Date post: | 30-Jul-2015 |
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Business |
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Trading Physical Precious Metal: Brokerage perspective
Ali HararwalaBusiness Transformation Consultant
Slide 2
Agenda
Objective & Introduction Trivia Stats: Top 10 Countries Players Products Services Proposition How does it work Precious Metal: Performance
Chart Refining Process Questions
Slide 3
Objective & Introduction
To present and discuss the eco-system in which precious metals are transacted online as a preserve of wealth.
Gold Tree Infographic
Session Objective
Introduction to Precious metals: A major asset class
Why invest in precious metals? Avoid counterparty risk Hold wealth outside of the banking system Own the underlying asset not a security or
promise Take delivery if you require
Why one shouldn’t? Lack of yield/return Price volatility
Slide 4
Trivia
What is the standard measure of metal in the market? …..What is the total amount of gold mined in history of mankind? ...What is the total identified reserves of gold? …What countries have the highest gold reserves? …What countries are the highest consumer of gold? …What countries are the highest producer of gold? …When was the gold standard abolished (US/UK)? …
“A total of 174,100 tonnes of gold have been mined in human
history, as of 2012. This is roughly equivalent to 5.6 billion troy ounces or, in terms of volume, about 9261 m3, or a cube 21.0 m on a side. The world consumption of new gold produced is
about 50% in jewellery, 40% in investments, and 10% in industry.”
Slide 5
Stats: Top 10 Countries
Highest Gold Reserves**World Gold Council - Jan
2014**Foreign reserves
Gold Production (2012)
Gold Consumption (2012)
Slide 6
Players
Online Brokers
Bullion Bank
Inspection and Audit Agencies
Corporate & Financial
Institutions
Logistics Partner
Miners & Refiners
Vaults
International Trade Assoc.
Individual Customers
Slide 7
Products
• Allocated metal does not show up on the balance sheet of the brokerage or the vault operator. It is an off balance sheet item, which is the property of its customers.
Allocated/Un-Allocated
Metal
• Good Delivery Bars (LBMA, LPPM etc.)• Non-Good Delivery Bars
Large Bars
• Typically anything that weights less than GDB (100g, 1kg etc.)
Small Bars
• Typically melted and fabricated from Large/Small Bars
Coins
Slide 8
Services
Buy/Sell
Storage
Metal-to-Metal Exchange
Private Vaults
Bar Registration
Collection & Delivery
Inspection
Multi-CCY and Multi-Bank a/c
Savings & Pension Plans
Slide 10
How does it work
Register Deposit
Buy, Sell,
Exchange
Storage,
Delivery
Audit Monitor
Online registration
that includes KYC and
AML procedures
Deposit funds in multiple
CCYs
Select a market, service, product, rate and quantity
when trading
Review periodic
audit and inspection
reports
Various tools to monitor
investment
Slide 13
Refining ProcessD
ust
Sem
i-re
fine
Dor
éM
elting
Ass
ayin
gG
ranu
lati
onCas
ting
Smal
l/La
rge
Bar
s
MiningRefiners, Smelters etc.
Banks, Brokers, Jewellers, Consumers etc.