Why BullionVault? FAQs

What is BullionVault all about?

It used to be very difficult for private individuals to find a simple, safe and cost-effective way of buying, storing, and then selling gold, silver, platinum or palladium. The main problem was the sheer size of the investment you needed to make to access the best prices - and there were extra complications with integrity and storage too.

Big bullion bars & the professional bullion market

• The most competitive gold, silver, platinum and palladium prices in the world are enjoyed by the participants in the professional bullion market: large dealers, refineries, government agencies and bullion banks.
• This professional market only deals in what are known as Good Delivery bars. If you're not trading these bars you are excluded from their market - and their very competitive prices.
• Good Delivery bars are cast by a small group of metals refiners accredited by the professional bullion dealing community. They are accurately assayed and guaranteed always 99.5% pure gold or better. The market trades their pure gold content, known as fine gold, so you don't pay for the impurities.
• From the day they're first manufactured, Good Delivery bars are kept in bullion vaults recognized and monitored by the local gold dealing community. Every time bars are moved a careful record is maintained, showing continuous storage through trusted hands. This guarantees gold bar integrity in a way that keeping gold at home, or even in safety deposit boxes, simply cannot match.
• The result is that professional buyers accept deliveries of these bars direct from the seller's vault without re-checking their purity - and that greatly reduces bullion dealing costs. This is why they're called Good Deliverybars.
• Good Delivery bars are large - usually 400 troy ounces each (12.4kg) for gold, 1,000 troy ounces (31.1kg) for silver and between 1 and 6kg (32.2 to 192.9 troy ounces) for platinum and palladium. The professional market doesn't allow you to own part of a bar.
• But having enough money to buy a whole bar or two would only solve half the problem. You still need that relationship with a formally recognized vault to look after the bullion while you own it. The starting balance for an accredited storage account is 15 - 20 of these 400-ounce bars, and the agreements take a lot of time, cost and effort to set up.
• These barriers keep private users out.

Direct access to the very best prices

• BullionVault changes all this. It enables people from all over the world to own professional market gold, silver, platinum and palladium and keep it in any quantity in officially recognized bullion vaults in locations around the world.
• All BullionVault bullion is held in Good Delivery form. So when you come to sell, your buyer is able to trust the purity and weight, which is guaranteed by BullionVault itself because we know that you never had the chance to corrupt it.
• So the dealing spread for gold is typically 0.2%, about one-twentieth of the equivalent cost charged to private customers for gold coins and small bars.
• You can buy just a small portion of a bar. You can trade on-line in increments as small as 1 gram - currently about $64 for gold.
• BullionVault is not a unit trust / mutual. There is no 5% front end subscription load. When buying gold, silver or platinum on our order board you pay a commission whose maximum rate is 0.5%, falling progressively when you invest above $75,000 to the spectacularly low rate of 0.05%. When buying or selling gold, silver, platinum or palladium at the Daily Price you pay a flat commission of 0.5%. Daily Price orders placed in British Pounds, Euros or Japanese Yen incur an additional 0.3% currency-switching fee.
• Storage charges for gold are down to wholesale rates of 0.12% pa ($4 per month minimum) with insurance included. That's less than a tenth of the storage fees charged by retail banks, and less than one-third the annual fees charged by typical exchange-traded gold funds (ETFs). Storage charges for silver, platinum and palladium are 0.48% per year ($8 per month minimum).
• BullionVault users also save money because they deal directly with each other, willing seller to willing buyer, by using our order board.
• You make a further big saving at settlement time too. You don't have to arrange for expensive armoured courier bullion collections.

Your safety & security assured

• For as long as you own it your bullion remains your outright property, stored in specialist facilities reserved exclusively for BullionVault clients and run by accredited professional vault operators who are wholly independent of BullionVault. You choose the storage location :- Zurich, London, New York, Toronto or Singapore.
• You are truly isolated from the systemic risks in the financial system. You have taken legal delivery of your bullion and you own it directly in physical form. Unlike the huge majority of investment products no company's financial failure can deprive you of this. BullionVault, BullionVault's bankers and BullionVault's vault operators could all fail - and your gold, silver, platinum and palladium is still safely yours.
• Each and every working day BullionVault publishes on the internet the complete register of all its bullion owners - with each owner listed under a public nickname known only to themselves.
• This register reconciles exactly to the official bar list published with it. The bar list is produced by the vault operator, independently of BullionVault. No other custody business in the world subjects its records to this continual, daily, public scrutiny.
• BullionVault is also the only bullion market in the world which stays open 24 hours a day, 7 days* a week.
• Because you and all other BullionVault users have a right to sell whole bars directly onto the main market - one of the deepest capital markets in the world - you'll always find a buyer paying a fair price when you want to sell.
• You even have the right to withdraw bullion from the vault, although the huge majority of BullionVault users leave their bullion right where it is. That way they continue to enjoy the benefits of owning Good Delivery bullion which - remember - does not leave the professional vaulting circuit. (There may be additional fees, taxes and reporting obligations for bullion withdrawal.)
• Any purchase you make through our order board is settled instantaneously - we checked the seller had sufficient bullion in your chosen vault before it was sold to you. Any sale you make is settled instantaneously too - again we checked the buyer had deposited sufficient money before your bullion was bought from you. BullionVault offers nobody credit, so nobody can let you down after you deal.
• You can withdraw your money immediately after you sell. Your money will leave your BullionVault client account by the end of the next business day (London time). There is no minimum period for investing.
• For your safety - and to obey international anti-money laundering laws - your money is sent straight back to your original funding bank account. Money transmissions to your original funding bank account are fast, safe and low-cost.**
• And we make sure you can't make an expensive mistake either. You won't be able to buy more bullion than you can pay for, or deal at a silly price. Firstly that's because the system eliminates all of these obvious user errors, but it's also because we invite you to phone us, and we'll talk you through your first deal one button at a time. We check that everything is exactly as you want it while you're still on the phone. You'll be amazed how simple it is.

This combination of safety, value, accessibility, transparency and service has quickly attracted 100,000 users. It's created a private bullion store owned by the citizens of over 175 countries and worth more than $4.1 billion, making BullionVault the most popular direct gold, silver, platinum and palladium ownership service in the world.

* We sometimes close the order board for a few hours at weekends, for maintenance.

** Where commercial or political concerns dictate it, your money may be returned to another bank account, but only at your instruction and only subject to extensive identity and security procedures.

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Why do active traders choose BullionVault?

For active traders the bottom line is the cost of trading. Traders cannot expect to make a profit if they are always paying commissions and/or the spread. It's as simple as that. BullionVault allows active traders to choose to behave like a market professional, by quoting prices. This allows the true trader a negative cost per trade, through the opportunity toearn the spread. To see the power of this examine the net effect of continuous quoting on BullionVault on an unmoving price with a $2.66 spread at $1300 per ounce of gold. The quoter earns rather than pays the spread - just like a market professional. It soon outweighs the cost of commissions:-

There are very few systems in the world which will grant you access to the spread, and you can see why. Spread access is what really gives you the ability to profit from trading, and that's why most businesses keep it for themselves. But notice that you are not making a profit at BullionVault's expense here. What is happening is that the liquidity you provide is being consumed by a retail client who is taking the price you make, and paying the spread to you and a commission to BullionVault.

BullionVault, in the tradition of a true exchange, is acting as a meeting place. BullionVault's capital is not employed in the transaction, and the resources of both parties are on hand to settle the transaction instantaneously. This is how BullionVault is at no material risk, and why it is satisfied to earn the tiny amount of 0.05% on your side, which is greatly exceeded by the likely 0.5% of commission which BullionVault makes on customer who accepts your price.

We think this is fair. A long term holder who trades infrequently pays a higher commission for a service he uses infrequently, but where he expects to find ample liquidity when he wants to sell. A liquidity provider pays a much lower commission rate which means he can earn a profit from providing liquidity. More to the point - and this is very important - people are entirely free to choose which one they want to be. The commission rate simply reduces automatically as people trade more.

BullionVault's objective is to be the cheapest, safest, and most accessible worldwide market in privately owned bullion. There is no safer way for private individuals to deal in and own gold, silver, platinum and palladium, and there is no fairer proposition to the trader. But always be aware that trading is a risky business because markets can swing against you. When you quote prices you need to be ready to act as markets move, otherwise you will find your prices become unduly attractive to other participants.

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How much will my bullion cost?

When you buy through BullionVault's order board you will pay a small fraction over the current world spot price for bullion. For orders placed at the Daily Price there is a single commission rate of 0.5%, with an additional 0.3% currency-switching fee if the order is placed in British Pounds, Euros or Japanese Yen.

The process of entering an order on BullionVault requires you to specify your price limit. You will never deal on terms worse than the limit you choose. You will frequently deal on better terms - i.e. lower prices when you buy, and higher prices when you sell.

You can continually check the prices yourself on the order board.

You pay a commission to BullionVault - as explained in the next section.

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How much will I pay in BullionVault charges?

You will pay a trading commission and a custody charge.

• Commission starts at 0.5% and reduces steadily to 0.05% depending upon how much gold you trade each year. The discounts start when you have dealt $75,000 in the year so far - including your current trade.

  • $5,000 purchase comm: max $25 [0.5%], down to min $2.50 [0.05%]
  • $10,000 purchase comm: max $50 [0.5%], down to min $5 [0.05%]
  • $50,000 purchase comm: max $250 [0.5%] down to min $25 [0.05%]
  • $100,000 purchase comm: max $400 [0.4%] down to min $50 [0.05%]
  • $500,000 purchase comm: max $800 [0.16%] down to min $250 [0.05%]
  • $1m purchase comm: max $1212.50 [0.12%] down to min $500 [0.05%]

  Review complete commission bands here.

• For orders placed at the Daily Price there is a flat commission rate of 0.5%, with an additional 0.3% currency-switching fee for orders placed in British Pounds, Euros or Japanese Yen.
• For large deals (e.g. more than 25 kilos of gold or 1 tonne of silver) you can elect to deal on the main professional market. Depending on prevailing market conditions, this may get you an even better price. Call us if you wish to investigate further.
• There is a custody charge of 0.12% per annum for gold, which is still less than 1% after 8 years, and it includes insurance. For silver, platinum and palladium the custody charge is 0.48% per annum. The custody charge is subject to a $4 per month minimum for gold and $8 per month minimum for silver, platinum and palladium.

BullionVault's bank deducts the cost of wiring your money back to you from the sum sent when you withdraw your money. You can trade as many times as you want within BullionVault without incurring this charge, but when you decide to send money back to your bank account you will then pay it once. It's typically between $10 and $30.

Review the complete tariff here.

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How does BullionVault get me a better price?

Whether you're a buyer or a seller there are three big savings when you deal gold, silver, platinum or palladium on BullionVault.

The first is that BullionVault only deals Good Delivery professional bullion. We'll come back to that in a minute.

The second is that there is no need to hire an expensive armoured truck to collect your bullion or make delivery when you sell.

But let's explain about the third - BullionVault's market.

Other bullion providers allow no free price competition. Because you must buy and sell from them there's a tendency to wide spreads between buying and selling prices, which is how they make their money.

BullionVault gets you lower dealing costs because all our users - including you - compete with us to quote the best buying and selling prices. This introduces the market competition which naturally reduces bid/offer spreads andsaves you money.

For example:-

Imagine, like many other services, BullionVault decided to quote [for you to sell gold] $1200 - $1250 [for you to buy]. That's typical of the spread with many coin dealers. It's a 4% loss on your gold investment straight away.

But on BullionVault, to save that 4%, you might try bidding $1225. Your bid gets quoted on the order board, on the green Best Bid button. Now the best prices quoted on the board are $1225 (your bid) to $1250 (BullionVault's offer). The spread cost is halved, to 2%.

On BullionVault's platform:

Now the best prices quoted on the board are $1225 (your bid) to $1250 (BullionVault's offer). The spread to everyone else is halved, to 2%.

Do you see how now any seller who comes along to sell at the best price will be selling direct to you, and you'll be buying from them $25 per ounce cheaper than BullionVault's price; that's a 2% saving for both of you.

Then a selling customer decides to beat BullionVault's offer price too, and offers his gold at $1228. You see how he's now making himself the most attractive to any new buyer, by offering gold $22 cheaper than BullionVault. His price goes on the button too - as the orange Best Offer.

Now the quoted spread to everyone else is $1225 - $1228, which is only 0.2%. BullionVault is cut out from the middle. Open and fair competition has reduced the cost of the spread from $50 to just $3.

On BullionVault this is going on all the time, as sellers quote directly to buyers (and vice versa) cutting us out unless we quote better prices than our own users. The result is a huge reduction in the spread for everyone. BullionVault prices usually show a spread of about $3 per ounce of gold. That's 0.2%, not 4%, which is a 95% saving in trading costs for you.

On BullionVault all users decide for themselves if they wish to make or take prices, and that is why on BullionVault the average spread paid across all users is exactly zero.

How about trading actively and earning that spread for yourself? Look carefully at the numbers. We've spelt it out clearly here. BullionVault is one of a tiny number of businesses around the world which grants you access to the spread and lets you choose to participate like a market professional would. It's one big reason the system has quickly proved so popular.

Now - back to that other big saving. If you haven't already read about Good Delivery bullion learn about it here.

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What about liquidity? How can I be sure I will get a fair price when I sell?

BullionVault is not a closed ended system with only a limited amount of gold, silver, platinum and palladium. Think of it as a buffer zone - between the large good delivery bars of the professional bullion market, and the smaller dealing and storage requirements of the private individual.

BullionVault maintains a float - equivalent to several big bars of gold (and many more bars for silver/platinum) - which it adds to and takes from by trading in any amounts with other BullionVault users. After a period of customer demand our float gets diminished, and we go and buy several more big bars on the main market. We do the opposite if there have been lots of customer sales.

But also any other BullionVault customer has the right to buy and sell on the main bullion markets too. To do this they must be able to settle the main market bullion unit. This excludes most (but not all) BullionVault users because the unit size of a main market deal - two Good Delivery Gold Bars of 400 troy oz, a tonne of Good Delivery Silver or at least 18.66 kilograms of Good Delivery Platinum - is so big. This right is very important, because it ensures that BullionVault has no monopoly privilege to operate in this buffer zone, and that keeps BullionVault prices fair.

How does this work in practice? Suppose you - as a small seller - were being disadvantaged by prices being too low on BullionVault. Then bigger private buyers would start competing to buy any available bullion, because it would be obviously cheap, and they could immediately sell it on the main market for a profit. In this way the larger traders' demand on BullionVault would drag up the BullionVault price to the main market level by the natural rules of market forces.

In just the same way if BullionVault were disadvantaging a smaller buyer, by quoting high prices, then larger private sellers would start competing to sell on BullionVault, and exercise their right to buy the cheaper bullion on the main market - again making a quick profit and again causing natural market forces to balance the price on BullionVault to the price on the main market.

This probably sounds unfair to some people, because they might think that this privilege to make quick profits is reserved to bigger customers. But in fact in a fairly constructed marketplace like BullionVault it doesn't work like that, because the possibility of profiting from a difference in price between two markets has the effect of uniting the two markets' prices, so the price differential doesn't appear in the first place.

That is exactly what has happened on BullionVault. There is never more than a fleeting instant when BullionVault prices don't fairly reflect main market values.

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Why is the price of bullion here sometimes above the spot price?

The form of your bullion is a Good Delivery bar already stored in the BullionVault section of the professional bullion market vault selected for storage.

This is slightly different from the form for which you can expect to see prices quoted all over the world. The world spot price for bullion is quoted on an unallocated basis. Spot market buyers pay extra fees for large bars to be fabricated into smaller bars or coins, and they must pay for collection and delivery too, because the spot price only includes making whole bars available for collection at the seller's vault.

A bullion courier needs to be recognised by the vaults of both seller and buyer - because there are delivery procedures necessary for maintaining the chain of integrity. Physical delivery is awkward and expensive to arrange in small delivery amounts because the procedures require armoured transport and careful controls on staff.

In BullionVault you are buying physical bullion which has already been fabricated and delivered into a qualifying vault and both are included in your price - regardless of size.

BullionVault gold, silver, platinum and palladium is equivalent to spot gold, silver, platinum and palladium inclusive of physical delivery, which eliminates the unsecured credit risk of unallocated bullion and the costs of fabrication and shipment, which is why it is considered slightly more valuable than spot gold, silver, platinum and palladium. The extra value becomes apparent when you sell, because other buyers pay more for fully delivered bullion. Both you and they enjoy the extra benefit of owning bullion which definitely exists and does not give rise to extra expenses in settlement.

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Where can I learn more about gold?

There are many resources on the web for finding out about gold. A good place to start is our news and analysis site, BullionVault.com/gold-news.

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