precious commodities - International Precious Metals Institute

Transcription

SPECIAL ADVERTISING SECTION
VIENNA PHILHARMONIC PURE GOLD BULLION COIN
THE SILVER JUBILEE OF
A GOLDEN GREAT
precious commodities

Gold, silver, and other metals have had their ups and downs
the last few years. But with investors looking for alternatives to stocks,
the future could be bright.
In Partnership
With
It’s been a wild few years for U.S. stock market, starting with the nosedive it
took during the global financial crisis in 2008, then breaking through to new
highs in 2013 and 2014. While Wall Street attention has been focused on
these ups and downs—investors typically hold more stock in their portfolios than anything else—there’s another asset class, once loved and largely
forgotten, that investors may want to examine: precious metals. ��
It is 25 years since the Vienna Philharmonic pure gold bullion coin began gracing investment portfolios the
world over. This may be a drop in the ocean compared to the more than 800 years that the Austrian Mint has
been making coins, but in that time the Vienna Philharmonic has been declared the world’s bestselling investment
coin four times by the World Gold Council.
AUSTRIAN MINT – INVEST. COLLECT. GIVE.
Available from all fine bullion dealers worldwide in the five sizes favoured by investors.
Or call toll free: Monex Precious Metals 1-800-998-9764
www.fortune.com/adsections
www.austrian-mint.at
www.monex.com
ADVERTISEMENT
Precious Metals for
Your Portfolio
Gold and silver prices have dipped. This could be a good time to stock up.

Coin creation: Molten metal
gets poured into a mold of a soon-tobe gold bar.
I
n the recession’s aftermath, precious metal
investing was the rage. Gold reached an all-time high of
$1,800 an ounce, silver peaked at $46 an ounce, and
even platinum and palladium—metals mainly used for
industrial purposes—reached $1,900 and $800 an ounce,
respectively. The jumps were a result of investors looking
for something other than stocks. Precious metals tend to
be viewed as stores of wealth, so they typically do well during periods of volatility and economic uncertainty. As the
global economy rebounded, the value of most of these
commodities declined. The price of gold, the most
popular precious metal, is down 36% since it peaked
in August 2011. This, however, doesn’t mean investors
should abandon ship. Just the opposite: Many experts
are convinced that gold and silver, the two metals investors typically focus on, will rise again.
The same goes for platinum, palladium, and rhodium,
three metals that are critical materials for industrial production.
Businesses that use these materials may want to stock up, now
that costs are low. According to Statista, a website that assembles
forecasting data from a variety of sources, all five main precious
metals are likely to see price increases between now and 2017.
Loading Up on Coins
It’s no surprise, then, that many investors around the world are
loading up on gold and silver bullion. In 2013, the Royal Canadian Mint, a federal Crown Corporation that produces coins for
Canadian circulation, collectors, bullion investors, and coinage
for other countries, had record volume and near-record sales of
silver and gold bullion coins. “Despite the lower precious metal
prices, there’s a good chance for new records in silver coin sales
this year, and gold sales have strengthened significantly in recent
months,” says Chris Carkner, the Mint’s managing director of
sales for bullion, refinery, and exchange-traded products.
“It’s the same trend as last year. When prices of gold
and silver drop, demand for bullion coins spikes.”
Since 1979, the Ottawa-based mint has been
manufacturing and selling a variety of precious metals
products. Investors around the world buy its flagship
offerings, the popular Gold and Silver Maple Leaf bullion
coins. Last year, Gold Maple Leaf (GML) sales climbed by nearly
48%, to 1.14 million ounces, while its Silver Maple Leaf coins saw
sales rise by 55.8%, to about 28 million ounces.
Investors like the Royal Canadian Mint’s coins due to its
iconic Maple Leaf design, highest purity, and advanced security
It’s been a challenging time for gold investors.
Since Oct. 1, 2012, the yellow metal has fallen by about 35%,
from $1,787 an ounce to $1,162. The price has dropped, in
part, because America’s fortunes are back on track.
Gold has always been a wealth-preservation tool. People
tend to buy when they’re worried about the global economy
and sell when things improve. Now, with U.S. stock markets at
peak levels and the U.S. GDP accelerating again, there’s less
reason for people to stash their cash in gold.
But that’s only part of the story, says Bob
Belandis, a partner in Silver Gold Bull, a
Calgary-based company that deals in
gold, silver, coins, diamonds, and
other collectibles. Historically,
when the stock market tumbles,
gold prices rise. That was
evident during the recession.
Between October 2007 and
March 2009—the market’s
peak and trough—the Standard & Poor’s 500-stock index average fell by 55%. Over
the same period, gold rose
by about 22%. “Metals offer a
hedge from bonds and equities,”
says Belandis. “They have a negative correlation to traditional investments and have a moderating effect.”
As stocks have rebounded, gold and silver prices have fallen. There are still systemic risks
in the economy, however, and many experts are predicting a
correction in stock prices. Whatever lies ahead, Belandis believes that prudent investors should consider putting between
10% and 30% of their assets in precious metals. “It’s about
having a well-balanced portfolio that includes stocks, bonds,
and precious metals,” he says.
Owning the metal itself, rather than a gold or silver
exchange-traded fund, is still the preferred option for serious
precious metals investors. With a physical product, the owner
will always be able to get his hands on it, even if it’s kept in a
storage facility.
For Americans who want to own gold and silver—precious
metals can be held in an IRA or a 401(k) retirement plan—Silver Gold Bull offers up-to-the-minute pricing and a variety of
ways to enter the market. The company sells gold and silver
coins and bars at varying weights and prices. It also
deals in gold jewelry and other collectibles. And it
is staffed by seasoned traders who are happy
to share their thinking and expertise with
customers and clients.
People who want to take physical
possession of their precious metals will
get their packages delivered by one of
the major shipping companies. It can
also be deposited with Silver Gold Bull
at any of its storage facilities in New
York, Canada, or Singapore.
Whether the recovery continues
or not, many are convinced
that precious metals are
an important part of a
portfolio. “These assets have remained
highly sought after
for 5,000 years.”
says Belandis.
“Currencies have
failed and large
companies have
gone bankrupt, but
precious metals store
their value and hold it.”
WE LOOK FORWARD TO CONNECTING WITH YOU • CALL (877) 646 5303
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VISIT SILVERGOLDBULL.COM/FORTUNE • WRITE [email protected]
features, says Carkner. Many bullion products on the market are
.999 pure; Maple Leaf coins were the first to reach the .9999
purity level and continue to maintain this heightened standard.
The coins are sold through a global network of bullion dealers
who will also purchase the coins back if buyers are looking to sell.
The Maple Leaf coins are very competitively priced due to the fact
that the Mint keeps costs low through efficient distribution and a
fully integrated refining and minting operation.
Carkner is not surprised that the Mint’s investor-focused
products have fared well, even as precious-metals prices have
fallen. Many people continue to seek alternative investments,
and they want to have something tangible they can hold
on to for decades and even pass down to the next
generation. The Mint’s gold and silver bars, wafers,
collectible coins, and non–Maple Leaf bullion offerings
have been selling at a healthy clip, as have the Mint’s
newly launched Maplegram25 product, which packages
25 individually serialized one-gram GML coins in a credit
card format. Two Toronto Stock Exchange Traded Receipts—in
gold and silver, which investors can currently buy from the mint’s
Ottawa vaults for less than the spot price—are also gaining
steam with investors.
There are several ways for investors to get into the preciousmetals market. For starters, they can buy bars, exchange-traded
funds, jewelry, and other bullion-related items, although coins
tend to be the preferred product for a variety of reasons, the
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Large volumes of gold and silver aren't going to come in the mail. Buy
enough and Brink's Global Services will deliver it to your door.
most important being that they are readily available. Mints, bullion dealers, and jewelry shops all sell coins. Many pieces have
sophisticated designs, which adds to the allure of ownership.
One of the more popular coins on the market is the Austrian
Mint’s Vienna Philharmonic gold coin, which was created in
1989 and is celebrating its 25th anniversary this year. The coin
is popular around the world because of its high quality—.9999
purity—and people like what it stands for. The coin, which
depicts several musical instruments on one side and the
organ from the Musikverein’s Golden Hall on the other,
represents the country’s movement toward peace, says
Gerhard Starsich, the Austrian Mint’s CEO.
It also speaks to democracy. The Vienna Philharmonic Orchestra, founded 172 years ago, was the first
orchestra formed by an association of musicians rather
than employees of dukes and emperors. “It was a tough democratic statement to make back then,” says Starsich. “The coin was
created because we wanted to make a statement about freedom.”
As special as the coin is, it’s not the only product offered by
the Austrian Mint, a semiprivate company that produces coins
used in Austria and other nations. It also sells silver coins, gold
and silver bars, and collectible coins, including a 25-euro silver
coin that incorporates a rare earth metal, pure niobium, which,
ALL BULLION IS NOT
CREATED EQUAL.
Unique, cutting-edge security features.
99.99% purity. The freedom to buy and
sell anytime, anywhere in the world.
Choose the bullion coin that’s been a
worldwide investor favourite for decades.
Purchase 2015 Gold and Silver Maple Leaf
from your bullion dealer today.
Visit the Royal Canadian Mint at
www.mint.ca/bullion
© 2014 Royal Canadian Mint. All rights reserved.
World’s
FASTEST-GROWING
processor
PGM
when oxidized, converts the metal’s
surface into a range of colors. The mint’s
niobium coins come in pink, blue, green,
and other colors. “The oxidization process
is what changes the color,” Starsich says.
“It’s a tricky process, and we’re proud
that we’ve been able to do this.”
While these assets are attractive
to look at, when all is said and done,
investors buy gold and silver because
it’s a good long-term investment. Precious metals continue to sell well, even
in a lower-price environment, because
they have always had value, says Bob
Belandis, a partner with Silver Gold Bull,
a Calgary-based online bullion dealer.
Gold has been around for millennia, it
has been used for buying goods, and it
has kept up with inflation. Stocks and
other currencies have come and gone,
he says, but gold and silver have always
stuck around.
By Low, Sell High
Because of gold’s long-term investment
record, many investors are taking advan-
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1-800-5-BRINKS

For companies that are looking to smelt
themselves, consider buying a DC furnace like this
one from Swedish smelter Arc Metal.
tage of today’s low prices. Silver Gold Bull,
which handles coins from mints around
the world, has never been busier. “We’re
selling more every day,” Belandis says.
“People think that because prices are
down that no one’s buying, but that’s not
the case. It’s like any type of investment—
buy low, sell high.”
Silver Gold Bull, which has a robust
web presence, sells its goods—coins,
bars, wafers, collectible coins, and
more—to tens of thousands of buyers
around the world. Much of its product is
sold to American clients, who either take
home delivery, store their purchase in one
of Silver Gold Bull’s secure global storage
facilities, or invest it in their self-directed
IRA. In recent years, there has been a
strong trend toward diversifying IRAs with
physical precious metals.
Anyone who buys gold or silver
through Silver Gold Bull and wants to take
possession of the purchase gets their
precious metals shipped by a secure
logistics provider such as Brink’s Global
Services. Other precious-metals companies also use Brink’s, which is known
for being the global leader in supplying
secure logistics solutions for sensitive
and valuable goods.
Brink’s, which has been in business
for more than 150 years and operates in
more than 122 countries, uses state-ofthe-art technology and infrastructure to
ensure that valuable packages get
where they’re supposed to go.
“Our people are dedicated to
protecting and enhancing both
our name and our customers’
through a continuous commitment to safety, security, and
reliability,” says Amit Zukerman,
president of Brink’s Global Services. “We
work in partnership with customers to ensure the personalized solutions they need
to continue to protect, grow, and enhance
their brand.”
Although most investors are focused

Gold comes in all shapes and sizes,
including in nugget form. This is what the yellow
metal looks like after it's pulled from the ground.
on gold and silver, some companies,
including Silver Gold Bull, also deal in
platinum, palladium, and rhodium-related
products. Called platinum group metals
(PGM), the three are primarily used in
industrial production, though sophisticated investors may include these assets
in their portfolios, too.
The main industrial use for PGMs
is in automotive catalytic converters. The mix of platinum, palladium, and rhodium converts
more than 90% of the hydrocarbons, carbon monoxide,
and nitrogen oxides produced
during the combustion of gasoline
into more environmentally friendly elements. PGMs are also used in jewelry,
watches, silicones, and electronics,
among other products; they’re critical in
catalysts used to make gasoline, jet fuel,
and other petrochemical products; and
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Regardless of why people purchase precious metals—
whether for investment purposes, industrial use, or other reasons—
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(Left) Panhandle Converter
Recycling's staff is working
hard to find out just how much
precious metal is in a catalyst
converter. (Top) A lab technician
holds a homogenized automotive
catalysts—samples will soon be
taken for PGM analysis.
PGM alloys are necessary to effectively
manufacture nitric acid.
PGMs have been used for many years,
and demand should increase, says JP
Rosso, president of the International Precious Metals Institute (IPMI), a 39-yearold nonprofit charitable association of
precious-metals producers, refiners,
fabricators, scientists, manufacturers,
and others from around the world that is
based in Pensacola, Fla. One of the big
users of PGMs is China, where demand
for cars—and catalytic converters—is
exploding. SinoMarketInsight, a Beijingbased research firm, expects demand
for automotive catalytic convertors in the
country to rise by 30% between now
and 2017.
China’s citizens are buying more than
just cars, notes Rosso—they also want
television sets, cellphones, computers,
and other items that use platinum, palladium, and rhodium. “Even with their
recent economic slowdown, there’s still
high demand for virtually every consumer
item in China,” he says, “which is a con-
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tributing reason prices of platinum group
metals haven’t dropped as much as
gold and silver.”
While mining operations are trying to
get more of the commodities out of the
ground to meet demand, many mines
have already been exhausted, says Rosso.
Companies in South Africa, home to some
of the largest PGM deposits, are finding lower and lower grades of ore, while
production costs are increasing. In July,
the country’s mining production dropped
7.7% year over year, the largest negative
growth rate seen in recent years.
Because these metals are difficult
to mine, businesses that help recycle
precious metals have sprung up. One of
the leaders in this space is Panhandle
Converter Recycling, based in Dothan,
Ala. It receives catalytic convertors from
junkyards, auto shops, and other places,
then sells the precious metals in the
devices back to refiners.
Unlike other recycling companies, Panhandle Converter has developed a process
to test exactly how much of each metal
is in each converter it receives. Typically, precious metals in
these auto parts are fused together, making it nearly impossible
to know how much of each is in every converter. That has led to
mispricing in the industry, says Lyle Peluso Jr., Panhandle Converter Recycling’s president. But because of his company’s
technology, end users get the right price. “There wasn’t
any transparency whatsoever before,” he says. “We felt
this was a great opportunity, and we’ve been right.”
An increase in PGM demand is also making end
users think more about refining and smelting these
metals themselves. Usually, companies hire a business
like Sweden’s Arc Metal AB to smelt the PGM. It’s then
used to create new catalytic converters or other products. Over
the last 12 months, though, Arc Metal, which uses furnaces
to extract precious metals from ceramic materials, such as
catalytic converters, has begun selling its direct current smelting furnaces to companies that want to do the work themselves.
Arc Metal’s process significantly upgrades the value of the
material—often as much as 200 times. “The furnace separates
ceramic elements—things like silica, magnesium, and aluminum
oxide—from iron, nickel, copper, and the platinum group metals—which is what we’re looking for,” says Pär Rosendahl,
Arc Metal’s managing director.
Regardless of why people purchase precious metals—whether for investment purposes, industrial use,
or other reasons—the future for this particular group
of commodities looks bright. These metals have been
around for centuries, and it’s not likely they are about to
disappear. “Human growth and advancement in economies
around the world will drive demand, especially for the platinum
group metals,” says IPMI president Rosso. “Gold and silver are
the oldest precious metals in the world and are universally recognized as monetary units. Their prices may rise and fall,
but they’ll also always be in demand.” ●
The International Precious Metals Institute (IPMI) is the world’s largest
INTERNATIONAL PREC
global organization solely focused on precious metals. If it’s ‘precious
metals’, we have it.
International
Precious
Metals
Institute
[IPMI]
For membership information,
visit our website: www.ipmi.org
5101 North 12th Ave., Suite C
Pensacola, FL 32504
phone 850.476.1156
fax 850.476.1548
email [email protected]
Individuals, miners, refiners, fabricators, commodities brokerages,
bankers, financiers, consumers, industrial companies, universities,
students, and more, are all members of the IPMI.
IPMI offers its members a full range of benefits, including:
A variety of Technical & Educational seminars each year
Precious Metals News
Environmental & Regulatory Rules Update
And more
IPMI also has specialized internal committees that provide focused
information on specialized topics
The Environmental & Regulatory Affairs Council (ERAC)
The Analytical Council
The Petroleum Refiners Council
The Security Council
IPMI