(Reuters) – The world’s wealthiest people have responded to economic worries by buying gold by the bar — and sometimes by the ton — and by moving assets out of the financial system, bankers catering to the very rich said on Monday.

Fears of a double-dip downturn have boosted the appetite for physical bullion as well as for mining company shares and exchange-traded funds, UBS executive Josef Stadler told the Reuters Global Private Banking Summit.

“They don’t only buy ETFs or futures; they buy physical gold,” said Stadler, who runs the Swiss bank’s services for clients with assets of at least $50 million to invest.

UBS is recommending top-tier clients hold 7-10 percent of their assets in precious metals like gold, which is on course for its tenth consecutive yearly gain and traded at around $1,314.50 an ounce on Monday, near the record level reached last week.

“We had a clear example of a couple buying over a ton of gold … and carrying it to another place,” Stadler said. At today’s prices, that shipment would be worth about $42 million.

Julius Baer’s chief investment officer for Asia is also recommending that wealthy investors park some of their assets in gold as a defensive stance following a string of lackluster U.S. data and amid concerns about currency weakness.

“I see gold as an insurance,” Van Anantha-Nageswaran said. “I recommend 10 percent as minimum in portfolios and anything more than that to be used for trading purposes, to respond to short-term over-bought or over-sold signals.”

ULTIMATE BUBBLE?

Billionaire financier George Soros, echoing comments from investment guru Warren Buffett, last month described gold as the “ultimate bubble” because it is costly to dig up and has no real value except its market price.

But a rising price for the precious metal has in itself generated more and more demand from investors looking for a way to hedge against a fresh recession. Gold bears no yield and is uncompetitive in an environment of rising interest rates.

The uneasy outlook for inflation, hard currencies and global growth has triggered a five-fold increase in a physical gold fund launched by Pictet one year ago, the Swiss private bank said.

UBS’s Stadler said the precious metal has become a staple of investors’ portfolios, despite questions about whether it makes for a smart long-term investment.

“If you talk to ultra-high net worth individuals, that level of uncertainty has never been higher in the last two, three, four years,” he said. “If they ask me, ‘Is inflation going up or are we entering a deflationary cycle?,’ I don’t know. But obviously nobody knows.”

Anthony DeChellis, managing director of Credit Suisse’s Americas private banking unit, said at the Reuters summit in New York that clients are more interested in capitalizing on the rise in gold prices than using the precious metal as a safe-harbor investment.

“They’re asking, ‘If it’s a bubble, how far can I ride that bubble,’” he said. “I cannot say we’ve seen a spike in gold interest, but there’s an interest in the phenomenon of it.”

Samir Raslan, Citigroup Inc’s regional head for central, eastern and northern Europe, Africa and Turkey, said clients were not going overboard on gold.

“I wouldn’t say that clients are over-investing. It’s part of an asset allocation, but it’s not something that they are deciding all of a sudden,” he said.

And not all bankers are recommending exposure to gold.

Andreas Wolfer, head of private banking at UniCredit Group, attributed the run-up in the price of gold to frayed investor nerves after the 2008 financial crisis as well as concerns about sovereign debt in the euro zone.

“We have seen it but we have not overweighted it in our asset allocation,” Wolfer told the Reuters summit in Geneva, which has emerged as a major trading hub for precious metals as well as other physical commodities.

“We strongly believe in an asset allocation having a clear and diversified portfolio, which sounds a bit boring but in the end it brings the best returns,” Wolfer said.

(Additional reporting by Kevin Lim in Singapore and Joe Rauch in New York; Editing by Greg Mahlich and John Wallace)

Original Article at: http://www.reuters.com/article/idUSTRE6932NR20101004

Many clients these days are asking us about secure locations in Panama or other tax haven locations where they can safely store gold bullion, as well as silver and other precious metals. The answer is that opening your own safety deposit box in Panama to store gold bullion securely offshore is not easy, but not impossible either. More below.

The spread on buying gold in Panama is quite high, especially for smaller investors who are only interested in buying only a few gold coins. Panama does not traditionally have a gold market, and the thin demand means that gold bullion coins and bars would have to be shipped in here specially. Needless to say, the shipping and insurance costs on gold make the costs quite prohibitive unless the volume is large.

What people have been asking us recently, however, is about bringing in their own gold from elsewhere in Latin America, or even from Canada and the United States. Panama’s reputation as a secure offshore banking center makes it in attractive location to open a safe deposit box. But in this regard it cannot yet compete with places like Austria and Switzerland.

All major banks in Panama (HSBC, Banco General and Citibank to name just a few of the major banks) offer safe deposit facilities, but only for their account holders. And opening a bank account in Panama is quite a paperwork-intensive process. We can, of course, help if you choose our services for Panama incorporation – write us for details. But we cannot (yet) help out those clients who already have their gold and their corporations, and are searching for a non-bank safe deposit box facility in Panama.

The demand for this service of course comes from the instability in the financial markets – for example there is an article here on why the rich are looking to buy gold bullion offshore. These days, smart offshore investors no longer trust banks or currencies such as the dollar with their hard-earned savings, so they are looking at a gold bullion as a realistic alternative. The problem with Gold is that it raises other types of security risk – such as the danger of physical theft. Hence the need for offshore safe deposit boxes.

For anyone interested in pursuing this topic further, there’s an article here called Offshore Places to Stash Your Cash and another one on the topic of Offshore Safety Deposit Boxes that covers some new ground on the matter of safe deposit boxes both here in Panama and also offshore in places like Switzerland and Austria (for example Das Safe in Vienna, Austria)

Anyone who prefers to look at the option mentioned above (namely – to open a new corporation and safe deposit box at a major Panamanian bank, then to fly in their own gold or silver bullion) is welcome to contact us for further advice. As we write, we are also negotiating a deal with an offshore company based here in Panama with other offices over in the BVI that holds mining assets directly in South America. They are able to offer gold ingots which are available for physical delivery here in Panama. Again, feel free to contact us using our contact for or by telephone if you would like us to keep you informed about these new international business opportunities in the precious metals and gold bullion arenas.

For further interesting articles check out offshore precious metals and we also recommend Gold and Silver Investing.