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How the Gold Market works, what’s
changing and how to benefit
- Presented by Thomas Coughlin
Major Gold Markets
London - OTC Wholesale Market
• Spot, Forwards, Options & Swaps
• 90% Spot

COMEX - Exchange Traded Mar...
Loco London Gold Market
LBMA
London Bullion Market
Association
Trade Association

The Fix

LPMCL

BOE

London Gold Fixing
...
What’s Changing?
A Global Repatriation & Hoarding
Gresham's Law:

Total Gold Demand, 2009 Q1 and 2013 Q2.

"When a governm...
Global Repatriation
Hoarding

Partial Fungibility

London

EFP
Exchange Futures for Physical

Global
Repatriation

COMEX
The Wholesale Market - Present
Physical Flow of Gold

COMEX

LONDON
U.K. Gold Shipments Climb Eightfold as Metal
Seen Movi...
A Proposed New Global Marketplace
A Global Loco Trading Hub Market with a Unified Vaulting Network for Allocated Bullion

...
Wholesale Market Comparison
London Market

Global Market

London price

Global market connecting local physical markets

U...
What is Bullion Capital Doing?
Bullion Capital Limited (BCL) offers a loco trading hub physical bullion market, with an on...
Are we mucking around?
•
•
•
•

We’ve spent three years collaborating with industry specialists.
We’ve liaised and done bo...
BCL Australian Market Offering
1) A Private Client Service – Closing Soon!
2) Introducing Broker Service

Allocated Physic...
Opportunity – How to Benefit
•

Sign up as a client or Introducing Broker and Support us with our mission of implementing ...
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Gold 2013 Sydney - How the Gold Market Works, What's Changing and How to Benefit.

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Presentation at the 2013 Gold Investment Symposium in Sydney, 16-17 October 2013. Presentation given by Bullion Capital's Chief Executive Officer, Thomas Coughlin.

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Gold 2013 Sydney - How the Gold Market Works, What's Changing and How to Benefit.

  1. 1. How the Gold Market works, what’s changing and how to benefit - Presented by Thomas Coughlin
  2. 2. Major Gold Markets London - OTC Wholesale Market • Spot, Forwards, Options & Swaps • 90% Spot COMEX - Exchange Traded Market • Futures & Options
  3. 3. Loco London Gold Market LBMA London Bullion Market Association Trade Association The Fix LPMCL BOE London Gold Fixing London Precious Metal Clearing Limited Bank of England Benchmark Price Unallocated Clearing Allocated Clearing Price Set Twice Daily Vaulting Vaulting Six Members Central Bank Custodian Gold & Silver Good Delivery List Member List Five Members Arrange Conferences Market Makers Members Members 1. 2. 3. 4. 5. 6. 7. 8. 9. 1. 2. 3. 4. 5. 1. 2. 3. 4. 5. 6. ScotiaMocatta Barclays Bank Deutsche Bank HSBC Bank JP Morgan Chase Goldman Sachs Mitsui & Co Societe Generale UBS ScotiaMocatta Barclays Bank Deutsche Bank HSBC Bank Societe Generale ScotiaMocatta Barclays Bank Deutsche Bank HSBC Bank JP Morgan Chase UBS
  4. 4. What’s Changing? A Global Repatriation & Hoarding Gresham's Law: Total Gold Demand, 2009 Q1 and 2013 Q2. "When a government overvalues one type of money and undervalues another, the undervalued money will leave the country or disappear from circulation into hoards, while the overvalued money will flood into circulation." "Bad money drives out good". What is the “Bad Money”? Unallocated Paper Gold 35.06% 72.94% HOARDING!
  5. 5. Global Repatriation Hoarding Partial Fungibility London EFP Exchange Futures for Physical Global Repatriation COMEX
  6. 6. The Wholesale Market - Present Physical Flow of Gold COMEX LONDON U.K. Gold Shipments Climb Eightfold as Metal Seen Moving to Asia - Bloomberg UK gold exports surge tenfold this year - Financial Times Gold flows from Britain to Switzerland surge in H1-Macquarie - Reuters 797 tonnes exported from London in the first half of this year. An Estimated 10,000 tonnes total sits in London At this rate all gold will have disappeared from London vaults in just over 6 years!
  7. 7. A Proposed New Global Marketplace A Global Loco Trading Hub Market with a Unified Vaulting Network for Allocated Bullion Market Price •Global Price Flattened •Perfect arbitrage between hubs. Delivery Mechanisms: London Toronto Zurich One Global Market Dubai •Worldwide •COMEX •TOCOM •CGSE •SFE •DGCX •SMX New York Clearing Banks & Central Banks •Worldwide - all time zones •America •Europe •Asia •Africa •Middle East Sydney Singapore Hong Kong Refiners, Mints & Vaults •Worldwide •America •Europe •Asia •Africa •Middle East
  8. 8. Wholesale Market Comparison London Market Global Market London price Global market connecting local physical markets Unallocated True global price + True local prices + Flattened Global Price Effective unlimited supply - Part of fractional banking system Allocated – difficult to manipulate Investor holds counterparty risk against custodian Finite supply – placing upward pressure on gold prices Expensive transportation costs Investor holds legal title Only trading and clearing during London time Negligible counterparty risk Only wholesale lot sizes – Market not available to private investors Can store gold locally in home region Organically dying market Minimal transportation costs Organically evolving market - Presented by Thomas Coughlin
  9. 9. What is Bullion Capital Doing? Bullion Capital Limited (BCL) offers a loco trading hub physical bullion market, with an online trading platform for precious metal traders and investors. BCL – Similar to above proposal ABX – Same as the above proposal Australia Global Live! Soon! Affiliated Global OTC Wholesale Late 2014 – Early 2015
  10. 10. Are we mucking around? • • • • We’ve spent three years collaborating with industry specialists. We’ve liaised and done board room battle with over 500 bullion market participants from the top down. We’ve internally developed the unique systems, mechanics and technology to bring this market together. We’ve got brokers, dealers, platform providers and SMSF administrators already utilising the BCL platform. There is overwhelming support for this Global Market. ABX Advisory Committee Name Position William Purpura Managing Director, Great Lakes Global Limited and Chairman of COMEX, Boards of Governors Dale Zhu Deputy Head of Global Commodities, Bank of China International David Govett Head of Precious Metals, Marex Spectron Grant Williams Portfolio and Strategy Advisor, Vulpes Investment Management Paul Burton Consultant to Hinde Capital Ned Naylor-Leyland Investor Director and CSI, Cheviot Asset Management Limited Michael Hadley Managing Director, John Galt Trading Consultants Christopher Olson President and CEO, Treasure Island Coins Incorporated
  11. 11. BCL Australian Market Offering 1) A Private Client Service – Closing Soon! 2) Introducing Broker Service Allocated Physical Bullion Stored in Australian vaults, not a paper contract. Withdraw your bullion at any time. Retain complete ownership and control over your investment. Unimaginable Security Locally stored and insured by Armaguard, verified by Inspectorate, audited by BDO. Simply the most secure physical bullion investment solution. Cost Effective With prices provided by multiple market participants, avoid dealer spreads and benefit from MetalDesk's exchange based trading platform.
  12. 12. Opportunity – How to Benefit • Sign up as a client or Introducing Broker and Support us with our mission of implementing this revolutionary new allocated global bullion market and help pave the way of the future. • Should we collectively succeed, there will be an abandoning of the current archaic London paper system and a conversion to a highly efficient allocated system. • This will place enormous upward pressure on the gold price and all precious metal investors will benefit. • Further, simply enjoy all the other benefits BCL has to offer through highly efficient online exchange trading platform.

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