Tag Archives: gold bars

Customer Order Number 100,000 at BullionStar

As part of its continued growth and success, BullionStar has recently fulfilled its order number: 100,000. To mark this significant milestone, BullionStar issued a 2.5 gram PAMP Gold Bar to the lucky BullionStar customer in question. The customer order was placed by Mr. Ito from Japan, who was on holiday recently in Singapore with his wife when he visited BullionStar's shop and showroom in central Singapore.

Mr. Ito said he was delighted with the PAMP gold bar prize and commented that he was very lucky on what was his first visit to BullionStar. He also returned the following day to make further purchases. Mr. Ito also liked the easy to locate BullionStar showroom, the competitive bullion prices, and the fact that the many bullion display cases make comparisons easy when selecting products.

BullionStar COO, Mr Luke Chua, presents a PAMP gold bar to Mr. Ito of Japan who placed order number 100,000 with BullionStar.

Established in 2012

This latest milestone is one of a continuing series of notable milestones for BullionStar since its establishment in Singapore 6 years ago. During this time BullionStar has gone from strength to strength and is now firmly established as the best bullion dealer in Singapore and the Asian region, as evidenced by BullionStar recently winning Bullion Directory's bullion dealer of the year award, as well as one of the most recognised bullion dealers internationally with customers from over 100 countries around the world.

Upon establishment in 2012, BullionStar's offices were initially located in the Marina Bay Financial Centre in the downtown Central Business District (CBD) of Singapore. Prior to 2012, BullionStar's founders were already familiar with the bullion dealer sector having set up several bullion dealers such as the Swedish company Liberty Silver AB. 

BullionStar's launch in Singapore in 2012 came as the Singaporean Government introduced a Goods and Services Tax (GST) exemption on transactions in investment precious metals (IPM). The GST exemption on IPM means that any time customers purchase qualifying bullion bars and bullion coins from BullionStar, the prices paid are free of GST, since there is no sales tax to pay. Other compelling reasons for establishing a bullion and storage operation in Singapore included the fact that Singapore is one of the safest countries in the world and has a stable jurisdiction, a strong rule of law, no reporting requirements on any bullion transactions, and a government which supports the growth and development of the bullion industry.

BullionStar's philosophy as a leading bullion dealer is grounded in innovation, internationalization, and constant evolution, both in-store and on-line. In January 2013, BullionStar launched its fully-transactional online trading platform, allowing customers around the world to buy and sell precious metals bars and coins at the click of a button on the BullionStar.com website.

In July 2014, BullionStar opened its current shop, showroom and integrated vault in central Singapore at 45 New Bridge Road, adjacent to both Clarke Quay MRT, and Singapore's Central Business District (CBD), as well as less than minutes walk from Singapore's Chinatown. This spacious showroom, with over 20 display cases, allows customers to browse and purchase a huge variety of gold bars, silver bars, gold coins and silver coins from the world's leading precious metals mints and refineries.

With BullionStar's secure precious metals vault integrated into the shop and showroom, customer purchase orders for precious metals can be immediately dispatched in the shop, and customers can also view and audit their precious metals holdings held in storage in the vault.

The Widest Range of Precious Metals Products

BullionStar now stocks one of the widest ranges of precious metals bullion products in the world, sourced from all of the world's leading precious metals mints and refineries, with over 600 different products across 10 product categories. These products include gold bullion coins and silver bullion coins from leading national mints such as the Royal Canadian Mint, US Mint, Perth Mint, Royal Mint and Austrian Mint, coins such as Gold and Silver Maple Leafs, Gold and Silver Eagles, and Gold and Silver Kangaroos. BullionStar's wide range of gold bars and silver bars is sourced from prestigious precious metals refineries such as Heraeus of Germany, PAMP and Argor-Heraeus of Switzerland, and from national mints such as the Perth Mint and the Royal Canadian Mint.

Gold Kilobars
PAMP Gold Kilobars available from BullionStar

In 2015, BullionStar also launched it's now very popular BullionStar branded gold bar and silver bar range. These products, the BullionStar 100 gram Gold Bar, produced by Argor-Heraeus of Switzerland, and the BullionStar 1kg Silver Bar, produced by Heraeus of Germany, can be traded without any spread between the buy price and the sell price.

As well as the comprehensive range of gold, silver and platinum bullion bars and coins, BullionStar also stocks a wide selection of gold and silver collectible and numismatic coins, a range of gold bullion jewelry, and a wide array of coin related products for storing and correctly handling and displaying your precious metals coins and bars.

Secure Storage in one of the Safest Countries in the World

BullionStar provides full service operations in all aspects of bullion sales, storage and other services. Opening a BullionStar account can be undertaken in a matter of minutes, and purchasing bullion either in the shop and showroom or online on the BullionStar website is a simple and intuitive process. Customers purchasing precious metals bars or coins can opt to pick up their purchases in person, have their products delivered to their address, or have their precious metals stored in BullionStar's secure vault facility which is integrated into the shop and showroom premises.

BullionStar's secure precious metals storage solution goes far beyond just storage of precious metals as it provides full online control allowing customers to buy, sell, physically withdraw or physically audit their bullion at any time. With Bullionstar's Vault Storage, customers can generate vault certificates online, view pictures of stored bullion, generate a live audit report of metal that they hold in storage, and view certificates evidencing vault insurance.

Metal grams held in vault storage through the BullionStar Savings Programs (BSP) can also be converted into either gold bars, silver bars or platinum bars, and can then either be held in storage or withdrawn and delivered.

Consistently Profitable and Strong Revenue Growth

Although the precious metals markets are at time opaque and closed to transparent information flow, BullionStar pursues a policy of transparency and openness as regards its operations, financial results and investor relations. BullionStar publishes highlights of its annual performance on its website with full commentary and infographic analysis. Customers therefore have visibility around BullionStar's revenues and product mix and can be confident about the company's financial standing and stability.

It's notable that BullionStar has grown revenues strongly in every financial year of operations. BullionStar's financial year (FY) runs to 30 June each year. In FY 2014, BullionStar recorded revenues of SGD 44.1 million. For FY 2015, revenues grew 43.8% to SGD 63.4 million. Revenues then almost doubled year-on-year  in FY 2016, rising to SGD 129.2. For the latest financial year, FY 2017, BullionStar recorded revenues of SGD 174.7 million, which was 35.2% higher than FY 2016.

This very strong and solid revenue growth means that BullionStar revenues have more than quadruped between FY 2014 and FY 2017, growing by a staggering 422% over that time. This revenue growth is a testament to strong and loyal customer order growth and underpins the growth and stability of BullionStar's operations over the period since its inception.

Order Number: 100,000 

Recognition, Media Interest, and Research and Analysis

In another sign of BullionStar's continued growth and recognition, this year BullionStar won the inaugural award of "Bullion Dealer of the Year" Rest of World category in The Bullion Directory's annual bullion awards. These awards are recognised and valued throughout the global bullion industry, and BullionStar secured its victory after nomination and public voting against many bullion dealers from across the globe.

Since its establishment, BullionStar's precious metals articles, blogs, research and infographics analysing the gold and silver markets have become well-known and highly-regarded around the world, with blogs and analysis from precious metals analysts such as Ronan Manly and Koos Jansen, and guest posts from renowned bloggers such as JP Koning. BullionStar aims to continue to lead the way in original precious metals documentation, views and commentary, and has developed sections of the BullionStar website including the educational Gold University and the topical in-house 'BullionStar Blogs' series of articles. BullionStar was also at the forefront in publishing original analysis about important gold markets such as the Chinese Gold Market, and stylish visual infographics on such topics as the London Gold Market.

BullionStar's articles and analysis are regular picked up and distributed on many other websites across the world, both by websites within the gold space and by more general financial and investment websites. BullionStar articles are also regularly translated into other languages and have been featured on sites as diverse as French, German, Spanish, Russian and Chinese language websites.

BullionStar is regularly quoted in the major financial media for views and commentary about the precious metals markets, and has been cited and quoted by such publications and websites as Reuters, Bloomberg, the Wall Street Journal, the Guardian, RT.com, Sputnik News,  Straits Times of Singapore, and CityWire Asia. BullionStar staff and analysts have also featured on Channel News Asia and Channel 8 News in Singapore, as well as Real Vision TV, and German TV network DAF. BullionStar also continues to produce its own series of video interviews which feature prominent members of the global precious metals markets such as legendary US investor Jim Rogers or prominent Canadian gold market entrepreneur Eric Sprott.

As well as a strong international customer base, BullionStar places particular emphasis on being international in outlook, and at times presents at events internationally such as FreedomFest in Las Vegas and attends precious metals events and exhibitions, such as the International Money Fair in Berlin. As one of the largest retail bullion dealers in Singapore, BullionStar now also contributes to assisting precious metals consultancies such as Thomson Reuters GFMS in gauging retail investment gold and silver demand in the Singaporean bullion market.

Payment Mechanisms Include Cryptocurrencies BTC, ETH, LTC and BCH

Payment mechanisms are also another area in which BullionStar aims to provide greater customer choice and continued innovation. As well as facilitating payments for precious metals purchases funded by bank transfer, NETS and Cheque, BullionStar also accepts 6 leading national cash currencies, namely the Singapore Dollar, US Dollar, Euro, Japanese Yen, Australian Dollar and Swedish Yen, and also four of the leading cryptocurrencies.

BullionStar began accepting Bitcoin as a payment method for precious metals in May 2014 and was one of the first bullion dealers worldwide to do so. In another first, Ethereum, Bitcoin Cash and Litecoin have just been added to the list of leading cryptocurrencies which can be used to purchase precious metals at BullionStar, and with this move, BullionStar is one of the first bullion dealers worldwide to accept payment in each of BTC, ETH, BCH and LTC. Customers selling bullion to BullionStar can also opt to receive proceeds of sales in either Ethereum, Bitcoin Cash, Litecoin or Bitcoin.

In September 2015, with the introduction of a Stored Value Facility, BullionStar began offering customers the ability to keep funds on account in their BullionStar accounts in a similar way to a bank account. The facility also means that funding precious metals purchases can be undertaken instantly without needing to transfer funds in, and proceeds from precious metals sales can be kept on account until next needed.

As well as being able to purchase a wide variety of investment precious metals, BullionStar customers can also sell precious metals coins and bars, such as gold, to BullionStar. This can either be precious metal which customers hold in storage in BullionStar's secure vault and wish to sell, or else bars and coins which customers send to BullionStar or drop-in in person in the Singapore shop and showroom. Additionally, through the Gold Buyers brand launched by BullionStar in August 2013, BullionStar offers competitive prices for gold jewelry and precious metals scrap.

Having been awarded a Bullion Dealer of the Year award in 2018 via public voting in the Bullion Directory annual awards, and with strong revenue growth in every financial year since inception, BullionStar's milestone of order number 100,000 is again testament to its loyal and growing customer base both in Singapore and the Asian region, as well as across the precious metals community worldwide.

BullionStar adds Ethereum, Bitcoin Cash, and Litecoin as Payment Options and Currencies

BullionStar is pleased to announce that it has added Ethereum, Bitcoin Cash and Litecoin as transactional currencies for both buy and sell orders on the BullionStar website.

Ethereum, Bitcoin Cash & Litecoin are now accepted as payment options and currenciesMany BullionStar customers are already be familiar with using Bitcoin when buying and selling gold, silver and platinum bars and coins, as BullionStar has been accepting Bitcoin as a form of payment since May 2014. BullionStar was one of the first bullion dealers worldwide to offer customers the ability to buy and sell physical precious metals using Bitcoin. Now with the addition of Ethereum, Bitcoin Cash and Litecoin, BullionStar is again one of the first bullion dealers in the world to offer customers the ability to transact in these other leading cryptocurrencies for both buy and sell orders.

With the addition of these three additional cryptocurrencies, BullionStar customers can now buy and sell physical gold bars, gold coins, silver bars, silver coins, platinum bars and platinum coins using Bitcoin (BTC), Ethereum (ETH), Bitcoin Cash (BTC) and Litecoin (LTC), and by using any of six traditional currencies, namely Singapore Dollars, US Dollars, Euro, Australian Dollars, Japanese Yen, and Swedish Krona.

BullionStar constantly aims to add innovations to its product and service offerings, and the addition of Ethereum, Bitcoin Cash and Litecoin comes after careful analysis and following customer feedback. The addition of Ethereum, Bitcoin Cash and Litecoin now gives BullionStar customers extra choice when buying physical precious metals using cryptocurrencies, and allows for faster cryptocurrency transaction confirmation times.

Settle Bullion Orders in Ethereum, Bitcoin Cash & Litecoin

To pay using a cryptocurrency, select the preferred cryptocurrency in the "Currency" drop-down box at the top right hand section of the BullionStar hompage. Upon selection, all prices in the product listings will be displayed in terms of your selected cryptocurrency.

Select to pay in Bitcoin Cash, Ethereum and Litecoin

To purchase precious metals on the BullionStar website, you simply add the desired items to your shopping cart, go to the checkout and place your order.  If you have selected a cryptocurrency as currency, the checkout payment option will default to the selected cryptocurrency as well.

Upon placing your order, the order confirmation page and order confirmation e-mail will detail the cryptocurrency address to which you must initiate your payment within 20 minutes.

BullionStar will update you with a payment confirmation e-mail and an SMS text message as soon as we have received and processed your payment.

Likewise, for customers selling precious metals to BullionStar, proceeds can now be received in Ethereum, Bitcoin Cash and Litecoin as well as in Bitcoin.

Bitcoin, Bitcoin Cash, Ethereum & Litcoin as Currency

On the BullionStar website, all product prices for gold bars, silver bars, gold coins, silver coins, BullionStar Savings Program (BSP) and other precious metals products can now be displayed in Ethereum, Bitcoin Cash and Litecoin as well as in Bitcoin.

2.5 gram PAMP Gold Bar denominated in Bitcoins

Customers can also view spot prices, portfolio values and account history directly denominated in the newly added cryptocurrencies. For example, if you select 'Litecoin' from the Currency drop-down box on the top right of the BullionStar homepage, the spot prices and charts on the right hand frame for gold, silver, platinum and palladium are then displayed in terms of Litecoin (LTC) values. When logged in to your BullionStar account, your vault balance and cash balance will also be displayed in LTC if the Litecoin currency option has been selected.

BullionStar Charts

Ethereum, Bitcoin Cash and Litecoin have also been added as currencies within BullionStar Charts.

BullionStar Charts is a comprehensive charting facility which provides the ability to create price charts for precious metals, currencies, commodities, stock indexes, individual stocks (equities) and also in terms of the prices of BullionStar products.

BullionStar's charting functionality allow any two prices to be selected. For example, on the charting page select 'Precious Metals - Gold' then select 'Currency - Bitcoin Cash' to view a price chart of the gold price in terms of Bitcoin Cash.

Gold Price in Bitcoin Cash

Why Ethereum, Bitcoin Cash and Litecoin?

BullionStar has added Ethereum, Bitcoin Cash and Litecoin as transactional currencies  alongside Bitcoin because each of these three cryptocurrencies is widely-known and widely-used, and each of these cryptocurrencies is now firmly established in the marketplace.

Since its commercial launch in 2015, the Ethereum blockchain platform and its Ether coin have become a dominant force in the cryptocurrency space, and as well as transaction processing, Ethereum also supports smart contract functionality and the development of other cryptocurrency platforms.

Bitcoin Cash emerged in early August 2017 as a hard fork when it was split off from the Bitcoin blockchain. Bitcoin Cash has a larger blocksize than Bitcoin and facilitates higher transaction rates than Bitcoin which generally translates to faster payments and confirmations. In the 9 months since its launch, Bitcoin Cash has seen large-scale adoption by merchants and is now a stable and expanding competitor to Bitcoin.

The Litecoin platform and its coin, launched in 2011, are also based on the Bitcoin blockchain design, and Litecoin is now well established and known for its high-speed transfers rates and short confirmation times.

In terms of cryptocurrency market capitalization (market cap) or total outstanding market value of each coin, Ethereum, Bitcoin Cash and Litecoin have among the highest values of all crypto coins next to Bitcoin, and the global cryptocurrency trading market values the infrastructure of these cryptocoin networks, and most importantly, given that exchanges are forward-looking pricing mechanisms, the crypto currency market is signalling confidence in the longer term future prospects of these four cryptocurrencies.

Trade Directly between Cryptocurrencies and Precious Metals

With the ability to buy and sell precious metals using Bitcoin, Ethereum, Bitcoin Cash and Litecoin, BullionStar customers can now trade directly between investment precious metals and cryptocurrencies without having to first convert to fiat currencies. Traders can also now take profits from these cryptocurrencies and directly buy precious metals using their Ethereum, Bitcoin Cash, Litecoin and Bitcoin.

Trading between Ethereum and bullion for example, you can now buy gold bullion bars and gold bullion coins through BullionStar using Ethereum and hold these investment grade bars and coins in BullionStar's vault. All you have to do is transfer Ethereum from your Ether wallet or crypto exchange account wallet to the Ethereum address as indicated on the order confirmation from BullionStar. The same applies for Bitcoin Cash, Litecoin and Bitcoin.

Then in the future If you want to sell these gold bars and gold coins and take the proceeds in Ethereum, you just sell the precious metals for Ethereum and have the Ether transferred to your personal Ether wallet or crypto exchange account wallet. There is no need to first convert the Etheruem to US dollars to buy your chosen gold bar and coin products. Thus the intermediate step of converting the main crypto currencies to fiat currencies, such as US dollars is redundant.

The Celebration of Chinese New Year

Chinese New Year is probably the most important date in the Chinese calendar, with the event being celebrated throughout China and in Chinese communities around the world. Gold plays an essential part of the Chinese New Year celebrations.

Also known as Lunar New Year, the date on which Chinese New Year falls each year is variable since it follows the Lunisolar calendar, hence the New Year festival is a movable event. However, Chinese New Year usually falls somewhere between 21 January and 21 February and the date is calculated based on the occurrence of a new moon.

This year, Chinese New Year is on Friday 16 February and marks the beginning of ‘Year of the Dog’ and the completion of the preceding ‘Year of the Rooster’. The Chinese calendar follows a 12-year repeating cycle and is also associated with 12 animals of the Zodiac (Sheng Xiao), with each year in the cycle represented by a different animal. The Year of the Dog is the 11th year in the Zodiac cycle. Next year in 2019, Chinese New Year falls on 5 February, and marks the beginning of the 'Year of the Pig', the final year of the cycle.

The 12 animals of the Chinese Zodiac (Sheng Xiao)

People born in the upcoming Year of the Dog are said to be loyal, honest and friendly with a sense of responsibility as well as being intelligent, independent and decisive. And across China, dogs are also considered auspicious and associated with good fortune.

New Year's Day in China also marks the beginning of the Spring Festival. During Spring Festival, there is a 7 day public holiday across mainland China, beginning on Lunar New Year’s Eve and ending on the 6th day of the new lunar year. This year, the New Year public holiday starts on 15 February and lasts until 21 February. The actual Spring Festival then continues and runs up to the 15th day of the new lunar month which coincides with the traditional Lantern Festival. This year the Lantern Festival is on Friday 2 March.

Customs and Traditions across the Spring Festival

Chinese New Year celebrations are predominantly associated with the colour red. Red is traditionally thought to bring good luck and good future while scaring away evil and bad fortune. This tradition is associated with the story of a mythological beast Nian which in Chinese folklore was scared off by the use of red items and loud noises. Hence New Year’s celebrations incorporate red bunting, red hanging lanterns, dragon dances and loud displays of fire crackers, and its also common in China to see red cloths hanging at the entrances to houses during New Year’s festivities. Wearing red clothes is also popular over the festival and is thought to bring good luck.

In China, the New Year festivities incorporate various customs and traditions symbolising the renewal of a new year, the passing of an old year, and the cultivation of good luck. In the week before New Year, people traditionally clean their houses as a way of cleaning out the old. New Year is also a popular time to purchase new items as it signifies a new beginning and the welcoming of a new year.

The gifting of money-filled red envelopes is also popular during New Year across China. These gifts are thought to bring good luck to the recipient, hence they are known as lucky red envelopes. An amount containing the number 8 is particularly auspicious as the number 8 is thought to be lucky and bring prosperity. But apart from the money, the red colour of the envelope is also associated with good fortune.

Reunion Dinner is one of the most important family occasions in the Chinese calendar

The days leading up to New Year are a time of immense travel within China with millions of people on the move as they return home to their families and relatives to celebrate. A particularly important event during this time is the traditional ‘Reunion Dinner’ which takes place on New Year's Eve, and is a traditional dinner celebrated together with family.

Gift Giving for Chinese New Year

Chinese New Year is also one of the most popular times in China for buying physical gold, gold for gift giving, but also for investment given that it's an auspicious time of the year. At the retail level, Chinese gold demand at this time of year sees a noticeable peak as people across China rush to buy gold bars and buy gold coins, especially for gifting.

This is particularly true of gold coins and gold bars with a Lunar New Year theme, a Zodiac animal theme, or that have an association with China. At BullionStar, we have a wide selection of gold coins and gold bars which would make impressive gifts for Chinese New Year for both family and friends.

PAMP Lunar Series 2018 Year of the Dog Gold Bars

Swiss gold refinery PAMP is one of the best known and most prestigious gold bar brands on the market and is especially popular across Asia. This year PAMP celebrates  the 'Year of the Dog'  with a beautifully designed high relief gold bar portraying a dog motif on both the front and the reverse of the bar's surface. These Lunar gold bars are ideal for gifting and for celebrating the good fortune associated with Chinese New Year.

Available in both 100 gram and 1 ounce weights, PAMP's Lunar minted gold bars contain .9999 pure gold and capture the dog's symbolic qualities of loyalty and friendship. The intricate design on the front face features a portrait of an adult dog sitting in front of a kennel. The reverse of each Lunar gold bar cleverly reveals, through a reverse angle of the same scene, a puppy in the kennel sheltered behind the parent dog.

The bars reverse face is also embossed with PAMP’s refinery logo, the weight and purity of the bar, the bar’s unique serial number, and the Swiss assay mark and guarantee of authenticity Essayeur Fondeur.

PAMP Suisse 2018 Year of the Dog Gold Bar

Each PAMP Lunar gold bar comes in a distinctive and secure assay card

Royal Canadian Mint MapleGram 8

The MapleGram 8 from the Royal Canadian Mint is a particularly stylish set of 8 Maple Leaf gold coins presented within an attractive red and gold display card and designed around a Chinese New Year theme. Each of the 8 gold Maple Leaf coins weighs 1 gram and contains 9999 fine gold. Each of the 8 coins in the set also has its own unique 8 digit serial number. The red and gold design of the MapleGram 8 signifies luck and good fortune, while the presence of 8 coins references the auspiciousness of the number 8 in Chinese culture.

MapleGram 8 from the Royal Canadian Mint

Perth Mint Gold Lunar 2018 - Year of the Dog

Another attractive gift option for Chinese New Year are the very popular Lunar themed bullion coins from Australia’s Perth Mint, which for 2018 celebrate the Year of the Dog. These coins are the 11th in the Perth Mint’s current series of Lunar bullion coins.

The Perth Mint’s 2018 Gold Lunar coin is available in 6 weight denominations, namely 2 oz, 1 oz, 0.5 oz, 0.25 oz, 0.1 oz and 0.005 oz, each of which is minted from 0.9999 fine gold. The 1 oz 2018 Gold Lunar has a maximum mintage of 30,000 pieces. The reverse of the Lunar gold coin features a stylish and detailed image of a Labrador Retriever with the Chinese character for "Dog", and "Year of the Dog" is a circular inscription underneath.

Perth Mint Lunar gold coin 2018 - Year of the Dog

Perth Mint Lunar Silver 2018 - Year of the Dog

Also in celebration of Chinese New Year, the Perth Mint has produced a 2018 'Year of the Dog' Silver Lunar coin available in weight denominations of 0.5 oz, 1 oz, 2 oz, 5 oz, 10 oz, and 1 kg, all of which contains 99.99% silver and have a superior finish. The reverse of the 2018 Silver lunar celebrates the new Zodiac with a handsome portrayal of a German Shepherd dog and pup. The coin also displays the Chinese character for "Dog", with a circular inscription underneath of "Year of the Dog". While gold is more popular for gifting at New Year in China, silver coins, especially the bigger ones such as the 1 kg Silver Lunar for 2018, can also be gifted.

In addition, the Perth Mint has also released a Year of the Dog 1 oz proof version of the 2018 Silver Lunar which comes in its own box with a certificate of authenticity, and a Year of the Dog 1 oz proof high relief 2018 Silver Lunar also with its own box and certificate of authenticity.

China Gold Panda Coins

In terms of gold bullion and China, Chinese Panda gold coins are undoubtedly the most famous Chinese gold product on the international market, and would make interesting gift ideas for Chinese New Year. Minted in China by Shenzhen Guobao Mint, this Mint is part of China Gold Coin Corporation, which in turn is owned by the Chinese State.

30 gram Chinese Gold Panda coin 2018 - Year of the Dog

Each year the design on Chinese Gold Panda coins changes, with the reverse of the new 2018 coin featuring a powerful portrait of a Giant Panda feeding on a bamboo shoot. The front of each Gold Panda coin features imagery of the Hall of Prayer for Abundant Harvests in the Temple of Heaven in Beijing.

Gold Panda coins are produced in 5 weight denominations ranging from the flagship 30 gram Gold Panda coin, through to Gold Panda coins weighing 15 grams, 8 grams, 3 grams and down to a 1 gram gold coin. The 30 gram Gold Panda coin, weighing the equivalent of 0.965 troy ounces, is always a popular seller and would make a New Year’s gift to remember. Given that 8 is the luckiest number in China and is associated with prosperity and good fortune, the 8 gram Gold Panda coin is also of interest during the New Year festival.

Heraeus 1 kg Silver Lunar Stacker Bar

The Year of the Dog is also celebrated in a new 1 kg Silver Lunar Stacker Bar from the world-famous Heraeus precious metal refinery in Germany. Each of these 1 kg (32.15 ozs) Heraeus Silver Lunar bars contains 99.9% pure silver and has the words “2018 Year of the Dog” embossed on the bar's front surface along with the bar's weight and fineness “1 Kilo” and “999 FINE SILVER” which encircles a stylised representation of a dog.

Heraeus 1 kg Silver Stacker Bar 2018 - Year of the Dog

The reverse of each of these silver bars features an anti-forgery swirl pattern design for added security, and displays the bar's unique serial number. The Heraeus Silver Stacker bar is designed for easy storage and comprises rectangular beveled surfaces that interlock for ease of stacking.

1 oz Silver Happy Chinese New Year - Lion Dance

Also of interest for Chinese New Year is a 1 oz proof silver “Happy Chinese New Year - Lion Dance” coin produced by Victoria Mint on behalf of the Republic of Chad. The silver coin’s reverse features a colorized depiction of a traditional Chinese Lion dance which is synonymous with good luck and fortune, and the Chinese characters ‘新年快樂’ meaning ‘Happy New Year’. This proof silver coin has been produced by the Mint in a very limited issue of just 1000 coins. Each coin comes with a certificate of authenticity and is presented in a red velvet casing and outer box.

The Role of Gold as Turmoil hits wider Financial Markets

As market turmoil hits both equities and cryptocurrencies, the heightened volatility in these assets underscores gold’s unique role as a safe haven, store of value and portfolio diversifier.

Stock Market Selloffs

With major US stock indices falling again sharply on Thursday (DJIA - 4.02%, NASDAQ - 4.08%, S&P -3.41%), last Monday’s equity market selloff and spike in volatility looks set to be a more prolonged affair than a one-off plunge and recovery. The Dow’s Thursday close of 23860 is 2756 points, or 10.3% lower, than the all time high of 26616 from 26 January, and the Dow is now officially in correction territory. This week also saw two records added to the history of stock market selloffs, Monday’s biggest ever points drop in the Dow, and Thursday’s second biggest ever Dow points drop.

Similarly the S&P 500 index closed on Thursday at 2581 and is now 292 points, or 10.1% lower than its all-time high of 2,872.87 from 26 January, again in correction territory.

The NASDAQ composite, which also reached its all-time high of 7505 on 26 January, is virtually in a 10% correction zone below 6755, as it closed just a few points over this level at 6777 on Thursday.

Finally, the CBOE Volatility Index (VIX), the widely used measure of stock market volatility - which is also known as the investor fear gauge - had spiked up massively late Monday and into Tuesday to the 35-40 range, and critically was again seen approaching those levels at Wall Street market close Thursday.

Equity market indexes across the globe, as normal taking their cue from Wall Street trading, have also been falling in tandem, with markets in Europe, Asia and the Americas all lower on the week.

Whatever the reasons for the shift change in market sentiment, from macro factors to algorithmic trading, these abrupt index plunges and the rise in volatility have spooked investors across the globe and have led to panic selling and active profit-taking. With a low volatility environment less certain than before, market consensus on ever-increasing stock prices may be beginning to unravel.

Clouds over Cryptocurrencies

In cryptocurrency markets, the price euphoria seen in December and early January led by Bitcoin and some other large alt coin rivals has also given way to deep corrections and unclear price direction.

Until earlier this week when Bitcoin rallied back to above $8000 from below $6000, Bitcoin’s price had been on a consistent downward trajectory for nearly a month. From its intermediate high of US $17,000 on 7 January, in less than 30 days, the price had collapsed to below US $ 6,000, an approximate 65% drop. From the ultimate high of just over $20,000 on 17 December to the recent low of below $6000, Bitcoin’s price collapse exceeded 70%. Similar price movements were seen across the board in other crypto coin prices, both large and small cap.

Coupled with Bitcoin’s equally sharp price gains in late 2017, the short-term price movements of Bitcoin, both up and down, are hugely volatile. As recently as a year ago in early February 2017, Bitcoin in US dollars was still trading in the $1000 range. It was only in May 2017 when the price first breached the $2000 mark and August when it initially hit the $3000 range. As its meteoric rise continued, by late October the price had again doubled to $6000, and it was just mid-November 2017 (less than 3 months ago) when the Bitcoin price first traded in the $8000 range, a similar price range to where it now finds itself back at now.

Mid-November is also arguably the point at which Bitcoin’s dizzying ascent really got going, shooting up to over $11,000 before the end of November. It was at this point that hundreds of smaller alt coin prices started to really explode upwards also, taking the broad cryptocurrency market and the overall sector MarketCap much higher.  Within a week between 1 December and 8 December, the Bitcoin price had again exploded to over $18,000, and the ultimate peak of $20,000 was reached less than 10 days later on 17 December.

After this, a series of lower highs and lower lows saw the Bitcoin price oscillate wildly in the $12,000 - $18,000 range before its prolonged fall from 7 January onwards to below $6000 on Tuesday 6 February, and its subsequent bounce  to $8000. This high price volatility must raise the question of Bitcoin as store of value, and to what extent it is primarily a payment system versus a dependable store of value.

Gold's Attraction in Market Turmoil

Investors in financial and other asset markets prefer predictability and stability. Hence investor apprehension at the growing uncertainty and heightened volatility in global stock markets and the recent pump and dump chart patterns of many cryptocurrencies.

But it is during market turmoil that gold’s safe haven qualities come to the fore. Since gold has no counterparty or default risk it is a universally known and universally used safe haven for preserving wealth during market crises. Gold's high liquidity also adds to its safe haven appeal. During financial market turmoil, gold's price therefore generally reflects this movement out of risk assets and into the safe harbour that gold provides. The below chart plots a relatively comparison between the US dollar price of gold and the S&P 500 index, over the week beginning Monday 5 February, showing gold's outperformance as the US stock market suffered a series of selloffs.

USD Dollar Gold Price in terms of the S&P 500 Index, Week from 5 February 2018. Source: BullionStar Charts

Gold is also one of the traditional and best-known stores of value, some others being land and property. A reliable store of value asset will allow you to park your wealth and retrieve it at a later time knowing that it will still have value and will have retained the value that it had when you converted some of your savings or wealth into that asset. A reliable store of value will also adjust for inflation and retain its purchasing power relative to inflation. Physical gold in the form of gold bars and gold coins does just that and retains its purchasing power over long periods of time precisely because the gold price, as an inflation barometer, adjusts to reflect expected inflation.

Finally, gold can also reduce the volatility of a portfolio of investment assets such as stocks and bonds. By adding an investment in gold, the resultant portfolio displays less volatility of returns, and can also exhibit higher expected returns. This is due to the gold price having a low to negative correlation with the prices of securities such as stocks and bonds.

The 5 Largest Gold Nuggets that Still Exist

Throughout gold rush and gold mining history, the discovery of a large gold nugget is a phenomenon which always causes excitement throughout a mining community as well as capturing the wider public's imagination. It has probably something to do with so much gold being found at the same time, often with relative ease.

Gold nuggets can be found in alluvial deposits (sediments formed by water movement) or in other placer deposits (formed by other movement), but gold nuggets can also be found in or close to primary gold deposits, for example gold lodes or veins which have been exposed by the weather. "Gold nuggets" can also technically be extracted from hard rock gold deposits as long as the surrounding rock can be removed.

There are a number of gold nuggets which claim to be the world's largest. Obviously, not all of these claims can be true. There are also a number of "largest gold nuggets" lists which confusingly mix historical nuggets which no longer exist alongside nuggets which still exist.

We think a list of gold nuggets which still exist is more accurate, since many historical nuggets are now just legends and have long since been melted down into gold bars or gold coins. Therefore, the following list, based on research to the best of our abilities, profiles the largest 'named' gold nuggets which are still in one piece, all of which are famous, all of which are on display, and all of which can be visited by the public.

1. Pepita Canaã,  Brazil

The world’s largest surviving gold nugget is the Pepita Canaã (Canaan Nugget) which was found by miner Júlio de Deus Filho in the Serra Pelada ('Naked Mountain') gold mining region of Brazilian state of Pará in 1983.

The Pepita Canaã gold nugget has a gross weight of 60.82 kgs and contains 52.33 kgs of gold, or 1682 troy ounces of gold. The "Canaan" gold nugget was purchased by the Banco Central do Brazil in 1984, and is now on display in the "Gold Room" of the central bank’s money museum (Museu de Valores do Banco Central in Brazil) in Brazil’s federal capital Brasilia.

Notably, the source nugget from which the Pepita Canaã nugget came was actually larger, but it split into several pieces while being removed from the ground.

"Pepita Canaã" - The largest surviving gold nugget, on display at the Brazilian central bank headquarters, Brasilia

In the early 1980s, Serra Pelada became known as one of the world's most notorious gold mining areas when over 100,000 freelance miners flocked there to engage in open air gold mining excavations in vast, dangerous, and crowded conditions. The Serra Pelada has essentially been closed since the late 1980s and gold mining is no longer possible due to flooding and government prohibitions. However, Brazil is still a significant gold producer, with gold production output in 2016 totalling 80 tonnes, according to the US Geological Survey (USGS).

Serra Pelada gold rush, Para, Brazil, 1980s

2. The Great Triangle, Russia

The world’s second largest surviving gold nugget is the “Great Triangle”. This gold nugget was found in the Miass area of the Russian Urals mountains in 1842 by Nikofor Syutkin. It has a gross weight of 36.2 kgs and a gold assay of 91%, meaning that it has a fine gold content of 32.94 kgs, or 1059 troy ounces of gold. The "Great Triangle" has dimensions of 31 cms * 27.5 cms * 8 cms, and as the name suggests,  it is triangular in shape. When found, it was dug up from a depth of about 3.5 metres.

The Great Triangle gold nugget on display at the Kremlin in Moscow, Russia

The Great Triangle gold nugget is owned by the Russian State, and through the Gokhran Fund (State Fund for Precious Stones and Precious Metals), it is currently on display in the 'Diamond Fund' collection in the Kremlin in Moscow. The Diamond Fund is an extensive  permanent exhibition of the Russian state's crown jewels, precious stones and gold and platinum nuggets.

While the Urals was one of Russia's first gold mining areas, today, there are extensive gold mining operations in many areas of the Russian Federation, particularly in the East of the country. Russia is currently the world's 3rd largest gold producer, with mining production output of 250 tonnes of gold in 2016.

3. Hand of Faith, Australia

The "Hand of Faith" is a 27.66 kgs gold nugget found by in the area of Kingower, Victoria, Australia in 1980 by a local, Kevin Hillier. This gold nugget has the distinction of being the largest gold nugget ever found using a metal detector. It contains 875 troy ounces of gold, and has dimensions of 47 cms * 20 cms * 9 cms.

The "Hand of Faith" nugget was purchased by the Golden Nugget Casino in Las Vegas, Nevada, USA, and is currently on display in the casino lobby on East Fremont Street in the old downtown center of Las Vegas.

Hand of Faith gold nugget on display in the Golden Nugget casino, Las Vegas

The Golden Nugget Casino claims on its website that the "Hand of Faith" nugget is the world's largest surviving gold nugget, but this is clearly not the case given the existence of other larger gold nuggets such as Brazil's Pepita Canaã and Russia's Great Triangle nuggets.

4. Normandy Nugget, Australia

The "Normandy Nugget” is the name given to a 25.5 kgs (820 ozs) gold nugget found is 1995 in the important gold mining centre of Kalgoorie, Western Australia. Assay analysis shows the Normandy Nugget to have a gold purity of between 80%  and 90% .

The Normandy Nugget was purchased from the finder in 2000 by Normandy Mining, which is now part of Newmont Gold Corporation, and the nugget is currently on display in the museum of the Perth Mint based on a long-term agreement with Newmont.

The "Normandy Nugget", on display at the Perth Mint, Western Australia

Western Australia is the country's most important gold mining region and has been since the late 1880s when gold was discovered in a number of areas including  Kalgoorie. Today, Kalgoorie is home to the Super-pit, one of Australia's largest open-cast gold mines.

According to the US Geological Survey, Australia is the world's second largest gold producer, with gold mine output of 270 tonnes in 2016.

5. Ironstone’s “Crown Jewel”, California

Ironstone’s “Crown Jewel” gold nugget is a single piece of crystalline leaf gold found in California in December 1992 by Sonora Mining Company. The gold was found embedded in quartz rock, however through a cleaning process involving hydrofluoric acid, most of the quartz was removed to reveal a single mass of gold weighing 44 troy pounds (16.4 kgs).

Ironstone Crown Jewel, Crystalline Leaf Gold

The Ironstone “nugget” is now on display at a heritage museum in Ironstone Vineyards in California, and is sometimes referred to as the “Kautz Crystalline Gold Leaf Specimen” in reference to John Kautz, owner of Ironstone Vineyards.

Gold and California have been interlinked since the famous northern California gold rush of the late 1840s - early 1850s. The US is still a major gold producer, and in 2016 produced an estimated 209 tonnes of gold according to US Geological Surveys (USGS), putting it in fourth place behind, Chine, Australia and Russia. Nowadays however, Nevada and Alaska are the US' two primary gold producing states, although there are still gold mining operations in California such as New Gold's Mesquite gold mine.

Footnotes:

There are actually a number of gold nuggets from Brazil's Serra Pelada region on display in the Brazilian central bank's museum. A list of these gold nuggets can be seen here. Three of these additional gold nuggets are listed with gold content weights of 30.56 kgs, 29.89 kgs, and 28.2 kgs, respectively, which would make them larger than both the 'Hand of Faith' nugget and the 'Normandy Nugget'. However, none of these other Brazilian gold nuggets has received fame in the same way as the Pepita Canaã nugget, and the Banco Central do Brasil seems to prefer to display them anonymously. Technically these other Brazilian gold nuggets from Serra Pelada would push both the Australian nuggets and the Ironstone nugget down the list.

Two historic gold nuggets found in Victoria, Australia in the 1800s were both larger than the Brazilian Pepita Canaã nugget, and both at times still appear in "world's largest gold nugget lists". The first of these was "The Welcome" nugget found in Ballarat in 1858 during the Victoria gold rush. This gold nugget weighed approximately 69.98 kgs. However, "The Welcome" was subsequently shipped to England and melted down by the Royal Mint in 1859 to fabricate Gold Sovereign coins. Replicas of "The Welcome" can still be seen today in a number of Australian museums. 

The 2nd large historical gold nugget found in Australia was the  “Welcome Stranger” which was discovered in Victoria in 1869. Reports as to its weight vary but are consistently above 70 kgs of gold content. Within a few days of it being found, the Welcome Stranger was cut up, melted down into ingots, and shipped to the Bank of England via Melbourne. However, a replica of the Welcome Stranger nugget can still be seen today at the City Museum in Melbourne.

Gold for Christmas – Gold’s Importance in Religion

Gold and Religion have always been symbolically linked in countless civilizations from antiquity to the present day. From religious artwork to religious symbolism, gold is unique among metals in being central to many of the world’s religions, and gold has long been associated with the divine sphere.

Gold In Christianity

During the festive season of Christmas, it is apt therefore to reflect on the importance of gold in religion. In the Christian tradition, gold appears in the story of Christmas and its association with the birth of Christ in Bethlehem. According to the Bible, when Jesus Christ was born to Bethlehem, a group of wise men (Magi) made a journey from the East to celebrate and worship the birth, bringing with them gifts of gold, frankincense and myrrh. The gift of gold was a symbol of wealth and power, but also, according to religious scholars, a symbol of Christ’s kingship on Earth.

Nativity Scene in Bethlehem with Magi bearing gifts including Gold

In fact, throughout the Bible, gold is frequently mentioned, from the first book (Genesis) to the last book (Revelations), and everywhere in between. For example, the Book of Genesis refers to 4 rivers flowing out of the Garden of Eden, one of which, the Pishon, “flows around the whole land of Havilah, where there is gold.” (Genesis 2:10 and 2:11). And in the Book of Revelations, a description of a new Jerusalem describes the street of the city was pure gold, as it were transparent glass” (Revelation 21:21).

While gold is attributed considerable value in the Bible and is frequently referred to as the most valuable substance on earth and the greatest form of wealth, it is also juxtaposed with spiritual value, so as to illustrate that spiritual value is beyond even the substantial material value of gold. For example, Psalm 119:127 says that: “Therefore I love your commandments more than gold, yes, more than fine gold!”

So it's not surprising then that gold plays an important role in the Christian religion. In Christianity, gold has been extensively used to decorate churches, cathedrals and chapels, to fashion crosses, chalices and altar furniture, and as gold leaf to gild statues, adorn manuscripts, and to represent halos and divine light in Middle Age and Renaissance period art. Gold is also found on the gilded domes of some Christian Orthodox churches in Eastern Europe.

Gold's Unique Role in Religions

But what does gold possess that gives it universal appeal to all the world’s major religions, and to ancient religious traditions throughout antiquity, such as in Ancient Egypt? And why in the hierarchy of metals, does gold take precedence over other all metals?

The reasons are many and varied. With its unique glow and yellow shine, gold is symbolic of the colour of the sun, and in religious art gold is associated with daylight and the energy of the divine.

St Peter's Basilica, Papal Altar, Vatican City, Rome

Since it is relatively rare, indestructible and doesn't decay, the use of gold in religion conveys a preciousness and immortality that other metals do not convey. And since gold is highly malleable and capable of being formed into many shapes and objects, gold naturally lends itself to artistic works and decorative ornamentation. That is why gold is found as decoration in religious places of worship such as churches and temples and in religious artifacts and decorating sacred scriptures.

And because religions evolve and changes and are influenced by previous religious traditions, the special status of gold in a religious context has persisted down through history from one religion to another.

Replica of the Ark of the Covenant

The Biblical Ark of the Covenant which was once stored in Jerusalem was said to be fully gilded in gold. And in Judaism, the symbolic menorah or lampstand is also often crafted from gold. Some of the Scriptures and Writings of Judaism also overlap with various texts of the Old Testament in the Christian Bible, so the references to gold in Hebrew Scriptures and Writings are also to some extent the same references to gold that are found in the Old Testament.

Gold In Islam

Gold has long had an intricate connection with Islamic culture with its role being shaped by the need to comply with Islamic teachings. Since usury is forbidden in Islam, a form of money, such as gold, that does not involve interest and usury evolved in the shape of the historical gold dinar coin as well as the Islamic silver dirham. This historical gold dinar in Islam was first produced in the seventh century. According to Islamic law, the dinar had to be made from 22k gold and have a weight of 4.25 grams. Since the dinar is gold, its weight determines its value, and it acted as a stable medium of exchange and not a paper promise, again complying with the word of the Quran.

In modern times, there has even been a revival of interest in the concept of this historic gold dinar in Malaysia. This has led to a number of initiatives where modern gold dinars were launched by Malaysia’s Kelantan and Perak states in 2010 and 2011. One side of the Perak gold dinar even features the design of the original gold dinar from the late seventh century AD. Modern gold dinars have also been issued by the Indonesian Islamic Mint Nusantara.

Ancient Gold Dinar, Islamic Money 

Under Shari’ah law, gold is also one of 6 Ribawi goods (along with silver, wheat, barley, salt, and dates) which must be sold based on their weight and measurement, so as to ensure transaction equality among trading parties.  Speculation is also prohibited in Ribawi goods.

With the growth and proliferation of modern gold-based investment assets, there has been a need to update Sharu’ah guidance on  the type of transactions in gold which meet Shari’ah compliance. This was achieved in December 2016, when the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) issued a Shari’ah Standard on Gold which clarified Shari’ah complaint forms of gold that can be traded or used in gold-backed investment products.

Gold is also important in Islam as decoration and adornment. While Islam generally prohibits men from wearing gold (but not women), Islamic architecture also at times makes abundance use of gold in areas such as mosque decoration, for example, the Sheikh Zayed Grand Mosque in Abu Dhabi.

Gold in Hinduism

Gold is central to the Hindu religion and culture which is practised throughout India. Some major Hindu deities are associated with gold such as Brahma, the Hindu God of Creation who was born from a cosmic golden egg of creation. Gold is also symbolic of Lakshmi, the Hindu Goddess of wealth, prosperity and good fortune.

Therefore, gold is auspicious in Hinduism, which also explains why it is given as gifts for weddings and other special occasions, and gifted during festivals such as Dhanteras. For the same reason, gold is gifted in Hindu ceremonies, and devotees make regular donations and offerings of gold to Indian temples.

Sree Padmanabhaswamy Temple, India

The Sree Padmanabhaswamy Temple in Kerala stores what is now considered the largest gold hoard in the world. This hoard was confirmed in 2011, when some of the subterranean vaults of this temple were opened by order of the Supreme Court of India. The Padmanabhaswamy Temple’s treasure, which contains gold ornaments, gold statues, huge amounts of gold coins, and even a gold throne, has been accumulated over thousands of years from temple donations including donations from former Indian dynasties and kings.

Some temples in India are even covered in gold, such as the golden temple of Sripuram in Tamil Nadu which is covered in 1500 kgs of pure gold, and the Sri Harmandir Sahib Golden Temple in Punjab - an important pilgrimage destination for Sikhs - whose sanctum is covered in gold foil.

Gold in Buddhism

Gold is also central to and venerated in Buddhism. The colour gold in Buddhism is associated with the golden rays of the sun, and of enlightenment.

Temple of the Golden Buddha: Wat Traimit, Bangkok

Buddhist culture features various famous solid gold Buddha statues, the largest of which is the Golden Buddha in the Temple of Wat Traimit in Bangkok, Thailand, which weighs 5.5 tonnes, and is 2 meters high. Buddhist statues in Tibetan regions are usually also painted with gold. In 2013, the former king of Thailand even donated nearly 300 kgs of gold to decorate the spire of the Buddhist Mahabodhi temple in Bodh Gaya, India.Gold is also used to decorate the famous Zen Buddhist Temple of the Golden Pavilion in Kyoto, which is covered in pure gold leaf.

Gifting of Gold for the Holiday Season

As gold is rare and precious, it has always and will always make an impressive gift which will be cherished and remembered. With its intrinsic connection to Christmas and the Christian tradition, as well as deep association to all the world's other major religions, the gift of gold is also a thoughtful one that transcends even the material value of the actual gold content. It may be of interest then to know of a selection of bullion gold bars and bullion gold coins that are ideal for gifting, and that will create a lasting impression for those that receive them.

PAMP is one of the world’s most prestigious and most sought-after names for high quality gold bars. Fabricated in Switzerland, PAMP’s 99.99% pure gold bars make ideal gifts, such as a 100 gram minted gold bar presented in a stylized and secure presentation card, or the more traditional and rugged 100 gram cast gold bar, each of which is stamped on the front with its own serial number. PAMP also makes a whole range of smaller minted gold bars which also make great gifts, such as an attractively priced 10 gram minted gold bar.

For customers with a preference for gifting Tola denominated gold bars, PAMP’s 5 Tola gold bar is an affordable weight size between the 50 gram and 100 gram bar weights.

Divisible gold products, often known as combi gold or multi gold, are ideally suited for gold gifting as they consist of a series of detachable gold bars, which can be individually gifted. The 10 gram gold bar MultiDisc from the prestigious Heraeus gold refinery in Hanau, Germany, is a tamper-proof rotatable storage and display disc containing 10 individually minted 1 gram gold bars. This disc’s design allows individual 1 gram gold bars to be dispensed, so is an ideal product for those wishing to gift small gold bars to a series of recipients.

In a similar vein, the 50 gram Gold CombiBar from the famous Swiss refinery Valcambi can be sub-divided into 50 x 1 gram gold bars. Gold CombiBars comprise a 10 x 5 rectangle of 1 gram gold bars about the size and width of a credit card, that can also fit in a wallet. Each Combibar’s 1 gram constituent bars are held together by grooves within the larger gold bar which can be individually attached and given as gifts.

Each 1 gram gold bar segment is also embossed with the Valcambi logo and the segment’s weight and fineness, so when detached, each segment still carries Valcambi’s guarantee of authenticity.

One of the world’s most highly regarded bullion gold coins is the gold Canadian Maple Leaf, produced by the Royal Canadian Mint in Ottawa, Canada. Fabricated in four sizes from a 1 ounce gold coin, through to 0.5 ounce, 0.25 ounce and 0.1 ounce, the gold Maple Leaf range offers an attractive gifting options at a series of price levels, and is a handsome and thoughtful gift for the recipient.

Another timeless gift in the gold bullion coin category is the 1 ounce Austrian Gold Philharmonic coin, produced by the prestigious Austrian Mint, one of the oldest mints in Europe. This 1 ounce gold coin, which is non-circulating legal tender in the Euro zone, celebrates the Vienna Philharmonic Orchestra which is world-famous for its New Year’s Eve and New Year’s Day concerts in Vienna, Austria.

The Most Outlandish Gold Products You Can Buy

BullionStar would like to thank all our friends and customers for supporting us during 2017, and to wish all of you a Merry Christmas and a Happy New Year! To wrap up the year, we have published this light-hearted article about outlandish products made from gold.

Throughout the world, many luxury good companies vie for attention in producing luxury products made from gold, plated with gold, or with substantial gold content. These products tend to be very opulent and usually very expensive because of the gold content and workmanship that goes into them. It seems that nothing is off-limits for receiving the gold treatment.

While a lot of these products may be considered slightly ridiculous, what they have in common is that they are well-designed, mostly customized, and on the whole very valuable. The limited edition nature of the products and the fact that in some cases they are made to order also adds to their rarity value and collectability. Below we profile some of the more outlandish products made from gold, all of which, apart from some one-off customized designs, are available for purchase.

Gold Fidget Spinner

By now, nearly everyone will have heard of fidget spinners, the spinning toy which gained worldwide popularity in 2017. Tapping into this trend, Russian luxury gift specialist ‘Caviar’ released a limited-edition fidget spinner in mid-2017, made from 100 grams of 18-karat gold. As the world’s most expensive fidget spinner, Caviar’s gold fidget spinner model retails for nearly RUB 1m (US $17,000), but is now sold out on the company’s website.

The World's most expensive Fidget Spinner

Golden Tricycle

Toy manufacturer Wisa Gloria is famous in Switzerland for producing a traditional tricycle for young children. However in 2010, Wisa Gloria collaborated with designer Werner Harerer in producing a 24-karat gold-plated version of its classic tricycle, complete with gold-plated wheel bearings.

Wisa Gloria's Gold-Plated Tricycle for 3 - 5 year holds. Source: WikiMedia Commons

Gold Nikon Camera

Nikon is one of the top names in high-end cameras, and its products are synonymous with quality and used widely by professional photographers. Now luxury technology company Brikk, based in California, has gone one step further and created a limited-edition gold Lux Nikon DF camera with matching lens. Both camera and lens are finished in pure 24-karat gold, and only 77 units of this edition have been produced, each costing US $58,000.

Nikon Camera plated in 24-karat Gold. Source: Company website

Gold Shirts

Some readers will be familiar with the story of a customized gold shirt produced for a man in India a few years ago. However, there were actually 2 shirts made for two different Indian men at about the same time. The first famous Indian gold shirt was made in 2012 for a money-lender in Pune called Datta Phuge. This shirt was stitched from 22-karat gold strands, weighed 3.32 kgs, and at the time was said to be worth US$ 240,000.

Pankaj Parakh in a gold shirt, flanked by bodyguards

The second famous shirt made entirely of gold was commissioned in 2014 for a politician / textile businessman named Pankaj Parakh from near Mumbai. This shirt weighed 4 kgs, was made from 18-22 karat gold and cost about US$ 210,000.

Gold staples

These 14-karat gold-plated staples are available from Dutch design company Oooms. Deisgned to be used either as a form of jewelry stapled to clothes or even as luxury conventional staples, they come in a pack of 24, and can be purchased for Euro 59 (about US$ 69). This works out at just under US$ 3 per staple.

Gold-Plated Staples. Source: Company website

Gold Dumbbells

Those who like to work out while being surrounded by gold and opulence might want to consider gold dumbbells. One such company that products gold weights is UK-based Custom Gym Equipment, a specialist in luxury fitness. According to its website, its client-base comes from “the super yacht world, luxury hospitality, luxury interior design and luxury private homes”.

Golden Dumbells. Source: Company website

Gold Table Football (Foosball)

There are a number of high-end table football (foosball) designs on the market, but one of the more luxurious offerings is a gold limited edition foosball table from Italian company Teckell. The table casing, legs and playing field are made from crystal glass, with one of the teams of players is plated with 24k gold, while the other team is decked in chrome. This table retails for around US $24,400.

Luxury Table Football with gold-plated players. Source: YLiving website

Gold Vacuum Cleaner

US company Go Vacuum hit the news in 2012 when it created a limited edition gold-plated vacuum cleaner which retailed for US$ 1 million. Made using 24-karat gold, the gold-plated model GV62711 was limited to 100 units and was a fully functional working vacuum cleaner. Each unit also came with its own engraved serial number and certificate of authenticity.

Gold-Plated Vacuum Cleaner - One of the more ridiculous items made of Gold. Source: www.inhabitat.com

Gold-Plated Supercars

From Ferraris to Lamborghinis, and from Porsches to Mercedes, there are many gold-plated and gold painted supercars on the streets of Dubai. When an expensive sports car is not enough, then the next step is to cover it in gold, like this Ferrari 599 GTB Fiorano

Ferrari 599 GTB Fiorano

Gold Christmas Tree

In 2011, Japanese gold and jewelry company Ginza Tanaka, headquartered in Tokyo, created a pure gold Christmas tree. Containing 12 kgs of gold and standing 2.4 metres tall, the tree is also adorned with gold ornaments, and when it was made cost 150 million yen (which at the time was nearly US$ 2 million).

Ginza Tanaka Gold Christmas Tree

And there you have it folks! While the above list is a selection of some of the fairly outlandish gold laden items that are on the market, at BullionStar we still recommend that you to buy lasting gifts for your loved ones this Christmas and New Year in the form of bullion bars and bullion coins!

Mustafa Centre: Gold in Singapore

While there are a number of specialist companies such as BullionStar servicing Singapore’s retail gold bullion market, the most unusual place to buy gold bars in Singapore must be the Mustafa Centre in the Little India neighborhood.

Located in a building on Syed Alwi Road, and part of another adjacent building on Serangoon Road, the Mustafa Centre is a cluttered haphazard department store and arcade that seems to sell everything from clothes to electronics, from perfumes to gold jewelry, and everything in between. It is also known as being one of the biggest gold jewelry outlets in Singapore.

Crowded and Congested

The Mustafa Centre itself is frequently crowded, often congested, and stays open 24 hours a day. Even trying to approach one of the entrances to the Mustafa Centre can be a stressful experience, and this is after navigating through a maze of often crowded streets if you find yourself approaching from the nearest MRT Station, which is itself a 15 minute walk from Mustafa’s premises.

Once you do happen to find Mustafa’s gold jewelry section, which is located in the basement 1 level of one of the centre's buildings, you will have to navigate past a floorspace crammed with clothes displays before stumbling upon a series of interconnected aisles assigned to gold jewelry.

While this jewelry space is about the size of a basketball court and stacked full of counters displaying gold earrings, gold rings, and gold chains and necklaces, the gold bar and gold coin display is relegated to a tiny rectangular counter, as if it was an after-thought among the masses of gold jewelry being hawked. This small gold bar and coin counter is itself cluttered, and badly presented, and is reminiscent of the display cases of a second-hand IT equipment shop.

Limited Selection

The advertised prices for the limited selection of gold bars and gold coins that are on offer at Mustafa consists of a partially typed and partially hand-written price list page that sits on top of the counter. When this correspondent visited on the Sunday afternoon of 29 October, the price list strangely had the dates 28 - 29 October scrawled at the top, as if it had just been written one time that weekend on the Saturday and then not updated over the weekend.

The accuracy of the prices on that particular price list are therefore called into question. Where the Mustafa Centre sources its gold prices or 'Gold Rate' from is also not clear. In India and India's expat communities, 'Gold Rate' is a term often used to refer to the gold price.

Mustafa's bullion products and their prices, although typed, are squashed on to the list, with various hand-written notes along the left and right side margins. Strangely, parts of the list are highlighted in yellow highlighter marker. What this signifies we do not know, but perhaps it refers to the products that are in stock as opposed to out of stock.

Mustafa's gold product price list, 28-29 October

Within the actual display cases of Mustafa's gold bar display cases, the gold bars are very much crammed into the display area as if everything in stock is actually on display. The old adage of "more is less" as regards presentation and visual display seems to have been lost on whoever lays out the Mustafa display cases.

Mustafa's gold bar display cases - Pack 'em in, Pile 'em high...

Disappointingly, there is also a very limited range and brands of gold bars and gold coins actually offered by Mustafa's gold bullion counter, with nearly everything in the bar section being of the PAMP brand, and with very few gold coin types at all.

Mustafa's gold bullion display cases - hidden in a small section of the gold jewelry store

A number of precious metals research consultancies regularly do field trips to bullion markets around the world, including Singapore, so as to gauge at first hand the level of retail demand for bullion in a particular market. As regards Singapore, some anecdotal evidence we have heard from these consultancies is that it is virtually impossible to calculate the level of gold bullion demand in the Little India area.

Some of the reason for this is because gold bars and gold coins regularly arrive into Little India that have been hand carried from countries such as Dubai or other regional markets. And so this gold would not be reflected in the Singapore supply statistics of, for example, the Swiss refineries or the Canadian and Australian mints.

There are also a lot of resales of gold bullion in Little India, such as a parent swapping gold bars for gold jewelry to give to a sibling as a wedding present. It is therefore difficult to estimate where the gold bullion sold in Little India comes from. Not Mustafa specifically, but this issue must be borne in mind as regards Little India in general.

BullionStar's Spacious Shop and Showroom

In contrast to Little India's Mustafa, BullionStar could not be more different. BullionStar's shop and bullion showroom in central Singapore is located in an easily accessible and well-known section of New Bridge Road across from Clarke Quay Central Shopping mall. BullionStar's premises is also adjacent to the Clarke Quay MRT station. Those working in the Central Business District (CBD) will find that BullionStar is just a short lunchtime walk from the CBD.  And from Chinatown, BullionStar's showroom is less than a 10 minute walk.

Spacious Display Cases in BullionStar's Shop and Showroom

All of the gold bars and gold coins in the extensive range of gold bullion stocked by BullionStar are sourced either directly from the world's most prestigious precious metals refineries and mints such as Argor-Heraeus, PAMP, Heraeus, Valcambi, and the Royal Canadian Mint, or are supplied directly to BullionStar by the world's most renowned precious metals wholesalers such as Dillon Gage and A-Mark. BullionStar staff are also knowledgeable about all aspects of the range of gold and silver bullion stocked.

In BullionStar's shop and showroom, the floor-space is generous, the design calm and ergonomic, with many display cases devoted to gold bullion and silver bullion. Nothing is cluttered, and visitors and customers entering the air-conditioned showroom will be able to browse and view a huge range of gold bars and gold coins, and silver bars and silver coins, with every product type stylishly and spaciously displayed in its own display case. All display cases are also well-lit and well presented.

An impressive feature which BullionStar customers find useful are the electronic screens next to each display case which show updated prices for those products. These prices are live and are displayed electronically and updated electronically in real-time.

A final point to note is that the Mustafa Centre's gold bullion counter does relatively poorly in customer reviews, with customer feedback of poor customer service, dis-interested staff, and prices higher than elsewhere in Singapore. Based on reviews on the Singapore website 'Bullion Reviews', Mustafa scores lowest out of all 6 Singapore bullion dealers featured, with Mustafa getting a total score of 3.9 from 27 reviews.

In contrast, on the same review site, BullionStar receives a total score of 9.1 from 131 reviews. And BullionStar's prices are generally perceived to be some of the most competitive, if not the most competitive, in Singapore.

Eat Gold

A popular phrase in segments of the mainstream financial media is that “You Can’t Eat Gold”. We don’t know who first uttered this comment, but it was more than likely a talking-head or Wall Street analyst on CNBC or Bloomberg.

The disparaging claim seems to be based on concluding that in a financial or monetary crisis, if you own gold, that “You Can’t Eat It”. And so, according to the logic of whoever came up with the phrase, this would make gold useless during a financial crisis.

In addition to the misleading and irrelevant nature of the comment, which we will discuss below, the claim that “you can’t eat gold” is actually factually wrong. And that is because you can eat gold. And also drink it.

Eating and Drinking Gold

While gold can be eaten, it cannot be digested. But it is non-toxic to the human body. And it does not react chemically in the human body. That is why gold can and does appear safely in a number of foods and drinks, not surprisingly foods and drinks which are predominantly at the luxury end of the market.

Some readers will have heard of Goldschläger, a Swiss/Italian liquor which has flakes gold suspended within it. On a similar note, a Swiss gin called ‘Studer Swiss Gold Gin’ also contains flakes of gold. Staying within Switzerland, you can also buy edible gold products including “Swiss chocolate truffles with gold flakes”. Not to be outdone by the Swiss, the Emirates Palace Hotel in Abu Dhabi (United Arab Emirates) offers a ‘Palace Cappucino” which is sprinkled with gold flakes.

In Selfridges department store in London, you can buy a “billionaires soft serve” ice cream cone topped with both sprinklings of gold leaf and a gold leaf covered flake. While in New York, in Manhattan’s Upper East Side, a high-end restaurant offers a "Golden Opulence Sundae” topped with gold leaf, for US$ 1000 a glass. Back in England, a specialist cheese producer in Leicestershire created Britain's most expensive cheese - "Clawson Stilton Gold", a stilton cheese interwoven with edible gold leaf and shot-through with gold liqueur. These uses of gold in food and beverages illustrate that gold is a sought after and prestigious substance, but also that gold is real, that gold is tangible and that gold is of value.

Wall Street's Selective Focus

The logic of the “you can’t eat gold” comment, as well as being wrong, is also flawed. Because by extension, you can’t eat any of Wall Street's favorite investment assets. Imagine chewing on financial securities or fiat currencies. But whoever coined the phrase “you can’t eat gold” conveniently failed to mention this on CNBC. We would challenge anyone, especially CNBC and MSNBC, to eat share certificates or bond certificates or the electronic equivalent thereof.

Nor can you eat the electronic coins of cryptocurrencies such as Bitcoin, Ethereum’s Ether or Litecoin. Real assets such as art, antiques, real estate, agricultural land, or vintage cars are also off the menu. A possible exception is that can drink an expensive investment wine collection, but would you really want to do this, as then you would be consuming your principal investment?

Wall Street analysts fail to mention that you can't eat stocks and ETFs

Gold's Many and Varied Benefits

But beyond the fact that you can in fact eat gold, and that Wall Street never points out the non-edibility of stocks and bonds, there are many beneficial reasons to buy and own investment grade physical gold of which we recently pointed out in 28 reasons to buy and own physical gold. What we are talking about is real physical gold in the form of gold bars and gold coins. This is true both during times of financial crisis, and also over the long-term as a form of investment and savings.

Gold is without doubt the ultimate safe haven asset. In times of financial crisis and turmoil, investors and savers flock to gold as a wealth preservation strategy. The reason for investing in gold during times of crisis is based on the fact that investors instinctively know that the gold price behaves differently to the prices of other assets, particularly during crises. This is because the gold price moves independently of economic and business cycles.

In times of war and social upheaval, physical gold's benefits also come to the fore. Since gold has a high value to weight ratio, significant personal wealth can discreetly be carried in the form of gold across borders and frontiers and within areas of conflict.

Since gold is a universal money supported by a highly liquid global market, it will always be accepted everywhere at the going gold price. Gold can easily be sold. Gold can easily be traded or even bartered with, especially in non-functioning economies where the local paper currency has collapsed or has become worthless. The fact that gold coins are regularly issued to elite military personnel in areas of conflict attests to gold's critical benefits in times of monetary crisis and localized economic collapse.

Gold as Store of Value

But gold is not just of use during financial crises. It is also an essential asset to own over the long-term as a strategic form of saving and investment. Physical gold retains its purchasing power over long periods of time. This is in contrast to fiat currencies issued by the world's central banks, which generally lose most of their purchasing power over time. In other words, gold is a great hedge against inflation, as the gold price adjusts upwards to offset inflation. The gold price even adjusts to inflation expectations, hence it is sometimes called an inflation barometer and is watched like a hawk by central bankers because the gold price signals future inflation.

Physical gold is also an asset without counterparty risk. This is because when you own physical gold in the form of gold bars or gold coins, there are no counterparties. In other words, the physical gold that you own outright is no one else's liability. Nor are there any governments or central banks involved in issuing gold, or in trying to increase and debase its supply. Gold also lacks default risk, because it cannot default.

Physical gold is also inherently valuable because it is a scarce precious metal that is difficult and costly to mine and refine. Gold's price will never go to zero because it has a finite and significant production cost. Physical gold is difficult to counterfeit, impossible to create artificially, and cannot be debased.

These are just some of the reasons for buying and owning physical gold. Please see BullionStar's recent article "28 Reasons to Buy Physical Gold" for a  list of reasons why you should consider buying physical gold.

Gold in Zimbabwe & Venezuela & South Korea

In the real world, owning physical gold can be of critical importance in scenarios where trust in a nation's money supply has evaporated, such as is currently the case in Venezuela or Zimbabwe.

Gold can also be of critical importance when entire nations suffer economic shocks.  A case in point is the interesting experience of South Korea during the Asian financial crisis that swept the region in the late 1990s. This crisis left the South Korean economy severely impaired, with it’s currency, the Won, collapsing against the US dollar.

In addition to a bailout by the International Monetary Fund, the South Korean government also launched a patriotic campaign in early 1998 to actually collect physical gold from the South Korean citizens which was then sold on the international market to raise much-needed foreign currency. This collective campaign was pursued precisely because the South Korean government understood that gold is a high-quality liquid asset that has substantial value.

National Mobilization of Gold

By mid-March 1998, the South Korean citizenry had donated more than 220 tonnes of gold, worth over US$2 billion, in the form of investment gold coins and bars, and other gold in the form of rings, jewelry, and gold medals. More than 3 million households were said to have contributed. This collective mobilization of gold to overcome a nation's economic adversity and raise financing is a great illustration of how gold comes to the fore in a time of crisis, due to its store of value, safe haven, and high liquidity characteristics.

In conclusion, knowing the many compelling reasons to buy and hold gold, and how gold can sometimes be a lifeline in a time of crisis, the claim that "you can't eat gold" is exposed for what it is, misguided and disingenuous, and shows either ignorance on the part of the people who use it, or more likely, a deliberate intention to mislead and deceive.

Store Gold in Minced Meat? 26 Ways to Store Gold

Gold is a highly valuable asset. When your buy gold, It is critical to store your gold bars and gold coins in a location that is secure but at the same time accessible.

Inside a Home

There are many places to store gold and other precious metals in your home, with some places more secure and covert than others. Luckily, since physical gold has a high value-to-weight ratio, for most people, storing their gold bars and gold coins won’t take up too much space.

Hide Your Gold Inside Food Items and Store them in the Freezer 

1. Floorboards: Gold can be hidden under floorboards between joists, preferably under a short section of board covered by a rug or carpet.

2. Chimney: Positioning gold in a recess within a disused fireplace chimney stack is also an option.

Gold and other Precious Metals such as Silver can be Stored under Floor Boards

3. Within a Wall: A natural hollow or cavity in an internal wall, or a hidden panel in a wall, are also worth considering.

4. Frozen Food: Hiding gold bars and gold coins within frozen food in a freezer is possible, for example, actually buried and frozen within minced meat or in a large tub of ice-cream. Horizontal chest freezers used for long-term deep freeze storage of supermarket produce are ideal for this tactic.

Gold can be hidden inside Minced Meat and Stored in your Freezer

5. Piping: In a kitchen, possible covert storage locations include within a section of disused kitchen piping, or indeed within a section of false piping that has been specifically designed to accommodate your gold bars and coins, but which does not function as a real pipe.

6. Air-Conditioning: Gold can be concealed within an air-conditioning duct, which has the added benefit of usually being above head height.

7. Furniture: Heavy objects such as immovable furniture can also be considered as hiding places for gold, places that may not be obvious to time constrained intruders. For example, gold bars and gold coins could be securely attached within a compartment inside a chest of drawers or even stored inside a piano. A large cache of Gold Sovereigns was actually found inside an old piano in England in 2017.

8. Aquarium: For those with the option, storing a gold bar / gold coin cache inside an aquarium or fish tank is worth considering, among aquatic plants and fish tank paraphernalia.

9. Large Plant Pots: Large indoor plant pots on a veranda, patio or balcony provide another covet place for hiding gold. with the gold within the pots under the actual plants. These pots are always difficult to move, and would not normally be on the radar of a burglar.

Attics and Basements

Attics and basements provide further practical options for covert storage, and the inconvenience and difficulty of accessing such locations could act as a secondary deterrent to thieves.

10. Water Tank: In an attic, one possible place to hide your gold bars and coins is in a covered water tank.

11. Insulation: Another option is to secure your gold under ceiling insulation, preferably on ceiling joists that can support the weight of the gold.

12. Basement: Within the basement of a house, the choices for hiding gold are varied and include alcoves behind walls and under a basement floor.

13. Basement Junk: A gold cache can strategically be placed in one of the many large junk items or boxes that invariably end up being stored in basements - as long as you make a record of which item or box you have stored your gold in.

Garden Shed / Workshop

14. Paint Tin: Gold coins or gold bars can be hidden in an old paint tin in a garden shed or workshop, a tin that is securely sealed and looks to have not been opened in a long time. The sheer difficulty for intruders to search numerous old paint tins in a shed or workshop makes it highly improbable that anyone would spend time doing so during a break-in or robbery.

Hiding your Gold Bars in an Old Paint Tin and Storing it in a Shed is one option

On Your Land or Property

Apartments will in most cases lack a garden, a location which can offer the adventurous multiple cunning places in which to covertly store their gold.

15. Buried in Garden: If your property has a garden, you can dig down into the ground on your land, wrap your gold securely, and bury it deep enough in the hole under soil.

16. Fishpond: Those with a large enough fish pond could also consider storing their gold cache at the bottom of the fish pond preferably among pond plants or reeds.

17. Under and In Trees: Under a tree in your garden or in the hollow of an old tree trunk on your property provide further concealment opportunities for gold. Indeed, in 2014, a US$10 million cache of 19th century gold coins was discovered under a tree on a property in Northern California.

18. RVs and Caravans: Those with RVs or caravans or rarely used boats that are stored on their properties could consider the possibility of storing their gold in these vehicles. However, this is presuming the entire property is secure and inaccessible to intruders, and runs the risk that the RV or boat or caravan might itself be the target of a robbery.

Hidden Rooms, Home Safes, Display Cases

19. Hidden Room: For those lucky enough to have a panic room (or other hidden room) in their house or apartment, this would obviously be a ready-made location to store their gold, as it is both secure and concealed. But would this be the first place a team of sophisticated intruders would try to locate and access if they had suspicions that such a room existed?

20. Home Safe: A home safe will offer a secure location in which to store gold bars and coins. Home safes rang from the small models such as those found in hotel rooms with digital keypads, to larger safes with combination locks, to large models that are fireproof and waterproof. The main consideration with a home safe is whether the safe itself is hidden and concealed within a house or apartment, or whether it is installed in a location which is easier to access but which could be discovered by burglars.

An Electronic Keypad Home Safe, also popular in Hotels

21: Display Cases: A final home option for those with the means and security, would be to store your gold bars and gold coins in museum style high-security and alarmed display cases within your house or apartment. While this will impress friends and visitors, you would need to be confident that your property is fairly impenetrable.

Public Land

22. On Public Land: A less used and unusual tactic would be to hide your gold bars or gold coins in a secure and remote location which is on public land, for example in a forest, mountainous area, or coastal location. These locations have the benefit of being completely off the radar, but could by chance be inadvertently discovered by passers by, or disturbed by wildlife. A public location also runs the risk that it could be developed in the future, for example for road or path construction, so your gold could end up being buried under asphalt.

Hide your Gold on Public Land, such as in a Forest

Safety Deposit Boxes

23. Safe Deposit Boxes: Renting and using a safety deposit box is a common way to store valuables including gold bars, gold coins, and other precious metals.

While safety deposit box companies and banks will pitch the fact that only the key holder has access to and knowledge of the box contents, this is a two-edged sword in some jurisdictions because of the following.

If police or other law enforcement officials raid a safety deposit box company in the pursuit of criminal assets, and seize all the contents of all the boxes, then your legitimate valuables could be confiscated and be extremely difficult to get back. For example, a number of safety deposit box companies in central London were raided by Metropolitan police in 2008, events in which everything in every box was seized. In typical government style, gold, jewels and other high value assets were the most of interest to law enforcement. This type of operation undermines the entire premise of deposit box confidentiality and is a disaster for those storing legitimate assets in these locations.

Safety Deposit Boxes - Run the Risk of Theft or Confiscation?

Safety deposit box companies can also be the target of professional thieves. Again, London provides a prime example, when in 2015 the vault of a safety deposit company in the famous Hatton Garden jewelry district was robbed by a gang of professional thieves over an Easter weekend and million of pounds worth of assets were taken from a large number of safety deposit boxes in the vault.

Safety deposit boxes within bank properties also pose another concern, in that since the box location is within a bank premises, the location could become inaccessible in the event banks remained closed during a financial crisis (think Cyprus in 2013), or fall under dictatorial government directives that the contents of safety deposit boxes would be in accessible due to capital controls (think Greece in 2015).

A final point to note is that safety deposit box companies can eventually open your box if you fail to pay the storage charges, and sell whatever is needed to pay the outstanding storage fees.

Stored with Family or Attorney / Solicitor

24. Family Member A less obvious option would be to ask a trusted family member to take care of the storage arrangements for some or all of your gold bars and / or gold coins. Storing portions of your gold in various locations could be considered a 'location diversification strategy.'

This  arrangement would obviously be based on trust and you would need to ensure that wherever they stored the gold at their property was itself a secure and sensible place.

25. Attorney / Lawyer / Solicitor: In a similar vein, you could instruct your attorney / lawyer / solicitor to take care of storage arrangements for some or all of your gold. This arrangement would have to be based on a formal contractual arrangement or understanding and could involve a legal trust in some instances. It would probably also involve another layer of costs. Again, you would need to determine that the storage location used by the lawyer or attorney was practical, smart and secure.

External Secure Vault

26. Secure Vault Storage: Beyond home storage options, a popular choice for many is to store their gold in the vault of an external precious metals storage provider. When using such a service, a number of considerations are critical, such as the jurisdiction of the provider, its reputation within the industry,  the cost of the storage service, whether the storage is allocated, and the flexibility and access offered to customers to keep track of, view, audit and withdraw their gold.

BullionStar's Secure Singapore Vault

BullionStar in Singapore operates a secure precious metals vault which is integrated into BullionStar's bullion shop and showroom in central Singapore. The storage vault itself is a high security old style steel bar concrete vault with a modern vault door.

Singapore is one of the safest and most secure countries in the world for storing gold bars and gold coins. With virtually no crime, a strong rule of law, and inviolable property rights, the Singapore jurisdiction is a natural gold storage location. Furthermore, the Government of Singapore actively supports and promotes the country as a gold trading and storage hub. There are no reporting requirements on buying, selling or storing gold or other precious metals in Singapore. There are also no sales taxes, no GST, or no taxes whatsoever on buying or selling gold in Singapore.

BullionStar Vault Storage - Documenting Customer Inventory

All customer gold stored in BullionStar’s vault in Singapore is stored on an allocated basis. Customers have full unencumbered legal ownership of their gold. All gold stored in the vault is fully insured for all insurable risks as evidenced by the Insurance Certificate.

All customer bullion product handling is meticulously documented, and all bullion is handled under camera surveillance. All customer bullion is photographed and photos of each customer’s bullion are uploaded to his /her online account.

Customers have full online control to view their gold holdings, view photographs of their gold bars and gold coins, see a transaction history, view the vault insurance certificate, generate a personalized vault certificate, and request withdrawals of gold bullion from the vault.

BullionStar employs a series of audit approaches which provide full confidence to vault customers. Via the 'Live audit report', customers can view photos of their own bullion.

BullionStar employs 5 levels of auditing to bullion products stored in the vault:

  • The ‘Live audit report’ allows customers to verify their stored bullion online and it view it visually via photographs.
  • Vault customers can also inspect their own bullion via a personal on-site customer audit at BullionStar's Singapore shop and showroom.
  • Physical audits of all customer owned bullion are conducted twice a year by LBMA approved independent auditor Bureau Veritas.
  • A physical stock inventory report is conducted each year as part of BullionStar's financial audit.
  • BullionStar futhermore conducts its own internal inventory audits.

Finally, BullionStar vault storage customers can withdraw their gold bars or gold coins at any time and have their gold delivered to them, or alternatively collect it in person at the BullionStar shop and showroom in Singapore.

28 Reasons to Buy Physical Gold

Throughout human history, gold has constantly emerged as an unparalleled form of savings, investment and wealth preservation. Due to its unique characteristics and features, gold has inherent value and cannot be debased. When holding physical gold, there is no counterparty risk or default risk. Wealth in the form of gold can also be held and stored anonymously.

From its ability to retain its purchasing power over time, to its safe haven status in times of financial turmoil and uncertainty, to gold's ability to diversify investment risk, there are many and varied reasons to own physical gold in the form of investment grade gold bars and gold coins.

1. Tangible with Inherent Value

Physical gold is real and tangible. It is indestructible, impossible to create artificially, and difficult to counterfeit. Mining physical gold is arduous and costly. Physical gold therefore has inherent value and worth. In contrast, paper money doesn't have any inherent value.

2. No Counterparty Risk

Physical gold has no counterparty risk. When you hold and own gold bars and gold coins outright, there is no counterparty. In contrast, paper gold (gold futures, gold certificates, gold-backed ETFs) all involve counterparty risk.

3. Scarcity

Gold deposits are relatively scarce across the world and difficult to mine and extract. New supply of physical gold is therefore limited and explains why gold is a precious metal. Gold's scarcity reinforces it's inherent value.

4. Cannot be Debased

Because of its physical characteristics and features, gold cannot be debased, and gold supply is immune to political meddling. Compare this to fiat money supplies which are constantly being debased and destroyed via deficit government spending, central bank quantitative easing and financial system bailouts. On a survivorship scale, gold has far outlived all fiat currencies by thousands of years.

5. A 6000 Year History

Gold has played a central role in society for thousands of years from the early civilizations of ancient Egypt, right up to the contemporary era. Gold has facilitated international trade throughout history, has been directly responsible for the economic expansion and prosperity of numerous civilizations throughout history, and has even been, due to gold exploration and mining, the direct catalyst for the growth of some of today’s best-known cities such as San Francisco, Johannesburg, and Sydney.

6. Store of Value

Gold is a preeminent store of value. Physical gold, in the form of gold bars or gold coins, retains its purchasing power over long periods of time despite general increases in the price of goods and services.

In contrast, fiat currencies such as the US Dollar are not stores of value and their purchasing power consistently becomes eroded by inflation or the general increase in the price level. Fiat currencies have a long history of either becoming totally worthless and going out of circulation, or else becoming completely debased, such as the US dollar, while remaining in circulation.

Since the creation of the US Federal Reserve in 1913, the US dollar has lost over 98% of its value relative to gold, i.e. the US dollar has lost over 98% of its purchasing power relative to gold.

Since 1913, the US Dollar has lost more than 98% of its value, while gold has retained its value.

7. Long- Term Inflation Hedge

Physical gold’s ability to retain its purchasing power over time is sometimes referred to as the “Golden Constant”. This reflects the fact that gold’s purchasing power is constant over long periods of time. This ‘constant’ exists because the gold price adjusts to changes in inflation and future inflation expectations. Therefore, physical gold is a long-term hedge against inflation.

8. A 2500 Year Track Record as Money

Because of its ability to retain value and act as a store of value, physical gold has been used as money for over 2500 years. Gold coins were first issued in the Lydian civilization in what is now modern Turkey. Subsequently gold was used as a stable form of money in Persia, ancient Greece, ancient Rome, the Spanish and Portuguese Empires, the British Empire, and right through to the various international gold standards of the 20th century.

It was only in August 1971 that the US famously suspended the convertibility of the US dollar into gold, a move which triggered the debt fueled expansion that is still having repercussions within today’s monetary system.

To put gold’s monetary importance into perspective, for 97% of the last 2500 years, gold has been chosen by numerous sophisticated civilizations as the form of money par excellence and an anchor of stability, precisely because of its ability to retain its value.

9. Safe Haven

Physical gold acts as a safe haven asset in times of conflict, war and geopolitical turmoil. During the financial market stresses and heightened uncertainties caused by wars, conflicts and turmoil, the counterparty risk of most financial assets spikes. But since physical gold does not have any counterparty risk, investors rush to gold during these periods so as to preserve their wealth. This is analogous to sheltering in a safe harbor. Gold can thus be seen as a form of financial insurance against catastrophe.

10. Portable Anonymous Wealth

Gold bars and gold coins combine high value with high portability. In times of conflict and war, gold bars and gold coins are ideal for transporting wealth and savings across borders and within conflict zones in an anonymous fashion.

11. Universal Acceptance

Gold is universally accepted as money across the world, with the highly liquid global market always providing ample sales opportunities for gold bars and gold coins. This means that whichever city you are in across the world, you can always sell or trade your gold bars and gold coins.

12. Emergency Money

Military personnel are often issued with gold coins that they carry with them in conflicts zones as a form of emergency universal money. For example, the British Ministry of Defense often issues RAF pilots and SAS soldiers with Gold Sovereign coins to carry on their persons during combat missions and activities, such as in the Middle East.

Worthless paper Currencies vs the Inherent Value of Owning Physical Gold

13. Outside the Banking System

In the current era of global financial repression, physical gold is one of the few assets outside the financial system. Gold is not issued by any monetary authority or central bank or government. Because its not issued by any government or central bank, gold is independent of the banking system. Fully owned physical gold, if stored in a non-bank vault or held in one’s possession, is outside the banking system.

14. No Default Risk

Unlike a government bond, there is also no default risk with gold because it is not issued by any authority that could default. Gold bars and gold coins are no one else’s liability. Physical gold cannot go bankrupt or become insolvent. Therefore, there is no need to have to trust any other party when holding physical gold.

15. Portfolio Diversification

Adding an investment in gold to an existing portfolio of other investment assets such as stocks and bonds, reduces the volatility (risk) of the investment portfolio and can increase portfolio returns. This is because the gold price has a low to negative correlation with the prices of most other financial assets, because gold is less influenced by business cycles and macro-economic cycles than most other assets.

Numerous empirical studies by financial academics, as well as industry bodies, such as the World Gold Council, have validated gold’s role as a strategic portfolio diversifier. Optimal allocations to gold in multi-asset portfolios have found to be in the 5% to 10% range.

16. Currency Hedge

There is generally an inverse relationship between the gold price and the US dollar, in that the gold price generally moves in opposite directions to the US dollar. Therefore, holding gold can act as a currency hedge of the US dollar, and help manage the currency risk of portfolios denominated in US dollars.

17. Gold's Metallic Properties

Gold has many and varied metallic properties. These properties provide gold with many technological and commercial applications and uses, which in turn contribute as additional demand drivers in addition to the investment and monetary demand for gold.

Gold is highly ductile (can be drawn into very thin wire). It is also highly malleable (can be hammered and flattened into very thin film). Gold is a very good conductor of electricity and heat. Gold does not corrode or tarnish. It is chemically unreactive and non-toxic to the human body. Gold has a high luster and shine, and an attractive yellow glow.

These properties explain gold’s use in electrical and electronic wiring and circuits (e.g. computers and internet switches), its use in the medical and dental fields, gold’s use in solar panels, space travel, and gold’s traditional uses in jewelry, decoration, and ornamentation. With new technological uses being found for gold all the time, gold's demand pattern is diversified and underpinned by its commercial importance.

18. Physical gold - A tiny fraction of Paper Gold

The London wholesale gold market and the US-based COMEX gold futures market generate huge trading volumes of paper gold that dwarf the size of the physical gold market. However, these markets only trade derivatives on gold (futures and unallocated positions), representing fractionally-backed and unbacked claims on gold that could never be convertible into physical gold by claim holders.

In a scenario under which these paper gold markets became unsustainable, the prices of paper gold and physical gold would diverge, with the paper gold markets ceasing to trade and collapsing, and only physical gold retaining any real value. Physical gold is therefore an insurance against the collapse of the world's vast paper gold markets.

19. By Definition - Not an ETF

Physical gold Provides all the benefits that gold-backed Exchange Traded Funds (ETFs) do not. ETFs provide exposure to the gold price, not to gold. Holding physical gold is by definition direct exposure to gold. With most gold-backed ETFs, you cannot convert the units into gold and take delivery of the gold, and in many cases, the locations of the vaults are not even known. If holding physical allocated gold bars or gold coins in a vault, such as with BullionStar in Singapore, you can always take delivery.

Gold ETFs have many counterparty risks since there are many moving parts in an ETF such as a trustee, a custodian, and a sponsor / issuer. Physical gold has no counterparty risks. When you hold a gold-backed ETF, the quantity of gold backing the ETF declines over time due to management fees being offset against the gold holdings. When you hold physical gold, you always remain with 100% of the actual gold you first purchased. There is no erosion of holdings.

20. Anonymous Storage

Gold can be stored anonymously, either in your possession within your house or property, or in a vault in a jurisdiction, such as Singapore, that has no reporting requirements. Since gold has a high value to weight ratio, storing gold does not take up much space.

21. Independent of Internet

Owning physical gold is not reliant on having internet access and access to electronic wallets and cryptocurrency exchanges. Furthermore, gold cannot be stolen by hacking an electronic address or by transferring or deleting a number in a computer.

The Benefits of Owning Gold Coins and Gold Bars

22. Real Gold is Measured by Weight

Physical gold is measured in weight, not through a number set by a politician or central banker. When you buy a 1 Kilo gold bar, or a 10 Tola gold bar, or a 1 troy ounce gold coin, or a 5 Tael gold bar, you will always have that gold bar or gold coin, irrespective of the fluctuations of fiat currencies.

While thinking of the value of physical gold in terms of a fiat currency might be convenient, a better way is to think of a gold holding in terms of weight.

23. Coins and Bars - Build a Collection

Buying investment gold bars and bullion gold coins allows you to build a diverse collection of bars and coins that are at the same time a fascinating pastime and a form of investment and saving.

Bullion gold coins from the world’s major mints are beautifully illustrated and often have a connection to history. Investment gold bars from the world's major gold refineries are distinctively different from each other and you can vary a collection by cast or minted bars, and a selection of weights.

24. Physical Gold Feels like Real Wealth

Physical gold feels like real wealth. When you hold ten 1 ounce gold coins in your hand, you intrinsically know that you are holding real wealth, gold that is scarce and that has been costly to produce.

25. Gold as Loan Collateral

Gold can be used as loan collateral. Since gold is highly liquid and valuable, it can be lent and used as a form of financing, and as a way of generating interest. The wholesale gold lending market between central banks and bullion banks is highly active. Likewise, retail gold holders can also in various ways lend their gold to receive financing or interest, with new innovations to do this arising all the time.

26. Central Banks hold Gold

Although the world’s central banks like to downplay the importance of gold because it competes with their fiat currencies, most central banks continue to hold substantial amounts of physical gold bars and gold coins in vaults around the world. They hold this gold as a reserve asset on their balance sheets, and they value this gold at market prices.

Like private gold investors, central banks hold physical gold because it is highly liquid, it lacks counterparty risk, and because gold is a safe haven or ‘war chest’ asset that acts as a financial insurance in times of crisis. Central banks also hold gold for the unpublished reason that if and when gold re-emerges at the centre of a new monetary system, these very same central banks will not be caught out having no gold.

27. Gold for Gifting

Gold coins and small gold bars make great gifts and presents, and gold is a traditional form of gifting in many societies around the world. Gifting a gold coin or small gold bar to mark a birth, or anniversary, or a wedding or other special occasion, is an ideal present that will be highly appreciated by the recipient.

28. Gold for Inheritance

Gold bars and gold coins are a great form of inheritance for your children and family members. Because gold is real, tangible, valuable, and has a highly liquid trading market, it is an ideal asset for inter-generational wealth transfers. Because physical gold is fabricated in convenient weight denominations, such as troy ounces and kilograms, it can be distributed equitably among recipients, and specified equitably in wills and trusts.

Bullion Banking 101 – Speech by BullionStar CEO, Torgny Persson

The following speech, by BullionStar CEO Torgny Persson, was given to an audience during a Precious Metals Seminar held at BullionStar's shop and showroom premises in Singapore on 19 October 2016.

BullionStars CEO Torgny Persson Precious Metals Seminar at BullionStarBullionstar shop during precious metals seminar Precious Metals Seminar at BullionStar

Introduction

What have I got here?

It’s 87 grams of gold.

As many of you know, we have our own bullion vault integrated in BullionStar's bullion centre here in Singapore. What if I told you that every day we sell 6 kgs (6000 grams of gold), meaning that we sell about 1500 kgs gold per year to customers storing with us, but that we actually only keep 87 grams of gold in storage as reserves.

You would call it fraud and have me arrested, right? I’m obviously running a Ponzi scheme with very small fractionalised reserves backing up huge trading of unallocated paper gold.

Now, for clarity, that's not how we conduct business. When you buy and store bullion with BullionStar, your bullion is fully allocated and you can withdraw your metals at any time by just walking into BullionStar's bullion centre. You don’t even have to notify us beforehand.

What I just explained to you is something else - it’s bullion banking per definition - more precisely it’s unallocated gold trading by bullion banks.

As most of you know, the London Bullion Market Association (LBMA) has held its annual Precious Metals Conference in Singapore over the last two days. The LBMA is at the core of the world’s bullion trading system, a system which generates extremely large trading volumes every trading day. To understand the gold market, one has to understand the LBMA system as it is of great significance to both the price of gold and also to the physical movements of gold around the world. I will therefore provide you with an introduction to bullion banking and this LBMA system, and talk about how bullion banking operates.

Bullion Banking - Unallocated Gold

Almost all gold traded in the LBMA system today is in the form of unallocated gold which is accounted for in unallocated accounts. The definition of an unallocated gold account, as we can read on the LMBA’s website, is that the holder of such an account with a LBMA bullion bank does not have any ownership interest in any specific gold bars.

Instead, the account holder is merely an unsecured creditor of the bullion bank and holds a claim on the bullion bank for an amount of gold. At the same time, the bullion bank has a liability to this customer for this same amount of gold. Therefore unallocated gold is essentially paper gold. It is gold that doesn’t exist in the physical realm.

The creation of unallocated gold is in fact very similar to how fiat currency is created in the fractional reserve banking system. The fractional reserve banking system provides a good gateway into understanding bullion banking.

How is Fiat Money Created Today?

Let’s quickly recap on how fiat money is created in the fractional reserve banking system.

Money is created out of thin air. When a bank extends a loan, the money is created out of thin air.

Let’s take an example:

1) Robert plan to buy a house for $1 million.

2) Robert goes to a bank and the bank takes a look at Robert and deems him credible. With today’s low lending standards, it is rather easy for Robert to secure a loan. The bank deposits $1 million into Robert's account.

3) Where does this $1 million come from? The answer is 'nowhere'. It doesn't come from anywhere. The money is created out of thin air when loaned out to Robert.

This is easy to understand but hard to believe for some people. But it is true that this money is created out of thin air and lent into existence. About 92% of our money today is lent into existence in this fashion.

Banks keep a very small amounts of money in reserve to cover withdrawals, but they face liabilities which are far larger in size that their reserves.

The term "loan" as used in banking has been corrupted and twisted by banks. When a bank extends a loan, there is nothing loaned. To loan something you need to be in possession of it first, but when banks make loans, there is no countervailing transaction - The money is just created when the loan is extended.

How is Paper Gold Created?

Now, what about gold? How is gold created? You might say gold can’t be created, it has to be mined, right? Yes, you would be correct, physical gold cannot be created, but gold as an investment product definitely can be created and is created on a massive scale.

When a bullion bank customer goes to the bank and requests to buy gold, the standard procedure is for the bullion bank to create unallocated paper gold and credit this paper gold to the customer’s account. This ’gold’ is simply created out of thin air as a book-keeping entry in the bank’s accounting system.

paper-gold

Similarly, if actual physical gold is deposited into an unallocated account operated by a bullion bank, this deposit of gold is also in fact very similar to a deposit of fiat money. Just as a bank keeps deposited fiat money on its own balance sheet, a bullion bank keeps deposited physical bullion on its own balance sheet.

Bullion banks don’t generally safeguard or segregate gold deposited with them or held by them unless they are specifically instructed to do so if a customer opens an allocated gold account.

This means that depositors of gold into bullion banks' unallocated accounts are no longer the legal owners of the gold that they have deposited. Instead, they are just one of the general creditors to the bank, and they merely hold a claim for gold against the bank.

By depositing gold into an unallocated account at a bullion bank, you therefore lose ownership of your gold in return for a mere claim on gold.

Trading in unallocated gold by the bullion banks is thus based on book-keeping entries denominated in gold. The gold is fractionally reserved. Gold is created out of thin air as book-keeping entries in the banks' ledger systems, and even gold that is deposited into an unallocated account becomes the property of the bank.

LBMA Unallocated Gold Trading Volumes

From the LBMA’s published clearing statistics, which is one of the only transactional statistics that the LBMA does publish, we know that 600 tonnes of gold are "cleared" in the London Gold Market each and every trading day. Cleared means that it’s 600 tonnes of gold that's transferred between participants after netting out all trades between all trading participants.

According to a LBMA gold trading survey conducted in 2011 (the last such survey), the ratio between trading turnover and clearing on the London Gold Market was about 10 to 1. This means that the total amount of gold traded in the LBMA system each day is about the equivalent of 6,000 tonnes!

In other words, almost twice as much gold is traded in the LBMA system in a single trading day than is physically mined globally during an entire year.

LBMA Unallocated Gold Trading Volumes

But what is backing this 6,000 tonnes of unallocated gold traded each day, or 1.5 million tonnes of gold traded each year?

Let’s take a look at the reserve side of bullion banking in the LBMA system.

Bullion Bank Gold Reserves

The LBMA bullion banks' outstanding gold liabilities, and the unallocated trading system in the London Gold Market are ultimately backed by a quantity of 400 oz Good Delivery gold bars.

However, bullion banks don’t really want to hold physical gold. They will buy it if someone forces it on them but bullion banks have no real need for physical gold and are therefore incentivised to keep as little gold as possible in reserve, and lend out the gold they hold in reserve so as not to incur storage fees and handling costs. Banking reserves are looked upon as a dead asset so the banks minimise these reserves and try to make them into live assets by loaning them out.

When a bullion bank receives a gold bar by buying or borrowing it, it either sells, leases or allocates that bar elsewhere.

This sets a bullion bank apart from any other bullion entity because a bullion bank can hold deposits of gold on its balance sheet as assets even if it no longer has, or never had, the actual physical gold in its possession.

How much backing is there for all the unallocated gold traded in the LBMA-system?

We don’t exactly know as there are no reserve figures published but we can make an educated guess.

Vaulted Gold in London

How much gold is actually vaulted in London? The LBMA recently said on its website that there was approximately 6,500 tonnes of gold stored in London, about three-quarters of which was at the Bank of England. The Bank of England recently revealed that it was custodian for 4,734 tonnes of gold in its vaults.

This would leave 1,766 tonnes of gold privately stored in the LBMA vaulting system outside the Bank of England.

BullionStar research recently calculated (30 September 2016) that ETF gold holdings held in London accounted for 1,679 tonnes. This would mean that there are only 1,766 - 1,679 = 87 tonnes of gold in the LBMA system which is not allocated to ETFs!

Therefore, nearly all of the LBMA reserves are allocated to the ETFs with only 87 tonnes of gold left to back up the vast amorphous of unallocated gold trading amounting to 6,000 tonnes per day or 1.5 million tonnes per year!

gold-vaulted-in-london

Chart layout inspired by GoldChartsrus /Nick Laird. Data gathered by Goldchartsrus/BullionStar's Ronan Manly

Physical gold in the LBMA bullion banking system is therefore like physical cash in the monetary system. It is rarely seen!

london-gold-etfs

Double-counted Reserves

LBMA is a banking system that by definition is based on fractional reserve banking.

HSBC, JP Morgan and ICBC Standard Bank are the only LBMA bank custodians with their own precious metals vaults in London. Most of the circa 42 LBMA bullion banks don’t even have their own gold vaults but still keep books denominated in gold ounces. A bullion bank without a gold vaults instead holds its gold reserves with a bullion bank that does have a gold vault.

For example, if Citibank keeps its reserves with a bank with a vault such as JP Morgan, then Citibank merely holds a gold claim for which JP Morgan has a gold liability. These unallocated gold reserves are therefore just pooled with the bullion banks that do have vaults.

The bullion banks without a vault never see or touch the metal they keep in reserves. If a bullion bank stores its gold reserves at another bullion bank’s vault, this means that the reserves are unallocated credits/claims which are standing behind the bank’s own liabilities. So even the reserves are fractionalised. So not only are bullion banks’ liabilities to their customers unallocated, even the reserves are unallocated inter-bank liabilities which are fractionalised.

Paper gold thus stands behind the liabilities of paper gold.

The LBMA system serves as a pool of reserves and uses coordinated reserve management where the different participating bullion banks can loan and lend to each other the few physical reserves that there are in the system so as to meet any demand for physical bullion.

Gold Bank Run

The bullion banks face massive liabilities in the form of unallocated gold credits. Bullion banks are thus, just like normal banks, susceptible to bank runs.

gold-fiat-comparison

The difference between bullion banks and normal commercial banks is that whereas central banks are the ultimate lenders of last resort to commercial banks, most central banks no longer back-stop bullion banks as the lender of last resort because most central banks no longer sell or lease bullion that can be used to prop up bullion banks' reserves.

In case of the LBMA, the central bank is replaced by a private company called London Precious Metal Clearing Limited (LPMCL) which is run by 5 clearing bullion banks and whose clearing system AURUM nets out all gold claims and liabilities in the LBMA system. The clearing system functions as a pooled system in that only net balances are cleared and the bullion banks' gold reserves are essentially pooled and can be leased and double counted whenever necessary.

When they no longer have any physical gold to deliver, the ultimate rescue plan for bullion banks is to use cash settlement instead.

In the same way that banks increasingly promote cashless solutions as a means to reduce cash handling costs, earn credit card fees, reduce the risk of bank runs and lock in customers, LBMA system bullion banks promote gold-less gold transacting.

Just as the banking system inherently incentivises reckless debt behavior, the bullion banking system inherently incentivises the reckless creation of paper gold assets.

LBMA – The Paper Gold Protector

In creating artificial paper gold, bullion banking protects the fiat money system.

If even a small minority of the paper gold traded today was backed up by physical gold, the price of gold would have skyrocketed. A gold price significantly higher than today would point towards the inferiority of the fiat money system, and possibly the collapse or implosion of the current monetary system.

bb-protecting-monetary-system

Bullion banks and gold industry organisations, such as the LBMA and the World Gold Council, which itself has developed and owns securitized gold products, can profit from gold trading volumes that are far higher than they would be if they were limited to the constraints imposed by the availability of physical gold to trade.

The bullion banks and the LBMA work hard to overcome the tangible limitations of physical gold mining. By promoting gold-less gold transacting, the LBMA unallocated system artificially increases the supply of gold, earning the banks higher fees from artificially large trading volumes.

To reiterate, the LBMA unallocated gold trading is a banking system based on fractional reserve banking which is all about exposure to the price of gold but not to gold itself.

The LBMA system is used to coordinate unallocated paper gold trading where ‘gold’ is created out of thin air, and the tiny physical reserves held are pooled and shared out among participants so as to minimise costly reserves and avoid gold bank runs.

When bullion banks need to allocate gold to the ETFs, such as to the SPDR Gold Trust (GLD) in London, they use credits from the same unallocated gold credit system as was previously used to offset other gold liabilities. Even though the ETF may own the gold outright, the gold is still being double counted within the system because its being allocated out of a bullion bank pooled systems of credits.

To summarize what the LBMA is all about, it is a paper gold protector for the bullion banks which allows the bullion banks to earn fees from an artificially high trade turnover while at the same time protecting the fiat currency system.

The Guarded Secret of no Gold

The fractionally-reserved bullion banking system is a fragile system. Many investors and savers holding paper gold believe that the gold they are holding is backed up by real physical gold. But if the bullion banking system implodes, which it will do if the high demand for real physical gold in Asia is sustained at anywhere near today’s levels, these holders of paper gold will at best end up holding paper claims which will be cash-settled, or at worst these paper gold holders will be empty-handed.

Demand for ETF’s and unallocated gold will likely not stress the system systemically since the pooled LBMA gold reserves are used for leasing and double counting. It is the demand for real physical gold, draining bank gold reserves, that stresses the system.

Many gold investors/savers buy various paper gold products as a means of protecting themselves against the fiat currency Ponzi scheme. It may therefore come as a surprise to some holders that these investments are no safer or even less safe than the fiat currency against from which they are seeking to protect themselves. Bullion banks give the impression that these investors into unallocated gold are actually holding gold, whereas in reality they are just unsecured creditors holding paper gold, gold that is created out of thin air, in a fractionally-reserved Ponzi scheme.

As long as everyone is happy to buy and sell ledger entries/book-keeping entries, this fragile system can continue to balance on a thin thread. The systemic problem arises when larger entities start to demand physical delivery, a trend which has been happening in the last few years, most notably in Asia and Russia. There is therefore an imminent risk of the bullion banking system collapsing in the next few years.

vault

This is an accident waiting to happen, because when enough holders of paper gold ask for delivery, the default that will follow will trigger the biggest bank run for gold in history, which due to gold’s significance as a monetary proxy, will shake the entire monetary system.

When there is no longer any physical metal to deliver, the ensuing shortage will result in a disconnect between prices, in which paper gold will become worthless while the price of real physical gold will be revalued at a much higher level based on the market equilibrium for physical supply and demand of gold.

Thank you!

BullionStar exhibiting at FreedomFest in Las Vegas

This week BullionStar is attending and exhibiting at a unique conference called FreedomFest in Las Vegas, Nevada. FreedomFest is the largest pro-liberty conference in the world and it has taken place annually in Las Vegas since 2002. The event was founded and is still organized by Mark Skousen. This year's FreedomFest event runs from Wednesday 13 July to Saturday July 16 at the Planet Hollywood Resort and Casino in Las Vegas, and is expected to attract a few thousand attendees.

FreedomFest is grounded in the Libertarian philosophy and the celebration of free thinking, and the event hosts a huge range of high-profile speakers as well as debates, panel discussions and a film festival. Attendees include representatives of free market think-tanks, those involved in the fields of politics and economics, the investment sector, the media, and the publishing industry. Themes celebrated in the conference include liberty, limited government, economic freedom and free market capitalism.

FreedomFest

Topics covered in FreedomFest range from economics, philosophy, technology, finance and investing, to law, geo-politics, art and literature, public policy, science and religion. In the run-up to FreedomFest, an associated event called the Atlas Summit has just wrapped up which focused on the Ayn Rand philosophy of Objectivism – the pursuit of happiness and productive achievement. The film festival integrated within FreedomFest is a libertarian film festival called Anthem Film Festival.

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FreedomFest reception area, Planet Hollywood, Las Vegas

The speaker list at FreedomFest this year is large and varied and includes such well-known names as Senator Rand Paul,  Steve Forbes, Judge Andrew Napolitano and George Foreman.

BullionStar's CEO, Torgny Persson, CEO of BullionStar will also be speaking at the FreedomFest conference on Thursday afternoon, 14 July, at 4:20pm local time on the topic of 'How Safe is your Gold?"

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Unpacking crates into the exhibition space at FreedomFest, Planet Hollywood

There is an extensive exhibition at FreedomFest and BullionStar is exhibiting from today Wednesday 14 July, to Saturday 16 July. Initial tasks for the BullionStar team last night and this morning involved setting up the display booth on the exhibition floor complete with display cases and audio-visual monitor equipment which had been shipped in for the event.

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Assembling the AV monitors and display stands

The BullionStar booth contains product displays and a unique and timely interactive game highlighting the perils of the quantitative easing currently being pursued by the world's largest central banks.

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Linking up the AV monitors as the layout of the booth takes shape

BullionStar will be providing regular updates during the FreedomFest conference via this blog, which will highlight interesting speakers, visitors to our booth, and any other topics which we find noteworthy from the conference. So please check back for updates. If you happen to be at the conference, please drop by the BullionStar exhibition booth to meet us, and to find out why Singapore is the best place in the world for storing precious metals. Likewise, if you are in the Las Vegas area, why not drop into the conference or exhibition area to meet us.

Gold Vault Profiles

Many topics in the world of gold are opaque and secretive, none more so than the famed gold vaults of the world’s major central banks and their bullion banking counterparts. BullionStar Gold University is now bringing transparency to this intriguing yet under-reported area by profiling the largest and most important of these gold vaults.

According to the vault owners and the information that they divulge, these gold vaults officially store over 16,500 tonnes of gold, which is approximately half of all reported central bank gold reserve holdings. That’s also nearly 10% of all the gold ever mined in the world. This in itself makes knowledge of these vaults important.

From the labyrinthine Bank of England gold vaults storing nearly 5,000 tonnes of gold in custody for over 70 central bank customers, to the Federal Reserve Bank of New York's subterranean gold vaults housing nearly 6,000 tonnes of gold on behalf of 36 foreign central banks and the US Treasury, this BullionStar series brings together information about these vaults that has never before been documented in one place.

Where are the vaults located? Who are their customers? What type of gold bars are stored there? How are the vaults laid out? When were they constructed? These are just some of the questions covered in BullionStar’s Gold Vault series. Only on rare occasions have reporters, camera crews or other observers been allowed to access these vaults and document their layouts and contents. We have included a media section in the profiles where possible to point you to these sources.

Witnessing such large quantities of gold bars stored in one single place seems to create a profound and similar impact on the observers regardless of which vault they have visited.

“I’m speechless when exploring the Sacristy, , … you don’t see this every day” - Alberto Angel, reporter RAI, Italy

It’s quite extraordinary” - Professor Martyn Poliakoff, visiting the Bank of England vaults

you never get sick of the gold… it even puts a smile on our faces when we’re down there working with it” - Fed Vault Custodian, New York

from a purely human perspective, we could see with our own eyes a quantity of precious metal that goes beyond an ordinary perception … I must say that it arouses feelings that are difficult to explain” -   Senator Giuseppe Vacciano, Italy

Why the observers have these powerful reactions to seeing such vast quantities of gold, we can’t say for sure, perhaps it’s because gold is money par excellence and the ultimate store of wealth, and that being close to this powerful and aesthetically pleasing element invokes a timeless sense of respect and wonder.

The BullionStar Gold University vault profiles series also covers the deep underground Banque de France gold vaults in Paris. Known as ‘La Souterraine’, home to over 90% of France’s 2,435 tonnes of gold, the Paris vaults also store gold bars on behalf of the Bundesbank and the International Monetary Fund. The series also visits the Banca d’Italia’s gold vaults, "La Sacrestia Oro", under the Banca d'Italia's Palazzo Koch headquarters in Rome which hold 1,200 tonnes, or approximately half of Italy’s gold.

BullionStar Gold University also profiles the commercial gold vaults backing the London Gold Market, the London gold clearing system and the London Bullion Market Association (LBMA) system. These vaults also house the gold behind the largest Gold ETFs in the world. Learn about JP Morgan’s gold vault deep underneath a JP Morgan Chase building off Fleet Street in the City of London, as well as the massive HSBC gold vault that at one stage stored over 1,300 tonnes of gold on behalf of the SPDR Gold Trust. Is this HSBC vault in the City of London between 2 former HSBC buildings, underneath a road leading to Southwark Bridge? London’s commercial vaults also include the Malca Amit gold vault storage facility adjacent to Heathrow Airport, and the G4S gold vault, built for Deutsche Bank but now said to be leased by Chinese bank ICBC Standard Bank, following Deutsche Bank's withdrawal from the London Gold Market.

A knowledge of where these central bank and commercial vaults are located and their operating details is also critical, since, if there was ever a physical gold shortage or a crisis in the gold market, these central bank and LBMA bullion bank institutions owe it to the global financial community to prove that they are storing the gold they claim to store, in the locations they profess to store it in.