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Recently, I have decided to diversify my portfolio into some precious metals.

However, I found out that the cost of holding gold and silver is really high. The website I was trying to buy from offered 0.01% monthly storage fee (min. $4 including insurance). To a retail investor that seems crazy high. My portfolio would be bleeding costs of holding the metals in no time.

Is there a way to reduce the fees? I don't need to see the physical metal, I simply want to have ownership of the metal and enjoy the capital gains, if any, in the future.

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    do you need to hold the physical commodity at all? Most people use futures to have the same effect as holding a commodity without the costs.
    – MD-Tech
    Apr 21, 2017 at 10:50
  • No, i have no interest in holding the commodity. However, I am not comfortable with using futures since I have never done it before. Is that the only way to go about doing this?
    – MH.Q
    Apr 21, 2017 at 10:53
  • it is the cheapest way of going about it. If you trade spot metals for delivery you could store them in your spare bedroom for (almost) no cost other than delivery costs at purchase and sale. You are not comfortable with futures but have you ever traded commodities before. Having worked with the LME (London Metals Exchange) I would suggest that trading spot commodities is actually harder.
    – MD-Tech
    Apr 21, 2017 at 10:58
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    Note that I changed to metals for storing in your own home. Don't try to do this with lean hogs, bushels of wheat etc.
    – MD-Tech
    Apr 21, 2017 at 10:59
  • Hmm... Thank you for the insights! will definitely consider this carefully :)
    – MH.Q
    Apr 21, 2017 at 11:06

3 Answers 3

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The SPDR ETF GLD? The fund intends one share to match 0.10 ounce of gold, and the wikipedia article states it's one of the top 10 holders of bullion in the world.

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    GLD has a fee of .40%/yr vs OP's .12%. The $4 min changes the math, but once he's over $12K or so in value, his deal is better. The best thing about using GLD as a "store of value"? After 50 years, whatever the price of gold, they've taken nearly 20% right off the top. You had 100 oz? Now you have 81.8.
    – JTP - Apologise to Monica ♦
    Mar 31, 2018 at 12:53
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I have some gold investments. I simply bought a couple of small bars of gold and put them in my house. That's pretty cheap in terms of storage costs. Why don't you want to do it this way? You won't find cheaper storage.

Anyway, looking at the numbers presented; 0.01% holding fee per month. So after a year, you'd be down around 0.10%

So if you had 100 dollars' worth of gold, ignoring the minimum charge and ignoring changes in gold price, after a year you'd have 99.90 dollars' worth of gold.

Charging ten cents per year, per 100 dollar's worth of gold, doesn't sound like a high charge.

4 dollars minimum charge per month on that would be a killer, though. Sounds like they want to discourage small investments.

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  • When you do physical storage, i feel that liquidity goes out the window. Do you feel that way? and yeahh the main concern is the minimum charge definitely!
    – MH.Q
    Aug 6, 2017 at 15:03
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The cheapest way to store physical metals is to take delivery, and keep them yourself.

The "goldbugs" have a saying - "if you don't hold it, you don't own it". Or, to put it another way, just because somebody says that there are a pile of gold bars in a vault with your name on them, doesn't mean that there actually are any gold bars in that vault.

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