Perth Mint Certficates: What Are They?
The Perth Mint, named for the city of Perth which is the capital and largest city of the Australian state of Western Australia.
The mint opened in 1899 as a branch of the Royal Mint of London as Australia was a colony of Britain at the time. Currently it is wholly owned by the Government of Western Australia.
The Perth Mint created a program wherein one can purchase and store metals with them on an allocated, pool allocated or unallocated basis. In exchange, the investor receives a certificate exchangeable at any time for the amount of metal listed on the document.
Hence the name, Perth Mint Certificate.
The Government Connection
The good news for buyers of gold is that the Perth Mint Certificate program is the only one of its kind that is actually backed by a government guarantee. The Western Australian Government owns the mint and operates under the Gold Corporation Act of 1987 which dictates that the State Auditor General of Western Australia audit the mint each year.
The bad news for buyers of gold who may be bigger fans of Ayn Rand than any government is that, well, you are doing business with a government.
And if you think your government lies, you may not trust an audit of the government by the government.
Different Ways Of Owning Gold With Perth Mint Certificates
When you choose to buy and store gold through Perth Mint Certificates, you can choose between one of three ways of owning the gold:
- Allocated Gold: This is the “safest” method since coins or bars are fully allocated to you. This is also the most expensive way to buy since you must pay fabrication costs.
- Pool Allocated Gold: This means that physical gold is allocated but perhaps in bars of larger value than your holding. You and many others could own the same bar of gold.
- Unallocated Gold: While the cheapest way to buy gold, there is not any specific gold that you have ownership of.
Unallocated and Pool Allocated gold can be converted to Allocated by paying fabrication costs.
How To Buy and Fees Associated With Perth Mint Certificates
The only way to buy Perth Mint Certificates is through an approved dealer.
The fees associated include, of course, the cost of the gold. You can pay at London AM or PM price fix or the spot price the Mint is paying currently. To that, add a $50 certificate fee and the dealers commission.
Storage fees also apply based on which metal (gold, silver or platinum) and the type of allocation or unallocated.
Minimum Amount Of Gold, Silver, or Platinum To Buy
The minimum purchase for a Perth Mint Certificate is US$10,000. Subsequent buys or sells must be US$5,000.
Taking Delivery Of The Precious Metals
You can take delivery of the metal in your account. The mint reserves the right to delay 10 business days for unallocated precious metals bullion accounts, 2 days for allocated.
Bottom Line Regarding Perth Mint Certificates
Buying precious metals through Perth Mint Certificates is a viable option for many individuals who understand and accept the negatives mentioned above.
You can own gold, silver and platinum, stored overseas, outside your home country (for non-Australians) and be relatively confident that it is secure.
The minimums are low, but as for any overseas gold or precious metals account, the less money you have in the program the higher the costs are as a percentage of what you have stored.
No one can necessarily steal your gold stored at the Perth Mint, a lost or stolen certificate can be replaced with some paperwork and the payment of a certificate re-issuance fee.
Naturally, this is not an anonymous method of gold or silver ownership and U.S. citizens will have to declare on appropriate Treasury forms – subject to applicable minimums.
None of us here at BuyAndStoreGold own any Perth Mint Certificates preferring opportunities like BullionVault and GoldMoney for our offshore gold storage.
