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FEATURE: New gold standard is online - Orange County Register

The following is quoted from The Orange County Register's feature "New gold standard is online".  

Sergio Siderman has the Midas touch.

One day in December, he sat down at his computer and, with a few clicks of the mouse, he had his own cache of gold.

He couldn't see it or touch it because the gold bullion was stored in a Brinks vault in New York. But an e-mail confirmation said he had established a gold account and the dollars he had just sent from his Los Angeles bank had been converted into bars and partial bars of gold in his name.

Welcome to the new world of online gold buying.

In the past, people who wanted to own gold had to buy coins and gold bars, usually at a markup, then find someplace to store it, often at additional cost. More recently, investors have gone the stock route, buying gold mining shares, mutual funds or the gold exchange-traded fund GLD, which is like a gold mutual fund that trades all day.

But as the price of gold has soared above $500 and questions mount about the value of the dollar, interest has grown in owning the metal.

Responding to that demand, several companies have gotten into the Internet gold-trading business but with a 21st century twist: They keep the gold stored for you in vaults in places such as New York, London or Switzerland, and the buying, selling and bookkeeping is all done over the Internet.

Gold? Dot-coms? Vaults somewhere far away? Sounds like a scam just waiting to happen. And some of these Web sites could well be the latest get-rich scheme.

A closer look

But some money managers are beginning to give the idea of online gold trading a closer look and - after a lot of investigation, including on-site vault visits - they are recommending at least a few companies to their clients.

Chip Hanlon, president of Delta Global Advisors in Huntington Beach, is a convert to a company called BullionVault, which is based in London and also has vaults in New York and Zurich.

He first looked into the company about a year ago, asked lots of questions and visited the company's Brinks vault in New York. He liked what he learned ... He was even more impressed by the maximum sales charge of only 0.8 percent and a storage fee of 0.12 percent a year based on the value of the gold purchased, a bargain for owning gold, Hanlon said.

There is no minimum purchase. The gold can be bought in an amount as small as a gram for about $20. And transactions can be done 24/7...

Siderman, the chief operating officer of Property I.D. in Los Angeles who invested in BullionVault in December, thinks investors should have a healthy dose of skepticism about gold Web sites.

"The only reason I went with them is because my broker visited the vault and saw the gold," he says.

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