It really is a simple process, which begins with a telephone call. When you speak to us in person, we will answer your questions, and learn about you investment needs and strategies. We will design an account structure specifically for you, and explain the procedures and safety precautions involved with procuring allocated (physical) gold. When you make your purchase decision, you transfer funds to a bank of your choosing. GoldInvestDirect will then use these funds to purchase gold bullion on your behalf.
You will be investing in one or more London Good Delivery Bars, which weigh approximately 400 toz (troy ounces), or 12.4kg, and are at least 99.5% pure. Each bar is stamped with a unique Serial number, the Refiner’s Assay stamp, the Fineness, and the year of manufacture, and has an unbroken Chain of Integrity guaranteed by the LBMA and its member banks and assayers. The cost of each bar is determined by its gross weight, its purity, and the price of gold on the London Market. At $600 per ounce, each bar would be worth on the order of $240,000.
Most gold brokers will take your order, find a seller at your price, and arrange for the gold bars to be physically moved from the seller’s vault to yours. Physically moving gold is an extra (and unnecessary) expense, and it may be two days before you have a list of your allocated bar serial numbers.
At GoldInvestDirect, when we take your order, we sell to you from our own stock, and can immediately give you a list of your allocated gold bars. The gold remains in the same vault (unless you request otherwise), but you are now the owner of record.
First you must first establish an account at a bank upon which we mutually agree. We will help you set up an account appropriate to your location and needs, with the proper restrictions to ensure the security of your funds. Then, when you decide the time is right to purchase gold, we will use one of several methods to transfer your funds.
The founders of GoldInvestDirect have invested in a stock of allocated gold here in London, all certified by the LBMA with an unbroken Chain of Integrity. Our customers purchase from this stock, and gain immediate ownership of their gold. We replenish our own stock, so that we always have gold available for our customers. We buy at the best prices, and arrange for physical delivery to our LBMA member vault as necessary. We keep an updated list of the bars in our vault, owned by our customers and ourselves.
There is rarely a reason to move the gold from the LBMA vaults, as this would violate the Chain of Integrity and devalue the gold. However, we can arrange for you to take physical custody of the gold, either by transport to another bank, or by taking personal possession. In either case, the expense and security risks involved with transportation and maintaining possession are significant, and are your responsibility. When such gold is sold, whether back to the London Market, or anywhere else, it must again be transported, re-assayed, and recertified at the seller’s expense.
The beauty of investing in London allocated gold through GoldInvestDirect is that you acquire ownership in a stable, valuable asset, which is controlled by a secure infrastructure that safeguards those assets at minimal expense. The gold does not need to move; only the ownership transfers. Your investment resides in a country with one of the oldest and most stable governments in the world, and which has not been invaded by a foreign power in more than three hundred years. Property rights of foreign investors are recognized and protected, offering the perfect hedge against financial, social and political upheavals around the world.
The price of a bar of gold includes several components:
This is a common practice whereby borrowed money is used to invest, in gold in this case. We are not a bank, and we do not loan money or extend credit. You would need to make such a loan with your own bank, or we can help arrange a loan from a London bank. We can negotiate a competitive rate based on the London Inter Bank Offered Rate (LIBOR) plus 0.9%.
Buying short is a risky practice, and not one we recommend lightly. Small fluctuations in the gold market can translate into large gains or losses. For example, if you wanted to buy $2 million in gold, and deposited $200,000 as security with the bank, the bank would transmit the entire $2 million to us, and we would purchase the gold on your behalf. You would only have a 10% equity in the purchase, so that if the price of gold fell by, say, 8%, we would be required by your bank to sell the gold, and return $1,840,000 to your bank. After your loan is paid to your bank with interest, you would have something less than $40,000 left of your original $200,000 investment.
Conversely, if the price of gold rises, you could profit handsomely from buying short. We at GoldInvestDirect do not engage in this practice; we have no outstanding debts or credit accounts, and we only buy gold with our own funds or those of our customers. However, we will work with you to help your investment strategies succeed, as long as they fall within the bounds of international law.
Since we trade in whole London Good Delivery Bars, the minimum purchase is one gold bar, which is a sizable investment for most people. At $600 per fine ounce, a typical bar is worth nearly a quarter of a million US dollars. If you want to own gold, but this investment level doesn’t meet your needs, you may be interested in other forms of investment, such as gold coins. Visit www.coininvestdirect.com for more information.
We purchase only the number of gold bars allowed by your funds on deposit; the balance of your funds remain in your sub account until you either remove them, or augment them for another purchase.
We do not set a maximum limit on gold purchases; however, we believe that orders for greater than $10 million are best divided into separate transactions, to avoid undue influence on the gold market.
The London Bullion Markets Association determines and publishes the specifications for the gold bars we trade in:
The physical settlement of a loco London gold trade is a bar conforming to the following specifications:
Weight:The value of these gold bars is based on the fine weight of pure gold content. This is determined by the measured gross weight, and the assayed fineness of each bar. Each bar may contain up to 0.5% impurities, which do not figure in the value of the bar. We record the assayed content of each bar we handle, so you will always know the exact amount of your gold holdings.
minimum gold content: 350 fine ounces (approximately 10.9 kilograms)
maximum gold content: 430 fine ounces (approximately 13.4 kilograms)
The gross weight of a bar should be expressed in troy ounces, in multiples of
0.025, rounded down to the nearest 0.025 of an troy ounce.
Dimensions:
the recommended dimensions for a Good Delivery gold bar are
approximately as follows:
Top Surface: 255 x 81 mm
Bottom Surface: 236 x 57 mm
Thickness: 37 mm
Fineness:
the minimum acceptable fineness is 995.0 parts per thousand fine gold.
Marks:
Serial number
Assay stamp of refiner
Fineness (to four significant figures)
Year of manufacture (expressed in four digits)
You can see that the assayed fineness of each bullion bar is a critical measurement, which must be performed by a trusted entity. The LBMA maintains a list of approved assayers and their marks. Once assayed, as long as the bar remains in possession of an LBMA-approved bank or vault, the Chain of Integrity remains intact. This means that the physical location of a specific bar of bullion is not critical, and in fact, it is often more cost effective to take ownership in place, without incurring transportation fees. This is a common practice among the LBMA members, who may have their holdings spread among several other member banks and vaults with reciprocal agreements.
Similarly, GoldInvestDirect maintains our stocks of bullion, and those of our clients, at various LBMA member banks and vaults. When you buy bullion from GoldInvestDirect, we do not physically relocate the gold unless necessary, as this adds extra expense. It has already been delivered to a vault of our choosing, and this cost is included in the price. When we visit our stocks on occasion, it is always in the company of a bank official and a guard. A particular bar may have been bought and sold many times over, and may never have left the vault. With this method of immobilization, security can be maximized while expense is minimized.
That having been said, there may well be compelling reasons to choose a particular storage vault, especially for long-term or high-volume investors. We work with all the major LBMA banks and vaults, and we can help you understand the benefits and limitations of each, as well as negotiate the best price on the storage solution of your choice. You may even arrange your own private (non-LBMA) storage, but you must be willing to accept the loss of value associated with having to re-assay and recertify any gold bars whose Chain of Integrity has been broken. In most cases, we believe you will receive the best return on your investment if you leave the vaulting to us.
There are many factors that influence the price of gold each day, as well as over the long term.
The price of gold may vary slightly between the main markets in London, Zurich, and New York. Temporary imbalances in demand in one location may influence the price elsewhere as investors look for opportunities for arbitrage trading. Each location has differing fixed costs associated with assay, delivery and storage of bullion, which will affect prices slightly. The demand price may also be affected to some degree by geopolitical events, but only insofar as they affect the risk and expense of owning gold in a particular location; this would impact the fixed cost of ownership, while the value of the gold itself will be relatively unaffected.
When we quote you a price for a gold bar, it includes the value of the fine gold content of the bar at current prices, as well as fabrication, assay, and delivery charges the seller has paid. The bar is already stored with our gold stocks in a secure LBMA vault, so there is no need to move it. In fact, the gold’s value is enhanced when you resell it to us, because we too will not need to physically relocate the bars, and can therefore offer you the best price.
When you want to buy gold, you quote a bid price, and if a seller agrees to your price, the deal is made. Similarly, if you wish to sell gold, you quote an ask price. Because all sellers want to bid low and sell high in order to make a profit, there is always a difference between the bid and ask prices, known as the spread. The size of the spread varies over time, and among the various markets, in response to market conditions. A savvy investor can use the spread to profit by buying and selling large volumes of gold, but risks losing those profits to small fluctuations in the market price. The long-term investor is less concerned with the spread and daily market price variations.
Without direct inside knowledge of the market, it is difficult to know when to make a move. GoldInvestDirect buys and sells on your behalf, and because we are experts, you need not be one as well.
For your protection as well as our own, all our customers are known to us, and we will verify your identity. We don’t accept anonymous customers, nor do we accept funds from questionable sources; we never accept cash. We only accept monetary transfers from legitimate banks whom we trust to have validated the source of the funds. We do not support racketeering or money laundering in any form, and will reject any attempt at conveying illicit funds or gold.
You will transmit your funds to your own account at a major private bank with which we both feel comfortable. We work with many internationally renowned banks that specialize in Private Wealth Management, but the particular banks we work with may change, as we constantly re-evaluate the cost of doing business with them.
All accounts are established under Terms of Business that restrict the use to which money in that account can be put. We will open a sub-account under your account into which you will place your funds. This sub-account is limited to transactions involving the purchase of allocated gold. When you eventually decide to sell your gold, the money can only go back to your same sub-account. From this sub-account money can only go back to the account of origin. The banks ensure the security of your accounts, which are entirely separate from any of GoldInvestDirect’s accounts.
GoldInvestDirect’s staff examines and authorizes every transaction, and we will confirm with you by telephone call after first verifying your voice. Transfers and transactions take place during European banking hours, but fortunately, these overlap with Asian and US banking hours. Any transfers between your sub account and your bank of origin will of course take place during these mutual business hours.
Each gold purchase is for whole gold bars, up to the number allowed by the funds in your sub account. GoldInvestDirect will not “make up the difference” to purchase another bar, as we are not a bank; we do not make loans or extend credit. You cannot spend more money than you have in your sub account; neither can you sell more gold than you possess. We do not buy gold on margin, and we do not accept guarantees of payment.