Hedge funds, central banks and retail investors have eagerly bought gold in the last 10 years, while retail investors in particular also turned to less expensive silver for its hedge benefits. If you're wondering where all this newly acquired metal is being held, storage companies have responded by expanding facilities and opening new storage facilities and depositories – including Dillon Gage Metals.
“We've seen growing demand for coins and small bars,” says Terry Hanlon, president of Dillon Gage Metals in Dallas. “Silver has been popular because of its lower price point, and many large and small investors have chosen silver coins and small bars to meet their objectives.” Some smaller investors are just beginning to realize the advantages of a portfolio diversified with precious metals, he adds.
Private depositories play a big role in storing silver, which is more of a challenge than gold because of its bulk, Hanlon notes. Investors purchasing silver often need to find a secure vault specializing in the metal. Silver holdings typically include 1,000-ounce and 100-ounce bars, along with bags containing 90 percent silver coins and boxes of American Silver Eagles. A 1,000-ounce silver bar weighs about 69 pounds and is 13 inches by 4¾ inches by 3½ inches in size. Its value is around $34,000 in today’s market.
Diamond State Depository, a Delaware precious metals warehouse wholly owned by Dillon Gage Metals but independently operated, maintains secure space for institutional and retail investors designed to store silver in bulk. Diamond State is staffed by metals and banking professionals with 90 years of combined experience. Staff duties are segregated so that employees who enter account data are separate from those handling assets.
Meanwhile, to keep up with the storage demand, Dillon Gage Metals plans to open International Depository Services of Canada in December in Toronto.
“At Diamond State, precious metals are insured with a policy underwritten by Lloyds of London and title is unencumbered and secure.” explains Mike Clark, president at Diamond State Depository. The same conditions will apply to the Toronto depository.
“Canada, and specifically Toronto, hasn't had enough secure storage, and that dictated where we chose to locate,” Hanlon says. “Our Toronto depository will also serve as a global distribution center for precious metals.” As more players buy precious metals, demand for storage and distribution is expected to increase over this decade. “Our new Toronto facility was a strategic addition to our business segments and is backed by our company's experience and tradition of professionalism,” he states.
Dillon Gage Metals is one of the largest precious metals dealers in the United States and provides customers with electronic platforms for real-time precious metals trading, while also operating a refinery in Dallas. They serve as an authorized purchaser for all the major world mint and make two-way markets in all popular bullion products.
After a drop in September, precious metals prices are clawing their way back now. As a sign of strong demand, other companies in addition to Dillon Gage Metals, including banks, have been opening storage in New York, London and Singapore to meet investors' needs.
About Dillon Gage Metals
Dillon Gage Inc. (DillonGage.com) was founded in 1976, and its companies include:
• Dillon Gage Metals, one of the largest precious metals dealers in the U.S. (DillonGage.com/Metals) 800.375.4653
• Dillon Gage Refinery, state of the art refinery located in Dallas, Texas. (dillongage.com/metals/refining) 888.436.3489
• FizTrade Online Trading offers real-time trading for bid and ask markets for gold, silver platinum and palladium. (FizTrade.com) 800.375.4653
• Diamond State Depository, a wholly owned, independently operated precious metals storage facility located in New Castle, Delaware. (DiamondStateDepository.com) 888.322.6150
• International Depository Services of Canada, a wholly owned, independently operated precious metals storage facility located in Toronto, Canada. (InternationalDepository.com)
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