Monday, November 30, 2015

BullionStar's New Bullion Savings Programme

I just found out about BullionStar's new "Bullion Savings Programme"! They haven't even announced it yet and I think they are still debugging the website about it, but it's so exciting that I just have to share this new information! I was just browsing on their website when I stumbled upon it!

BullionStar has been having a unique product called the VaultGram where they sell you fractional ownership of a physical bullion that they have in storage. The only kicker is that this product is purely for buy/sell only, which means you can never get delivery of the physical good... until now!

Now, for example, if you manage to buy up to 100g of Gold, you can convert it to a 100g PAMP cast bar anytime and take delivery of it. The same goes for Silver, you can "cash out" for a 15kg Heraeus bar once you hit 15,000g!

If you think about it, this is bloody amazing. You can buy 100g of VaultGrams for $4,904.30, and that can be fully converted to a 100g PAMP cast bar which can be bought for $4,902.48 for a single piece! Essentially, it's the same thing.

However, to prevent people from having direct allocated ownership of a bar (which has admin costs related to converting and record-keeping), it is more favourable to liquidate VaultGrams compared to the 100g bar itself. In fact, selling 100g of VaultGrams will yield you with $4,802.80 compared to $4,753.45 of the 100g cast bar. This is a difference of just under $50, or about 1%.

The same goes for 15kg of Silver. The buy price is almost identical, but the sell price for the VaultGrams is $9,840 compared to $9,567.21 of the 15kg bar. This is a difference of $272.79, or about 2.8%.

I still absolutely LOVE this product of BullionStar though. When I first signed up as an affiliate and started purchasing with them a long time ago, one of the things which I did bring up to the people at BullionStar is the option for their VaultGram product to be converted to a physical product. Some bigger and more global PM companies do this, like BitGold, which can be converted at just 10g with a fee. I am really happy that they have decided to roll this out! I think that they are perhaps trying to follow the BitGold model and push for more VaultGram ownership so they can roll out other products, such a precious metals payments and maybe even a "debit card". Very interesting possible developments if the VaultGram does take off!

If you think about it, it does make sense since for them to allow conversion to a physical product. For example, if you already have 20,000g of VaultGram silver, they would technically be backing it up it at least one 15kg Heraeus bar.

When BullionStar finally officially announces this programme, I need to look at it better and see the full details. It looks like like they are going to rename VaultGrams with BSP Grams instead. Now I am wondering when would they will fully update the website and if the converted 100g /15kg bar can be immediately picked up.

With the convertibility feature, low capital outlay, easy 24/7 online purchasing, easy interbank giro settlement, low low premium over spot, it is going to be quite hard for me to see any other form of investing in Gold or Silver as an attractive alternative, except for if you are looking to hold onto smaller denominations.

As of right now, I have enough VaultGrams with BullionStar to cash out a 100g cast gold bar and a 15kg silver bar. I don't think I will demand physical though, but it really is nice to know that I can now convert my grams into a bar and go and pick it up. It seems like I have been seriously stacking my precious metals, haha!

Full disclosure: If you enter BullionStar through my site, and you buy anything, I get a small commission.

Whether you buy at BullionStar directly or enter from my site, the price you pay does not change. The only difference is whether I get a cut for referring customers or not.

My personal precious metals investments are stored with BullionStar and I pay the same fees as any other regular customer.

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