Several months ago I bought some gold through BV. In another forum the other day I read this.
"Before investing a large sum I did a due diligence check and had a concern. Essentially BV is its own micro-market so if the price started to collapse quickly on the open market you might not find buyers for your holding at an external market price. i.e. you'd lose. I raised this point with the CEO, Paul Tustain, on the phone in 2006 and then again in a professional trader's gold forum a few weeks ago. After one rather pathetic attempt at a reply he disappeared. The regulars on the gold thread were, shall we say, gobsmacked.
Before investing serious sums with BV you really need to know exactly how it works and don't just concentrate on that talk about vaults in London, Zurich and NY - that's gloss. What matters is how the trades are backed, funded, where does the liquidity come from, where does it appear in the balance sheet - where IS the balance sheet"
The person who wrote this does not seem that impressed with their daily audit. My question is does anybody else share these concerns?
Full Version: One For Goldfinger
I am also curious but to be honest this case scenario is very unlikely to happen (especially in the next 5 years)...
QUOTE (otters @ Oct 30 2007, 09:03 AM) 
Several months ago I bought some gold through BV. In another forum the other day I read this.
"Before investing a large sum I did a due diligence check and had a concern. Essentially BV is its own micro-market so if the price started to collapse quickly on the open market you might not find buyers for your holding at an external market price. i.e. you'd lose. I raised this point with the CEO, Paul Tustain, on the phone in 2006 and then again in a professional trader's gold forum a few weeks ago. After one rather pathetic attempt at a reply he disappeared. The regulars on the gold thread were, shall we say, gobsmacked.
Before investing serious sums with BV you really need to know exactly how it works and don't just concentrate on that talk about vaults in London, Zurich and NY - that's gloss. What matters is how the trades are backed, funded, where does the liquidity come from, where does it appear in the balance sheet - where IS the balance sheet"
The person who wrote this does not seem that impressed with their daily audit. My question is does anybody else share these concerns?
"Before investing a large sum I did a due diligence check and had a concern. Essentially BV is its own micro-market so if the price started to collapse quickly on the open market you might not find buyers for your holding at an external market price. i.e. you'd lose. I raised this point with the CEO, Paul Tustain, on the phone in 2006 and then again in a professional trader's gold forum a few weeks ago. After one rather pathetic attempt at a reply he disappeared. The regulars on the gold thread were, shall we say, gobsmacked.
Before investing serious sums with BV you really need to know exactly how it works and don't just concentrate on that talk about vaults in London, Zurich and NY - that's gloss. What matters is how the trades are backed, funded, where does the liquidity come from, where does it appear in the balance sheet - where IS the balance sheet"
The person who wrote this does not seem that impressed with their daily audit. My question is does anybody else share these concerns?
Do you have a link to this? many thanks.
QUOTE (hollogramme @ Oct 31 2007, 05:41 PM)
Do you have a link to this? many thanks.
I remember seeing a post or two by the BV guy in response to questions on the "really useful gold thread" on ADVFN a few weeks back. Might be worth trawling through the posts to find it, as it can be an interesting thread in it's own right anyway.
QUOTE (hollogramme @ Oct 31 2007, 03:41 PM)
Do you have a link to this? many thanks.
Sorry I don't it was a personal reply by someone who told me his thoughts on BV, and had posted those questions on a forum, but I don't know which one. Goldfinger does not seem to have a view on the matter, oooo thats odd, I wonder if!!!!
That is interesting. I suppose since you can't get delivery of the gold and sell it on the open market, it is a closed system.
I guess GoldMoney is a slightly more open system with it's GoldGrams.
Maybe the Perth Mint option is a better option. They will store the gold like BV, but you can also request delivery at any time.
As far as I know, BV is the only online trading system for allocated gold.
Steve
I guess GoldMoney is a slightly more open system with it's GoldGrams.
Maybe the Perth Mint option is a better option. They will store the gold like BV, but you can also request delivery at any time.
As far as I know, BV is the only online trading system for allocated gold.
Steve
OK, I've just been checking the FAQs, and found this, which I think answers the question:
http://www.bullionvault.com/help/index.jsp...FAQs_whyBV.html (under FAQs Operational)
So it could be expensive to do that if you hold a small amount of gold, but if you own bar type quantities, you could just ask for your bar(s) of gold.
IMO this prevents the BV market from collapsing too far below the world open market, as explained in the quote.
Steve
http://www.bullionvault.com/help/index.jsp...FAQs_whyBV.html (under FAQs Operational)
QUOTE
Might no-one be bidding a fair price for my gold when I want to sell?
This could happen. It's unlikely, because traders would usually fill the void by bidding so as to be able to sell at a profit to the next buyers.
But it could be a concern, so BullionVault also allows an alternate get-out which ensures this does not become a structural weakness in the BullionVault market. Under extremely controlled circumstances owners can opt to take physical delivery of gold from our vaults. This allows owners to sell their bullion elsewhere - which they would do if it turned out that prices elsewhere were consistently more attractive. Of course merely having the right tends to ensure that it is never required.
There are extra costs in withdrawing gold for selling elsewhere and they are punitive for small holdings (which are met by small bars held independently of the main stock). However withdrawal costs are not punitive for full 400 oz bars. This encourages bigger customers to bid for smaller amounts whenever the price drops below the level at which they can sell elsewhere. Again, in practice this entitlement prevents the situation arising where there are no worthwhile bids for gold on BullionVault.
This could happen. It's unlikely, because traders would usually fill the void by bidding so as to be able to sell at a profit to the next buyers.
But it could be a concern, so BullionVault also allows an alternate get-out which ensures this does not become a structural weakness in the BullionVault market. Under extremely controlled circumstances owners can opt to take physical delivery of gold from our vaults. This allows owners to sell their bullion elsewhere - which they would do if it turned out that prices elsewhere were consistently more attractive. Of course merely having the right tends to ensure that it is never required.
There are extra costs in withdrawing gold for selling elsewhere and they are punitive for small holdings (which are met by small bars held independently of the main stock). However withdrawal costs are not punitive for full 400 oz bars. This encourages bigger customers to bid for smaller amounts whenever the price drops below the level at which they can sell elsewhere. Again, in practice this entitlement prevents the situation arising where there are no worthwhile bids for gold on BullionVault.
So it could be expensive to do that if you hold a small amount of gold, but if you own bar type quantities, you could just ask for your bar(s) of gold.
IMO this prevents the BV market from collapsing too far below the world open market, as explained in the quote.
Steve
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