The most competitive gold prices in the world, the ones you see published in the papers and on the internet, are enjoyed by the participants in the professional bullion market:- gold dealers, refiners, government agencies, bullion banks and the occasional big investment organization.

This professional market only deals in what are known as Good Delivery bars. If you're not trading these bars you are excluded, both from their market and from their very competitive prices, which means you'll pay more when you buy and receive less when you sell.

Good Delivery bars are cast by a small group of precious metal refiners accredited by the professional bullion dealing communities in London, New York and Zurich. They are accurately assayed and guaranteed always 99.5% pure gold or better. The market trades their pure gold content (gross bar weight x purity) which is known as fine gold, so no-one who trades professional market bullion ever pays for impurities.

Good Delivery bars have high integrity because they have never been in private possession. From the day they're first manufactured they are kept in bullion vaults recognized and monitored by the local gold dealing community. Every time bars are moved - by accredited bullion couriers - a careful record is maintained, showing continuous storage through trusted hands. This guarantees gold bar integrity in a way that keeping gold at home, or even in safety deposit boxes, simply cannot match.

The result is that a professional buyer's vault will accept deliveries of these bars direct from the seller's vault without re-checking their purity. The seller gets paid quickly and efficiently, and bullion trading costs are much reduced for both buyer and seller. This is what Good Delivery bars are all about, and it's why the high volume, high integrity, professional bullion market is the only place where a sale of gold nets the seller the widely published bullion price.

Good Delivery bars are large - usually 400 troy ounces each (12.4kg), and at £1,000 an ounce that's $400,000 a bar.

Yet even having enough money to buy a whole bar or two only solves half the problem. You still need that key relationship with a formally recognized bullion vault to look after the gold while you own it. Otherwise your gold loses its guaranteed acceptance as 'Good Delivery', and cannot easily be sold at full price. But those vaults are ultra-cautious and typically don't deal with the general public. Even if you did spend the considerable time, cost and effort of setting up a vaulting account with one of them you'd find the minimum monthly storage fee means you'd need about 15 big bars of gold to get an economic rate for bar storage.

These are the barriers which keep private users out of the professional bullion market.

BullionVault.com changes all this. It enables people from all over the world to own professional market gold and keep it in any quantity in officially recognized bullion vaults in London (UK), New York (USA), or Zurich (Switzerland).

All BullionVault gold is held in Good Delivery form. So when you come to sell, your buyer is able to trust the purity and weight of your gold, which is guaranteed by BullionVault itself, because we know that you never had the opportunity to corrupt it.

Most people who buy gold don't stop to consider how important bullion integrity is going to be when they come to sell, but it will be critical to the price they get. Too much money is lost by gold investors who find out that lower integrity bullion has a higher premium and simply does not fetch the spot price when it is handed back over the counter. The round-trip dealing costs (i.e. buying and selling) for bullion coins and small bars is usually about 7% to 10%, and it stretched to 20% in late 2008.

Your trading costs on BullionVault are much lower. When you buy or sell you pay a commission whose maximum rate is 0.8%, falling progressively when you invest above $30,000 to just 0.02%. The round-trip costs you 1.6% on small amounts, falling to an incredible 0.04% for larger customers.

BullionVault customers also save money by cutting out the middleman and dealing directly with each other. They do this on the internet using BullionVault's public order board, which is like a stock-exchange for privately owned Good Delivery gold. The open price competition operating between thousands of our users is what has driven down the cost of trading gold, and taken the average spread across all BullionVault users to exactly zero.

BullionVault itself is the one of the biggest of the thousands of buyers and sellers operating on this ‘stock-exchange’. We sell gold from stock and buy gold back into stock. But the important thing here is that we have to beat the quoted prices of all our clients to attract your business. This vital component – open competition on price – is what forces BullionVault’s gold prices to be exceptionally competitive, to the point where we can all but guarantee that as a retail customer you will not buy gold cheaper, nor sell it dearer, anywhere else on Earth.

There are savings at settlement time too. You don't have to arrange for expensively insured courier deliveries. All the gold you buy is already in the vault where you want it. Then, when you sell, your buyer wants his gold in the same vault, and he frequently pays a small fraction over the spot price for your gold because it saves him the shipping cost.

It's worth understanding that BullionVault is open-ended. The amount of gold in BullionVault floats up and down according to customer demand. When customers are buying from our stock we simply replace the falling stock with new Good Delivery bars bought from the professional market. Then, because the gold remains Good Delivery, when our customers are selling to us we sell surplus bars back to the professionals. What we are doing is acting as a buffer between the amounts that private buyers want to deal, and the inconveniently large sums that the professional market deals.