out, if it is "damaged", you are unlikely to get spot price because it will be bought as scrap at a discount to spot. – Daniel Anderson Nov 1 '16 at 18:27
  • Do you think any bullion buyer is going to believe that your gold is 99.999% pure through and through? Or is that 99.999% just a thin layer? The cost of being wrong are rather high, the cost of finding out are fairly low. – MSalters Nov 3 '16 at 15:58

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