Does Texas Have a Gold Depository?
Many investors view precious metal investments as a reliable and secure means of safeguarding their wealth, such as Fort Knox or U.S. Mint locations such as Denver or New York City or private storage facilities.
Gov. Greg Abbott passed a law in 2015 mandating that State Comptroller Hegar create a Texas bullion depository. Since then, Lone Star Tangible Assets has been chosen as the contractor that will manage this pioneering effort.
Why a Depository?
Texas depository stands out from the competition because, unlike its private counterparts, it is owned and administered by the state itself, giving access to auditing of all deposited bullion assets by the Comptroller of Texas.
Lone Star Tangible Assets will operate the Texas Precious Metals Depository (TPMD). A Leander depository should open by 2021.
Gov. Abbott predicted when the law authorizing a gold depository passed in 2015 that a state-run facility would allow UTIMCO to “repatriate” schools’ endowment gold holdings from storage at HSBC Bank in New York City; but, INN reports, this has yet to happen.
UTIMCO bullion must be within 150 miles of Chicago Mercantile Exchange’s COMEX trading market for transfer. New York City lies approximately 300 miles away; further, while their depository’s security is tight, its hours of operation make withdrawing bullion difficult and time is wasted waiting in line.
Many people invest in precious metals because it is considered an effective and sensible way of protecting their wealth. Unfortunately, keeping such assets at home may be dangerous – therefore many investors look for an offsite storage option like a precious metal depository to safeguard their investments.
Depositories take security very seriously and have comprehensive auditing processes in place. Most offer allocated accounts similar to bank safe deposit boxes, ensuring that when it comes time to withdraw your precious metal you receive exactly the same physical quantity you deposited.
The Texas Bullion Depository (TxBD), created by the 84th Texas Legislature, allows residents of Texas to store their gold bullion securely with IRS-approved facilities. TxBD partners with International Depository Services – known for their stringent safety protocols and UL-rated storage vaults. In addition to Texas, IDS also offers full service storage across both North America.
Prior to 2013, precious metal purchases in Texas were subject to sales tax, creating an obstacle for small investors who needed either enough funds to invest or had to wait until they had enough to cover sales tax expenses. Now however, precious metals purchased and stored within Texas are exempt from sales taxes.
State Rep. Giovanni Capriglione led efforts in 2015 for a depository to bring back home some of the $690 million worth of gold bullion owned by UTIMCO (University of Texas and Texas A&M Investment Management Company), currently stored at an HSBC bank in New York City where UTIMCO pays high storage fees.
Hegar has yet to disclose how many proposals were received; however, she revealed that the winner must bear all upfront costs before being reimbursed when storage fees start being generated by their facility. Furthermore, COMEX membership must also be an essential requirement – its standards setting role being centralised from Chicago-based exchange.
A precious metals depository is an external storage facility that offers maximum protection and insurance to bullion investors and physical market participants, including private citizens, market makers, IRAs and their respective clients. A depository provides far better insurance than keeping gold at home or in bank safety deposit boxes without adequate coverage.
Precious metals depositories are typically managed and owned by private companies. They offer individual accounts with segregated storage space – never pooled together with other investors’ holdings (known as “re-hypothecation”). Furthermore, many private depositories carry excellent insurance through major carriers like Lloyd’s of London. At Midas Gold Group we can provide depository options both domestically and abroad so you can build a truly diverse portfolio while we ensure its safety through all our depository partners.