Who do gold refiners sell to?

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Golden Brown

New member
Joined
Mar 25, 2016
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2
Hello, I would like to start this thread by thanking all the people on this forums for being so helpful. Even though I have not posted on this forums before, I've been able to find answers to any questions I had with the use of the search function.

I'm in the process of setting up a refining operation which has the capacity of outputting several kilograms of pure gold a month. Of course I'm going to take it slow; I'll start with small amounts and I realize that I won't be getting 995 right off the bat, but several kilograms of bullion grade gold a month is what I'm aiming for. Now, my question is: who do I sell it to? Finding sellers of scrap jewelry was not a problem. I've done my market research and found out that not only does everybody and their mother buy scrap gold, but that most of the buyers are getting charged way too much by their refiners. I concluded that my refining setup will be profitable while still managing to undercut most big refineries in the area.
Finding buyers proved to be a lot harder. I wouldn't even know which businesses I should contact. Maybe I could broker a deal and sell to bigger refiners for something like 95%-98% of the spot price, but that seems more like a last resort to me, as I feel like I could get more for my gold bullions once I finally manage to get them to the purity I want. Or maybe I'm wrong and finding regular buyers who are willing to pay spot is out of the question, even if I do manage to get my bullions up to industry quality and have them properly assayed.

For clarification I'm not asking for trade secrets and I don't except refiners on this forum give up all their information about who they're selling to and for how much. I'm just asking for you guys to point me in the right direction.
 
If you can get your gold to 99.5% purity you should get a good price from someone like Metalor. Since you will have to sell your metal to continue on in business, your refiner will charge you a rate whether it is 995+ or 9999 so upgrading isn't cost effective. If you develop a market for fine gold and have customers who will pay spot or a few $ over spot then it is worth upgrading.

http://www.metalor.com/en/Contact-adresses/Netherlands/Metalor/Metalor-Technologies-UK-Ltd

They do have minimum lot fee's as well as minimum lot sizes, and if you take a cash advance you will pay interest from the time you take the advance to the time your job settles (3 to 5 days) This allows them time to re-melt and assay your material. I do not know if you are close to this facility or not but you should read in the library how to witness a melt at a refinery and do it if possible.

As your business grows you can build up an inventory of gold in a pool account and you can fix prices daily based on your purchases if you have concerns about fluctuating prices.
 
I'd like to apologize for the poor choice of name. I've made a new account and won't be using my old one again.

Thank you for your answer, 4metals. I'll certainly check Metalor out. They seem like a very legitimate company and I'm sure they'll compensate me fairly. Their plant is only a 20 minute drive away so I'll be sure to witness the melt, if I ever decide to sell to them. However, I can't help but see refineries like Metalor as middlemen, who would buy my refined gold, put their own stamp on it and sell it. I'm wondering about the viability and the advantages of dealing with their clients directly, effectively cutting out the middleman. Then again I might be wrong and it could be so that their stamp and a minor difference in purity(0.4%) is worth way more than I could possibly imagine.
 
I don't think you can get a prime by selling pure metals to any of these big companies out there.

The big boys are the ones charging a prime to sell bullions of physical metals.

The only way (in my very humble experience), to get a prime, is to sell to the end user of the physical metal that needs a pure feedstock.

jewlers that are making their alloys are probably the very best bet

companies producing electronics or companies making plating bath solutions for instance will never take a chance with your product, even if it's really pure. They can't afford to ruin a production to save 1/4 % on the prime. They prefer to play safe, get a certified feed stock.

But you can always try to sell to a big player like Johnson Matthey, they want your material, no doubt . I don't believe they pay a prime. And if they say they do, like all the others, they will downgrade your product.

http://www.jmrefining.com/

I would be curious to buy one of their bars, flatten it, re-punch it with my logo and serial, and sell it back to them. My guess is that the assay will not run .9999

Ask yourself also if it's worth the effort to refine. Buy / Sell and make your margin without processing the metal is already hard.

edit : Ho my god, I feel terrible linking their website, I despite those companies...
 
Metalor is a prime refiner, they sell to major banks all over the world. So will they re-sell your gold? Sure, but is anyone going to buy gold and never sell it? They make their money from banking (advancing and charging interest) and refining fee's. If you can consistently produce a product that is as pure or better than what they achieve with the Miller Process, then your refined gold will fit into their flow and be upgraded to 4 or 5 nines. That will get you the best rate.

You can also just melt and assay gold from jewelers and gold buyers and weekly go the 20 minute drive to rep your material. If you bring them karat, the rate will be higher but not crazy high. With your proximity to a quality house and an ability to melt and assay yourself you can carve out a nice niche for yourself.

Then again I might be wrong and it could be so that their stamp and a minor difference in purity(0.4%) is worth way more than I could possibly imagine.

Metalor, Johnson Matthey, PAMP and a good number of other big players (actually the biggest players) have name recognition. An investor looking for a coin or a kilo bar will take their hallmark over an unknown refiners every time. And for that they get a premium.

I would be curious to buy one of their bars, flatten it, re-punch it with my logo and serial, and sell it back to them. My guess is that the assay will not run .9999

I would bet their assay would run .9999 but they would still buy at a discount. Even if they bought it at the fix on the day of the sale you still lost money because when you bought their bar you paid a hefty premium which you don't get back when you sell.

Golden, There are a few good threads you should read in the library to help you through the process.

I know you have been here since August, but welcome to the forum.
 
Hi Golden, I moved your first post to your new user name.

Welcome to the forum! 8)

Göran
 
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