If you own gold for "disaster insurance," read this

Brett Eversole
0 Comments|April 8, 2013

Valcambi, a Swiss gold refiner, just came out with a new way to own gold

Why do you own gold? 
 

Maybe you're looking for a timeless store of wealth.
  

Maybe you own precious metals as a "chaos hedge." When times get tough and investors get nervous, the prices of gold and silver tend to go higher.
  

Or maybe you're looking for "disaster insurance." If things really get bad – if the monetary system completely collapses – you might be able to use gold and silver to make everyday purchases.
 

There's just one problem... 
 

At $1,600 an ounce, gold is worth a lot. It would be hard to spend a one-ounce gold coin on groceries or gas. Gold coins aren't "divisible." So they're not much good in everyday situations.
 

I had lunch with Michael Checkan earlier this month. Michael is president and CEO of Asset Strategies International (ASI). He's been in the gold business for decades. And he and his team at ASI have been one of our recommended coin dealers for years.
  

"Many of our clients own silver coins to add divisibility," he told me. "But there hasn't been a way to own divisible gold... until now."  
 

The folks at Valcambi, a Swiss gold refiner, just came out with a new way to own gold. It's called the CombiBar. Michael gave me the full details. I thought it was worth passing along...
 

"I've dealt in the gold market for over 40 years," he told me. "This is the first time I've been able to solve the divisibility problem with gold."  
 

These gold bars come in 50-gram sizes. That's about 1.6 ounces, or around $2,600 at today's price. 
 

The bars come perforated in a 5 by 10 grid. Each square is exactly one gram of gold. And the squares can easily be broken off, by hand, into one-gram pieces... 
 

At today's price, one gram of gold is worth around $50. So if the situation ever came up where you'd need to spend your gold, one-gram pieces could easily make small purchases. 
 

These bars offer the divisibility that no gold coins can. 
 

The benefit of divisibility does come at a price. The CombiBars will cost you the price of the gold, plus a 13% premium, along with shipping, handling, and insurance. (You can get a discount for large orders.)
  

A 13% premium might seem pretty steep. But remember, even generic gold coins trade for a 6%-8% premium right now. So the "divisibility premium" is actually only a few percent. 
 

Personally, I don't expect the world to fall apart. I don't expect I'll ever buy groceries with my gold. But lots of folks own physical gold to protect themselves from that situation. And if it does happen, it'll be useful to be able to divide your gold into small increments... 
 

This isn't the right opportunity for everyone. If you own gold to speculate on its price, this isn't for you. But if you own gold as a "disaster insurance," it's worth considering. 

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