Agents or Brokers
If you are representing someone that is trying to sell gold or platinum you should know the following:
- The Seller has contacted his Bank or Refinery to set up the sale and has been advised how much product they are holding in his name, how quickly they can move the product and what they will charge for their services.This will be in writing.
- When the product was deposited, there will be a receipts from the Bank or Refinery as to quality, quantity and ownership.
- If the product is in a vault there will be vault charge receipts available.
- Any time the Seller wants to sell, the Bank or Refinery to confirm the transaction to any potential Buyer without naming the Seller or disclosing any of his account information.
- A Mandate or Agent works for either the Buyer or the Seller. Any fees paid to them will be a separate agreement and not disclosed in the sale/purchase agreement. If they are listed as receiving fees on the transaction, they are probably self appointed (not by the Buyer or Seller).
- Fees to be protected are usually established by the Seller and will be covered in the original offer of sale (if the offer comes to you at a 7% gross, 6% net it means all brokers and intermediaries divide 1%).
- Don’t think brokers and/or intermediaries can start cutting up the discount or control the transaction, IT WILL NOT WORK.
- The offer (from the Seller or Mandate) should reflect the total transaction including quality, quantity, delivery to Buyer’s Bank, discount, and fees to be protected. It should also state their ability to prove the transaction.
- An offer for some ridiculous amount of product (5,000 or 10,000 metric tons or more) should be thrown away. DON’T SEND IT TO US!
If you are trying to sell the product to us, you should realize the following:
- He block funds for a transaction only after he has a reliable Bank or Refinery confirmation that they are in control of the product and can guarantee quality, quantity, delivery to the buyers Bank in Switzerland, discount and any fees protected.
- He will NEVER take delivery in Indonesia, Singapore, Hong Kong, Thailand, Philippines, Ghana or in any third world countries. DON’T ASK, IT WON’T HAPPEN! Plan on delivery to his Bullion Bank in Switzerland. The Seller’s Bank or Refinery can arrange shipping, insurance, handling, export and import duties and re-refining if necessary.
- He won’t pay for anything other than the Good London Delivery product (not shipping, handling, insurance, duties, refining, storage fees, etc.).
- Don’t confuse discount with profit. Gold is an asset, cash you can spend. If the price of gold goes up, his asset is worth more, if it goes down, his asset is worth less.
- He will commit to buy up to and including 100 metric tons (that is the price of gold on the second London fix times 32,140 ounces is the price of one metric ton) with roll and extensions. If the Selling Bank or Refinery guarantees more than 100 metric tons he will commit to that confirmed amount.
- His Bullion Bank guarantees payment for product (on his behalf) and guarantees him that he gets what he paid for.
A real Seller of gold understands, through his Bank or Refinery, that a real Buyer will not commit funds for any transaction until that transaction has been proven.