Investing in Gold Trades

Pubished March 2010

Gold Trades - What's involved

How does this investment work

The Contract

The investor signs a contract with the trading company, the first contract is a test contract for the Investor, a "one off" trade to see if the investment suits him/her, after seeing the return the investor can opt to continue, there is no contracted time period any the Investor can withdraw from the scheme giving 2 weeks notice. Whist there is no minimum term, if you intend to re-invest your returns them we do ask for a voluntary commitment to 10 trades in order to minimise adminstration costs.

The Transfer of Funds

The investor transfers the agreed investment to the trading companies Gold Trading Account, this money is held there, it is used as proof of funds, when it is necessary to pay the mine for the gold dust this is funded from the proceeds of the sale and not client funds. The investor receives a statement of receipt from the trading company confirming the funds have been received, their account reference, and the date of the next trade. Thereafter a statement showing balance on there account subsequent to each trade.

The Purchase of the Gold

The trading company proceeds to order the Gold at a contracted buying price in $ per kilo, they instruct a private security force and Brinks to collect the Gold from the mine and transport it to the airport, the gold is assayed at the mine by the trading company  and it is assayed again at the airport to ensure no change of cargo in transit, the Gold from the moment it leaves the mine to the refinery is fully verified and insured by Brinks.

The Shipment of the Gold

The gold is loaded onto the Plane and delivered to Dubai or Belgium ( we make this choice based on the refinery's work load). When landing at the destination the gold again is assayed two more times, one at the airport and another once it reached the refinery. This process takes 5 days.

The Sale of the Gold

The gold is then sold by the refinery as GLD standard Bullion directly onto the market and the bet price achieved.

The Potential Risk

The price for the Gold from the refinery is between $23,000 - $25,000 per kilo, the current open market price is around $36,000 per kilo. The risk in this operation is, if  the market price of Gold was to fall by over $13,000 per kilo over night, as that is the amount it would need to fall for the investment to actually lose money. If it is not profitable to trade  then no trades take place.

The Reciept of Payments

The payment from the Refinery for the sale of the gold is completed within 72 hours of refining, at this point the trading company issues the trading statement and confirmation of funds transfer to the investor. The Investor is updated Daily from the moment the Gold leaves the Mine.

Potential for this Investment

Gold is in ascendance anticipated to hit $2,000 per troy ounce in next 12 months. The shortage of physical (allocated) gold is estimated to be in a ratio of 78 times more paper certificates than gold in existence. With the big economies at risk of entering a period of hyperinflation and currency devaluation to combat debt and the US Dollar currently under pressure from China, Russia and the EU Trading regions, the prospects for more rises in the price of  Gold are strong.

There are basically three different main types of Gold, Dust 92%+ Purity, Nuggets 94%+ Purity,  Bullion 99.9% Purity

Dust is the cheapest but most people avoid this as very little dust is produced in reality and you can from many mines have as little as 10% actual gold, due to high copper and other metal content, so imagine you buy 1000 kg of dust and then you refine and at the end you only have 100 kg of gold, not a good start considering the freight and security costs involved, but some  people do take the chance as the price can be as low as $9000 per kilo, however good dust should never be below $20,000 per kilo. Next are Nuggets these are far more reliable, the trading company buys these between $23,000 - $25,000 per kilo, and last is Bullion these are the bars you normally see and are referred to as fine gold as they are really the purest form of gold depending on what part of the world they are refined available in 1 kg, 5 kg or 12.5 kg bars.

GLD or NON GLD - GLD stands for Good London Delivery, it is a term used to specify when refining or buying or selling Gold Bars, if Gold is GLD normally this is in the GLD banking system, this is the registered gold that is used to trade between banks and private individuals, you can however have a GLD standard Bar that is not in the system, it can be entered but normally costs 1% of the cost of the Gold to enter and any gold entering the banking system is very carefully regulated so as not to destabilise the gold market, so in effect no one can enter for example 15,000MT of gold into the system in one go, it is done slowly and controlled and every government and banking institution would know about it.

Gold Trades Frequently asked questions

Gold Commodity Trades Recent Actual Performance

More Information - Due Dilligence Pack

Please use the form below to request a due dilligence pack containing

• The Contract you enter in to
• The Certificate of Incorporation of the trading company
• The contract between the mining company and trading company
• Copies of transaction statements
• Copy of The Precious Metal Trading Handbook
• Testmonials

Contact with existing investors can be arranged if required.

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