whats the monetary purpose for refinery

[Anonymous]

i've been trying to think of a way to make some extra money and i stumbled upon your forum. it really is a wealth of information and i am extremely pleased i found it.

my gameplan is to buy scrap gold, and sell it to a refinery. although, is there any benefit to doing the refinery myself? i'm guessing that there is, since it seems like most of you do...

 

[Harold_V]

is there any benefit to doing the refinery myself? i'm guessing that there is, since it seems like most of you do...

Unless you become recognized as a refiner, and have a reasonable field of customers that buy and use gold, the chances of selling it for spot or better is not good. I achieved that goal and treated both buyer and seller fairly by making all transactions at spot price at the moment of sale (speaking of refined gold).

Buyers must be secure in you and your quality before you can expect a scenario similar to that which I described. Impure gold can be the source of considerable trouble for some industries. Without credentials, which you are sure to not have, you'll pretty much have to settle for less than spot. Unless you enjoy refining, if you can make the right connections, you can probably make more money just buying and selling, forgoing any thoughts of refining.

Let me give you something to ponder.

I started in gold back in '72, and was actually refining by '74. I watched, in total dismay, when gold hit $875/oz in Hong Kong in 1980, then watched with equal dismay as it lost value in excess of $100 daily, until it bottomed out at less than $300/oz, where it languished for a long time. Once that happened, the gold market, for all practical purposes, ceased to exist on the level of the novice. No one was interested in buying gold, nor selling. Were it not for my customers, who were all consumers of gold (manufacturing jewelers), I would have had nothing to refine. You will have nothing to buy.

My point is, what you strive to create can die instantly. You also are subject to getting a screw job of a life-time, assuming you know no more about gold and gold alloys than the average guy does. You're going to encounter crooks that are well informed and polished, who will know every button to push to get your attention (and your money). Venture into this only if you are prepared to pay for the much needed education you will receive.

Harold

 

[nickvc]

Im with you on this Harold,my business was like yours in that i supplied the manufacturing jewellers here in the uk but that customer base is all but gone, most jewellery now coming from China Thailand India and other low cost economies.My advice would be learn to melt and take good assay samples and try to arrive at a position where any gold purchased can be sold on the same fix by having gold held at the refinery to sell as needed,however much money you can make it can be lost very quickly if gold ever bombs again.

 

[Oz]

I agree about economic business models changing that can put one out of business, especially the little guy.

As to taking a loss due to a sudden price drop there are a few approaches. If you refine on a percentage you pay out at completion of refining in cash or metal, no price risk for you. If you buy scrap up front you do have price risk for the length of time it takes you to refine the purchased material. Most businesses carry an inventory and refining need not be different. As one learns the trade set some of your “profits” aside as metals instead of cash (in todays world it is a good idea to be a little diversified like this anyway). About the time you are proficient in refining you should have a nice little nest egg of PMs on hand as a working inventory. When you buy scrap outright you can offer to pay in .9995 fine grain or cash. If they wish cash just sell the appropriate amount of metal from your working inventory at the same time. Your inventory is replenished once you have refined the lot without price change exposure. A buy and a sell on the same day at the same spot price, minus your spread of course as a refining fee.

All the same, I would heed Harold's words with great weight, it can be a brutal world in business even in the best of economies.

 

[butcher]

Bolton, trash to treasure, recovering metals from trash takes time, study and at first cost me, once learned I could start making a lil gold from the barnfull of electronic scrap saved over the years, it is a fun hobby for me, and a way for me to learn another very interesting subject, recovery of metals refining and chemistry, and as a plus I have this forum with some great people to learn from and discuss what we learn. if you have a strong interest in most anything and stick with it you will always profit, if not in money always, but money isn't everything. but man holding that shiny gold you worked so hard for now you can't beat that with a stick.

 

[Anonymous]

The reason I am interested in getting in this business is because of history. I believe that regardless of what happens with the economy, having ounces of gold is the most secure way of attaining wealth available. I'm young and I wouldn't mind stashing a few bars somewhere and waiting for conditions to improve.

I am only looking for a way to generate the startup funds to start hoarding in all honesty. I am extremely interested in learning everything there is to know about gold and how to refine it, but I realize I can't do that instantly, and would be thrilled to make some money while I do so.

So I guess ill sit back and read the thousands of posts that are already on here, thanks so much for your advice and I hope to be here for some time.

 

[plamenppp]

The spot price of the gold can be very tricky. The price can go up and down very fastly. If the price is low, you'll have to buy the scrap for cheap. If the scrap is cheap noone will collect it and sell it - the profit will not be high enough. If you take that risk you may win or lose. This is the risk about all the producers of everything. Taking the risk is dangerous - the market can crash suddenly. What will happen if The Russian Federation increases the PM production. I heard rummors a month ago about increasing the production of Pt and Pd. I'm pretty sure the planet is running out of gold but there is still plenty enough in jewels. The price can be regulated by the governments, too. If the price is high - there is demand. The price will stay high untill the demand is over. When the demand is over - the price will "normalize" again. When will the price go down? No one can tell you! I do it because of the fun and the skill. Along with the Au comes the Ag, Pd, Pt, Rd and many others. Never do it only for the money. There were pictures in the net showing how the gold comes out from the ground - dirty job. Not to mention the chemicals and human exploitation. Do it for the environment! Do it for the next generations! Do it for passion! Never do it only for the money!

Bulgarian loterry slogan: "The one who plays - wins and the one who does not play - does not win."

P.S. It is 23:58 now and I had an exam earlier today. I appologize for the spelling mistakes (if any) and the scatterd thoughts.

 

[Chumbawamba]

It helps to know the things that have historically affected the gold price before we get into wild speculation as to whether or not gold is going to suddenly fall in price at some point in the near or long term future.

The reason gold collapsed in 1980 is because Paul Volcker, then the Federal Reserve Chairman, did the right thing to do and raise interest rates overnight to near 20%. This made investment in the dollar attractive again and so investors--having plowed increasingly into gold as a safe haven due to severe economic weakness and fears of a dollar collapse--dumped their gold and put their money back into US Treasuries and stocks. We then embarked on a 30 year secular bull market in stocks and bonds. Now that that bull market has had its blow off top, just like the secular gold bull market of the 1970s had its blow-off top in 1980, we are embarking on a new secular bull market in precious metals.

But this time it's deeper than that. We are entering into an epic collision of history where new paradigms are being foisted onto the world. The shift towards gold and silver and other precious metals is a shift towards hard currency, hard money. Investors and savers are increasingly looking towards precious metals as a safe place to store their wealth until the mighty powers of the Earth battle it out and a new order emerges.

So this is a long term cycle, and if you're smart you'll be holding onto your metals for a long time. It will become increasingly apparent over time, but if you're holding on to large swaths of dollars (whether in the form of actual paper cash or digits in a bank account) you are going to experience very painful devaluations of those holdings. In fact, any cash you don't put into metals is losing money right now.

Gold and silver are honest money.

 

[goldsilverpro]

Gold collapsed in 1980 because silver collapsed and, for the only time in remembrance, gold was riding on silver's coattails. Most always, it's the other way around - as it is today. Silver collapsed because the rules were changed in the middle of the game - probably illegally, as our wonderful government is prone to do. The Hunt brothers were doing everything legally and were broken by this rule change. Volker should have been hung and the Fed eliminated. The Fed is the reason for all our financial woes.

 

[Irons]

The spot price of the gold can be very tricky. The price can go up and down very fastly. If the price is low, you'll have to buy the scrap for cheap. If the scrap is cheap noone will collect it and sell it - the profit will not be high enough. If you take that risk you may win or lose. This is the risk about all the producers of everything. Taking the risk is dangerous - the market can crash suddenly. What will happen if The Russian Federation increases the PM production. I heard rummors a month ago about increasing the production of Pt and Pd. I'm pretty sure the planet is running out of gold but there is still plenty enough in jewels. The price can be regulated by the governments, too. If the price is high - there is demand. The price will stay high untill the demand is over. When the demand is over - the price will "normalize" again. When will the price go down? No one can tell you! I do it because of the fun and the skill. Along with the Au comes the Ag, Pd, Pt, Rd and many others. Never do it only for the money. There were pictures in the net showing how the gold comes out from the ground - dirty job. Not to mention the chemicals and human exploitation. Do it for the environment! Do it for the next generations! Do it for passion! Never do it only for the money!

Bulgarian loterry slogan: "The one who plays - wins and the one who does not play - does not win."

P.S. It is 23:58 now and I had an exam earlier today. I appologize for the spelling mistakes (if any) and the scatterd thoughts.

I phrase it differently: You can't lose if you don't play.

Know when to hold 'em, Know when to fold 'em. Learn to walk away. as the song goes.

 

[plamenppp]

The spot price of the gold can be very tricky. The price can go up and down very fastly. If the price is low, you'll have to buy the scrap for cheap. If the scrap is cheap noone will collect it and sell it - the profit will not be high enough. If you take that risk you may win or lose. This is the risk about all the producers of everything. Taking the risk is dangerous - the market can crash suddenly. What will happen if The Russian Federation increases the PM production. I heard rummors a month ago about increasing the production of Pt and Pd. I'm pretty sure the planet is running out of gold but there is still plenty enough in jewels. The price can be regulated by the governments, too. If the price is high - there is demand. The price will stay high untill the demand is over. When the demand is over - the price will "normalize" again. When will the price go down? No one can tell you! I do it because of the fun and the skill. Along with the Au comes the Ag, Pd, Pt, Rd and many others. Never do it only for the money. There were pictures in the net showing how the gold comes out from the ground - dirty job. Not to mention the chemicals and human exploitation. Do it for the environment! Do it for the next generations! Do it for passion! Never do it only for the money!

Bulgarian loterry slogan: "The one who plays - wins and the one who does not play - does not win."

P.S. It is 23:58 now and I had an exam earlier today. I appologize for the spelling mistakes (if any) and the scatterd thoughts.

I phrase it differently: You can't lose if you don't play.

Know when to hold 'em, Know when to fold 'em. Learn to walk away. as the song goes.

That was the exact translation. Spoken in Bulgarian it has sence.

"The who play may win and the one who does not play does not win."

 

[pinwheel]

Amen Chumba. This is going to be spectacular! Ive been waiting for years. Way ahead of my time I guess.

 

[texan]

A close friend of over 40 years asked me sometime ago when is the right time to sell gold...
I replied that my gold will be the last property I sell.... as long as I have enough cash from other activities there is no reason to dispose of it.
Gold is the one of the few commodities along with maybe wheat and salt that has a history of value in commerce that spans several thousand years...
Another friend who is a former stock broker said the he would not own bullion and that he thought mining stocks were the way to go.
I replied that in event of a total economic collapse it would be hard to buy a loaf of bread with shares in a mine several thousand miles away....
He said he would revise that and add a few Krugerrands to the mix.

Texan

 

[Harold_V]

He said he would revise that and add a few Krugerrands to the mix.

Tell your friend to revisit his idea. Krugerrands are alloyed, so they have limited appeal to those that desire pure gold. There are many bullion "coins" on the market struck from 9999 gold, which is likely a far better investment. The way I see it, there is a better market when it comes time to liquidate the investment.

Harold

 

[Oz]

It may be worth pointing out that the American Gold Eagle $50 coin has a total mass of 1.0909 Troy ounces “containing” 1 troy ounce of fine gold. It is actually only 22 karat being 91.67% gold, 5.33% copper, and 3% silver.

The US mint does make the one troy ounce American Buffalo coin that is .9999fine gold, however they just ran out of the blanks they have for this year.

Canada makes some fine gold coins if you are looking for recognizable fine gold bullion at a decent price that is recognized the world over.

 

[texan]

Most of us on this forum are aware of the difference in coinages and the various fineness each nations brand may contain. I think my friend was speaking and I was repeating what has become almost a generic name for gold coins today to the uninitiated...that being the South African Krugerrand. For many years the K was about the only gold coin in general "circulation" and has acquired a moniker almost like frigidaire did for a refrigerator and kodak for a camera. both of which were brand names. Of course the most famous one in the last half of the 20th century has to be Xerox....where a brand name became a verb.

Texan

 

[lazersteve]

FYI,

For those coin collectors of you who haven't heard yet:

Health Care Gold

What owning gold and silver has to do with health care has still got me baffled.

Steve

 

[patnor1011]

Well thats maybe because of my location but i prefer gold sovereigns or half sovereigns. They are 22k but fairly small so it is easier to sell them than one oz coins.

 

[butcher]

(Control and tax) its government, when did they ever make sense?
Tracking gold I can understand better than health care run by bureaucrats.
I get sick just thinking about it.

 

[Harold_V]

Well thats maybe because of my location but i prefer gold sovereigns or half sovereigns. They are 22k but fairly small so it is easier to sell them than one oz coins.

Very different from "bullion" coins. They are actual coinage and have collector value along with precious metal content value. That would be no different from purchasing pre '32 US gold coins. I heartily endorse such purchases, but would discourage alloyed bullion coins because they are not collectable, in spite of what you may hear, and may require refining before full value can be realized.

Harold