Kitco pool accounts

[Anonymous]

Does anyone have any experience with these, or with Kitco directly? I am thinking of buying in the silver pool.

Any and all comments welcome and wanted.

thanks

Jim

 

[Lou]

Yes, it is fairly smooth to deal with them. Your best bet is to call them and talk to them though and get a guarantee that when you want to sell your silver, you can sell it, and vice versa.

Lou

 

[Oz]

For what its worth I would not deal with anything but physical delivery in these times of supposedly solid firms defaulting on obligations just weeks or less after they said they were fine. This even applies to ETFs (exchange traded funds), I know they are supposed to have the physical metals on hand in vaults, and they might. That does not stop them from being seized and liquidated at a loss due to counter party risk/obligation. Such as lending out bullion on a spread for a fee (lease rates are posted daily for this on the market), the same volume of gold can be lent out to multiple parties via paper and leveraged multiple times to different parties. If only a small percentage fail to meet their obligations it can be covered as if they possessed all those multiples of bullion. This all works fine when times are good but what happens when several parties have claim to the same collateral, and there are higher than normal failure rates?

There is a good reason that paper market spot prices are lower that physical delivery prices.

 

[Oz]

Just pulled from Kitco’s site on the sell to page;
“IMPORTANT: Due to the volatility of the market, we are experiencing a significant increase in the volume of products that are being sold to Kitco. Although Kitco and HSBC Bank are working hard to stay on top of this, you may experience a delay in your package being processed. We apologize for any inconvenience this may cause, and appreciate your patience and understanding.”
Equals slow pay.

From the buy page;
"Please note: Due to current conditions, your order fulfillment and/or shipment is being affected by delays experienced by our suppliers. Certain popular products are currently out of stock; please click here to view a list of items we normally carry. All such products will once again appear on our web page when their inventories reach adequate levels. Due to high order volumes, you may also experience shipment delays from our vaults in Canada and/or the USA. We want to assure you that we are working hard to mitigate this temporary situation. Kitco Inc. appreciates your patience and understanding, and looks forward to serving you in the best possible manner."
Equals slow delivery after you have paid.

This makes me wonder if you wish to withdraw from a pool account what you will run into. You buy in at spot, right now they have silver spot at $9.43, however they are paying $10.78 for an Eagle if you want to sell to them. In recent history they never paid over spot for bullion. Do you think they would buy bullion for over 10% over spot to settle with you at spot? Speaking of which if you want to settle with them in silver metal to be delivered to you it must be done in 1,000 oz increments and they have a “small premium” variable manufacturing charge that today is $430.00 on a 1,000 oz comex bar, not counting shipping. At a $10 spot price that is over a 4% charge, you can buy a 1,000 oz Comex bar for less than 2% over spot.

I’m not picking on just Kitco, but they don’t have all the metal to back their pools, they are trading on the spreads with paper just like the rest of the paper markets are.

 

[berryr0802]

I just sold my kitco holdings, figured my money would be better put to use buying scrap than just sitting in an account. With the economy the way it is, I would rather hold physical assets than paper. So, after I sold, I got this message:
"PLEASE NOTE: Kitco is currently upgrading its internal accounting processes. As a result, we will not be issuing US checks for the time being. Check requests under $1000.00 USD will be issued through our Canadian USD account, and may be subject to a clearance period with your financial institution. During this transitional period, to alleviate any inconveniences, Kitco will be issuing bank wires free of charge for payments over $1000.00. Please provide your bank wire information in the notes section so that we may process your wire within the next business day of your order being processed"
With the price of silver down, I'm under the $1,000 "free" bank wire, smaller investor which I would think is a high percentage for any business now. So we have to wait until the bank in Canada sends us a check, then wait for the bank to clear another countrys banks check. It amazes me that when you purchase from them, they want the check in the mail within 24 hours or they will charge you a fee. How much you bet my check will not be in the mail within 24 hours? Think I can charge them their late fees and see if they pay? Doubt it, unless kitco as an outstanding customer service and wants every customer to be happy.

 

[Oz]

As you can see above I am a fan of holding physical metal not paper. I may be inconvenient taking an out of country check if under a thousand dollars but at least they seem to have cash to settle even with the larger wires. My point is that the main reason one holds precious metals is as a security against governments devaluing paper currencies, heaven forbid if it is on an order of hyper-inflation. Being paid in cash that is rapidly loosing value is little consolation. My concern is that in that situation they can not deliver all the metal they “should” have, it is unallocated in the best of circumstance. Even the comex contracts have an escape clause to settle in cash.

Please let us know how timely they are.

 

[berryr0802]

Got my check from Kitco yesterday, Dec 11th. Check was actually dated Dec 4th, the day I sold my account, but was marked by the post office as leaving their facility Dec 8th, so 4 days sitting on someones desk. So according to their own Post-Mark Period Late Charge, they owe me $7.00.

 

[berryr0802]

I sent this to Kitcos Customer Service Dept. Lets see what they will respond with, I doubt anything.
"Sir/Ma'am
I sold my silver pool account on 4 Dec. The check was created on 4 Dec, but wasnt post marked until 8 Dec. I received your check on 11 Dec. I was wondering if you honor your own policies? According to your "Late Payment Fee" you were 4 days late on the post mark. I am only counting the 5th, 8th, 9th, and 10th, not counting th weekend. This would equal a "Late Payment Charge Total" of $7.00. Please submit payment by form of check to my address on file. Thank you."

 

[Anonymous]

maybe I misunderstud question.

 

[Oz]

I think I understand what you did (your at the edge, but legal to the best of my knowledge) but this is not something that should really be posted on a public forum if I am correct. If your curious PM me and I will discuss it with you.

 

[Anonymous]

I found www.monex.com even better than kitco fro buying the gold.
I have purchased few times from monex and very happy with the service and pricing.

 

[Anonymous]

In the event kitco or monex goes out of business you are screwed! The 90 day law takes effect. All who have paid in within 90 days of the company closing will be out of luck. Best to take physical delivery on EVERYTHING!

 

[Oz]

I am unfamiliar with the “90 day law”, do you have a link or further explanation?