Just gold ETF no physical

[D]

Many of you are saying it's critical to hold physical gold. Unfortunately I often change countries where I work and I don't feel comfortable carrying with me gold or leaving it in one of these countries. As such, I'm just using GTU and ZGLD bought through a US-based broker (I'm not a US citizen or resident; I'm planning to keep GTU/ZGLD 50/50 and re-balance when GTU sells at premium and vice versa). Do you think this is a relatively safe setup or you think that I should try no matter what to somehow get and store physical gold?

[AgAuMoney]

I often change countries where I work and I don't feel comfortable carrying with me gold or leaving it in one of these countries. ... planning to keep GTU/ZGLD 50/50 and re-balance when GTU sells at premium and vice versa).

I recommend you pick up a few ounces of real gold in the form of 1 ounce coins, either 90% or 22kt, preferably the 1 oz American Gold Eagles or South African Krugerrands.  Next best choice would be British Sovereigns or another low-premium alloyed gold coin.  3rd best choice would be Canadian gold Maples or similar 24kt coins.

Probably 1 to 4 coins are easy to quietly carry with you when traveling (that is well under the U.S. threshold of $10,000 "cash" that needs to be declared, I don't know about other countries) or to hide in an apartment or hotel room.  They aren't large.  One or two in a laptop bag or ipod or phone case, another one or two with your pocket change (I usually dump my phone and change into a side pocket on my carry-on and send it thru the x-ray machine).  The gold coin may show up brighter on the x-ray than other lesser coins, but should not be an issue, especially when traveling in a country with reasonable coin denominations (not the U.S.).  If you wear a wide belt you could probably even put a 1oz coins inside the belt.  One guy I know has several Sovereigns and 1/2 oz Eagles in a split leather dress belt.  I don't think he declares them.

That way you can try traveling with them and see if it works for you, and consider if you could travel with more.

[smurff]

At one point there was a company selling 24K gold jewelry for investors who did not want the government hassle of coins, but liked the idea of wearing bullion on their necks and wrists.  I don't know whether that company is still in business.  The problem with their idea was that the jewelry had a very high premium relative to the gold price, much more than in a bullion coin.  I don't know how many people invested this way.

I wouldn't leave any gold coins in a hotel room, but I like the idea of a money belt.  The money shoe (with a smaller coin taped under the insole) would probably work, too.   Just don't get in any serious auto accidents or forget and leave your clothes on the beach.

[AdamA]

Many of you are saying it's critical to hold physical gold.

More important than how much physical gold vs. ETF gold you chose to hold is that you understand the risks involved with each method.  This mostly means that you need to understand that by owning a gold ETF, you're taking on counterparty risk.  How much of that risk you're willing to take is up to you. 

I try to hold 10-20% of my gold as physical gold, although sometimes I feel like it should be higher. 

I think a foreign bank account is a great idea, especially since you're foreign, and won't have the issues with a Swiss bank account that US citizen would (due to recent legislation). 

[MediumTex]

D,

Is your personal style compatible with a Mr. T-style AU neck spread?

That would be one solution to the problem (though it might create others in its wake).

[Storm]

Traveling through customs in European countries with a few gold coins should be just fine, as long as the value isn't over some arbitrary limit like 10K Euro or 10K USD, but I would avoid traveling to any 3rd world countries carrying gold coins.  Customs officials are often corrupt and may confiscate anything valuable at their own discretion.

[Wonk]

Many of you are saying it's critical to hold physical gold. Unfortunately I often change countries where I work and I don't feel comfortable carrying with me gold or leaving it in one of these countries. As such, I'm just using GTU and ZGLD bought through a US-based broker (I'm not a US citizen or resident; I'm planning to keep GTU/ZGLD 50/50 and re-balance when GTU sells at premium and vice versa). Do you think this is a relatively safe setup or you think that I should try no matter what to somehow get and store physical gold?

D, you're not a U.S. citizen, so you shouldn't have much hassle with the Swiss.  If you find your way there, it might be useful to get a deposit box in Zurich for a portion of it.  I've seen (and considered) private vaults in Austria and decided against it primarily due to security risks being higher in Austria vs. Switzerland.

I have a portion in unallocated ounces through Perth Mint in Australia--which may be an option for you.  Another option is Canada.  Australia and Canada at least tilt towards property rights (as opposed to most countries in South America, Europe & Asia), but more importantly are resource rich countries without the magnitude of structural problems of the U.S. and Europe.  If a currency event were to take place, I have more faith in obligations being met in Australia or Canada than I do many other countries in the world.

If you are nomadic due to work or personal preference, consider these options for physical storage and use ETFs for easy rebalancing.

[AgAuMoney]

At one point there was a company selling 24K gold jewelry for investors who did not want the government hassle of coins, but liked the idea of wearing bullion on their necks and wrists.  I don't know whether that company is still in business.  The problem with their idea was that the jewelry had a very high premium relative to the gold price, much more than in a bullion coin.

I found 22k jewelry more common than 24k.  Only stuff I have is from Mustafa's in Singapore.  Premium when I bought anything was about 20%, but the last time was a few years ago.

22k is considerably more durable than 24k.

Big cities in India usually have plain gold jewelry dealers.  My Indian friends prefer to shop Dubai, better selection and smaller markup, but not worth a special trip unless you are buying a lot and then you might run afoul with customs.  But if passing thru Dubai, definitely check it out.  I'm not sure how the downturn has affected the gold dealers in Dubai.  I know it hasn't been good for real estate.

But coins are still going to be cheaper to make.  Most big banks in China will sell gold coins, usually at a small markup.  A recent article on sovereignman.com gave several examples.

[AgAuMoney]

this would imply travelling there each time I need to rebalance which is quite expensive. It's so much more convenient having just ETF, but maybe it's worth the extra hassle. If it is, what would be the best way for someone to transfer money either to Switzerland or Austria...

Keep 1/3 to 1/2 in the ETF for ease of rebalancing?

Keep 1/3 to 1/2 in easy reach in case of emergency.

Keep the the rest in your foreign box.

I'm not sure how to buy gold in Switzerland or Austria.  I've heard some banks sell coins, but I never asked.  I did see a vending machine but the premium made jewelry look cheap!  Transferring money is easy.  When you get there just use an ATM (multiple times over multiple days) for cash, write a check in a bank, cash advance on a credit card, etc.