Potential conflict of interest statement - gold bullion
Although investments in precious metals are not regulated by the Central Bank of Ireland, at
GoldCore we believe that, in the spirit of treating our customers fairly, all precious metals
transactions should be subject to the same fiduciary standards as apply to regulated
products.
As dealers in precious metals and agents of the Perth Mint of Western Australia, GoldCore
Ltd has a potential conflict of interest when advising clients to purchase precious metals.
We therefore wish to disclose this conflict of interest and offer our clients a choice of
options from which to make an informed choice.
Perth Mint Certificates
We believe that the reason for holding gold in an investment portfolio is as a form of
financial insurance against the infrequent but highly damaging events such as we saw in
1929, 1987 and 2008. Since Gold has no liabilities and is not a financial instrument (such as
a stock or a bond) we believe that investors should hold physical gold rather than a
securitised form such as in an Exchange Trade Fund.
The reason for this is that one of the risks one is seeking to avoid in holding gold in the first
place is that of “counterparty risk” i.e. the risk that the institution holding your
investments fails. We therefore recommend the AAA rated Perth Mint which is owed by
the Western Australian Government.
A further benefit of Perth Mint certificates is that there are no annual charges and the
bullion is insured with Lloyds at the Perth Mint’s expense. Since gold pays no interest or
dividends, any annual fee will gradually reduce the size of a holding over time.
The “market” price of gold is derived from a 400 ounce bar of gold which at current prices
(April 2010) would cost around $460,000. Therefore, when smaller amounts are purchased
it is at a small premium above the “spot price”.
If you would like to discuss alternative options for purchasing physical bullion (such as bars
or coins or alternative storage options) please contact our bullion traders on 01 632 5010.