A Self-Managed Superannuation fund can be used to invest in precious metals like gold and silver. There are basically three ways of buying gold for your SMSF. You need to know what they are before you buy gold bullion SMSF.
- Buy physical gold bullion from reputable refineries, mints, and dealers
- Gold Exchange Traded Funds (ETFs), which are essentially paper money.
- Buying Shares in Gold mining and gold production companies
When it comes to buying or selling gold for whatever reason, you need to work out. What exactly it costs to trade. The spread for physical gold is about 5% depending on which bars you buy. The storage fees can be less than 1.00% per annum.
Investing in Gold for your super
When buying gold, make sure the invoice is made out in the name of the SMSF, and make sure that you are allowed to buy with your SMSF to meet whatever goal you have.
When buying from a reputable gold buyer and elect to take a physical position of the bullion make sure that it can be stored securely. With mints like the Perth Mint, you might be required to open an account and allow your identification or personal information to be verified.
Where you decide to hold your silver is important for the auditor. It can be hard to prove that silver exists and that it is protected from damage as much as it is protected from debt. Having your gold stored by a reputable investment provider or bullion dealers like the Royal mint of Australia or the Australian Mint or any of their distributors located throughout Australia is better than having to store the gold at home. Most of these dealers take care of the logistics of buying, storage, insurance, and selling. Having your gold stored in vaults at places like Perth mint make it easier for Auditors to verify that you have the gold. According to regulations governing SMSFs, you should hold your gold in a secure space like a private vault or a safety deposit box, otherwise, it could be a problem for the auditor to get proof for the required 30
Bonds issued by the government have historically proven to be the safest way to park money for rainy days. However, with the trillion dollars in COVID bailouts. This means governments have had to take out loans to incur debts from credit-worthy countries whose governments trade on negative yields. A lot of developed countries are facing debt that has gone up to unprecedented levels. In December 2020, Australia was the first to sell government bonds that had no yield.
Gold itself is more of a positive yielding asset than government bonds with negative yields which tend to penalize owners. As governments increase their negative-yielding government debt increase, so does the attractiveness of gold.
The other alternative entry points into the gold market like EFTs and gold mining shares, however, this will mean added risk of how these funds are managed and how mining companies are run. You can gain more when you buy gold bullion SMSF. Today, gold is a key part of a diversified portfolio.