Trading Physical Precious Metal: Brokerage perspective

Ali HararwalaBusiness Transformation Consultant

Slide 2

Agenda

Objective & Introduction Trivia Stats: Top 10 Countries Players Products Services Proposition How does it work Precious Metal: Performance

Chart Refining Process Questions

Slide 3

Objective & Introduction

To present and discuss the eco-system in which precious metals are transacted online as a preserve of wealth.

Gold Tree Infographic

Session Objective

Introduction to Precious metals: A major asset class

Why invest in precious metals? Avoid counterparty risk Hold wealth outside of the banking system Own the underlying asset not a security or

promise Take delivery if you require

Why one shouldn’t? Lack of yield/return Price volatility

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Trivia

What is the standard measure of metal in the market? …..What is the total amount of gold mined in history of mankind? ...What is the total identified reserves of gold? …What countries have the highest gold reserves? …What countries are the highest consumer of gold? …What countries are the highest producer of gold? …When was the gold standard abolished (US/UK)? …

“A total of 174,100 tonnes of gold have been mined in human

history, as of 2012. This is roughly equivalent to 5.6 billion troy ounces or, in terms of volume, about 9261 m3, or a cube 21.0 m on a side. The world consumption of new gold produced is

about 50% in jewellery, 40% in investments, and 10% in industry.”

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Stats: Top 10 Countries

Highest Gold Reserves**World Gold Council - Jan

2014**Foreign reserves

Gold Production (2012)

Gold Consumption (2012)

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Players

Online Brokers

Bullion Bank

Inspection and Audit Agencies

Corporate & Financial

Institutions

Logistics Partner

Miners & Refiners

Vaults

International Trade Assoc.

Individual Customers

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Products

• Allocated metal does not show up on the balance sheet of the brokerage or the vault operator. It is an off balance sheet item, which is the property of its customers.

Allocated/Un-Allocated

Metal

• Good Delivery Bars (LBMA, LPPM etc.)• Non-Good Delivery Bars

Large Bars

• Typically anything that weights less than GDB (100g, 1kg etc.)

Small Bars

• Typically melted and fabricated from Large/Small Bars

Coins

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Services

Buy/Sell

Storage

Metal-to-Metal Exchange

Private Vaults

Bar Registration

Collection & Delivery

Inspection

Multi-CCY and Multi-Bank a/c

Savings & Pension Plans

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Proposition

Slide 10

How does it work

Register Deposit

Buy, Sell,

Exchange

Storage,

Delivery

Audit Monitor

Online registration

that includes KYC and

AML procedures

Deposit funds in multiple

CCYs

Select a market, service, product, rate and quantity

when trading

Review periodic

audit and inspection

reports

Various tools to monitor

investment

Slide 11

Bullion Performance

GOLD

SILVER

Slide 12

Refining Process

Slide 13

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MiningRefiners, Smelters etc.

Banks, Brokers, Jewellers, Consumers etc.

Slide 14

Questions

Thank You