Select Page
The Perfect Opportunity

Gold Pricing Demystified

There are a number of concepts surrounding ‘price’ that must be clarified before one can determine which is suitable for you. Basically, there is no ‘right’ or ‘wrong’ here; it comes down to two simple profile groups that people will identify with;

  • Are you a Trader/Speculator, or
  • Do you simply want to augment your Savings/Retirement Plan?

And some people fit into both groups quite comfortably.

So, when looking at ‘price’, we need to also look at the two profiles; the one leverages Spot Price while the other can only transact at Retail Price. Spot is determined by the markets (Stock Exchanges) whereas Retail enshrines the concept of ‘value’ rather than ‘price’. Value is driven by additional cost components such as quantities, commissions, assaying, authentication, packaging, vaulting, shipping, taxes, and more.

The three different concepts that defines the Pricing of a commodity can be summarized as follows;

In short, Spot Price is simply the price at which a commodity could be traded on an exchange right now, while Futures are contracts that designate a price for future delivery of the commodity. This is the exclusive domain of Traders (e.g. Wall Street), and the Spot Price is influenced by Futures contracts. Mere mortals will never be able to buy gold (and get it delivered into their hands) at Spot.

Retail Price is the price you pay for gold at retail stores and is influenced by Spot as well as the components that drive Value…

Karatbars products are NOT targeted at Traders or Speculators, it is targeted at Wealth Protectors. To understand the difference between the two, ask yourself the following question;

Should you find yourself in an economic crises, like hyperinflation, where would your focus be;

  • Would you be concerned about the price of gold traded on the markets, or
  • Would you be concerned about how much groceries that 1g bar of gold you hold in your hand will buy you?

If you fall in the second category, this is the place for you. And since we are not interested in speculation with the commodity, we look to the best Value of gold that we can augment our long-term Savings/Retirement plans with for, rather than the Price of gold right now. Our primary focus is on protecting our wealth against inflation and leveraging the outstanding economic properties of gold to the fullest extent.

Future Proof” Your Gold Savings Vehicle

Apart from the most obvious benefits of holding physical gold (e.g. store of value over long period of time, hedge against inflation, etc.; contributors to the product’s Intrinsic Value), we must ensure that the gold we hold is authentic, secure and easily exchangeable for goods and services in the future; defining the product’s Perceived Value. After all, what use will any savings vehicle be if you cannot redeem it when you need it? Gold has some of the most amazing ‘future-proofing’ qualities that you will not be able to find in any other savings vehicle. However, if you are not aware of these, your investment will not be optimized.

The following ‘Value Drivers’ are direct future proofing qualities that will ensure gold as the best long-term savings vehicle to protect your wealth (‘money insurance’). However, this insurance premium is paid once-off and up-front, as opposed to traditional paper-based savings vehicles, where you have to pay the premium every month.

Value Driver 1 – LBMA Accredited Refineries

In the refining industry, the London Bullion Market Association (LBMA) Good Delivery List includes the world’s preeminent refiners of gold and silver, located in 28 countries.LBMA
The List is widely recognized as the de facto standard for the quality of gold and silver market bars and is used by precious metal exchanges around the world to define in whole or in part the refiners whose gold and silver bars are accepted in their own markets.
In order to be listed, a refiner must first satisfy the Physical Committees to its standing, ownership, net worth and operating history. In particular, it must have produced at least 10 tonnes of refined gold or 50 tonnes refined silver annually for a period of at least three years before it can be considered for technical assessment.
Once an application is accepted for consideration, the first stage of technical testing involves an assessment of the refinery’s assaying ability. This is done by the LBMA sending it a set of reference samples that the refiner’s laboratory must assay within the exacting criteria laid down by the LBMA.
If the assaying test is passed, the refiner is then required to submit bars for inspection by representatives of the London market and then technical testing by two of the LBMA’s five Good Delivery Referees (which are located in Japan, South Africa and Switzerland).
The Good Delivery Rules, which describe how applications are processed, also contain full details of bar specifications, and the inspection, weighing and packing procedures practiced in the London vaults.

Karatbars sources its gold from Nadir in Turkey (check their credentials on the LBMA Good Delivery List).

Gold originating from LBMA accredited refineries are highly valued by the precious metals industry world-wide, and has the single advantage that gold that carries an Assayers signature from these refineries are undisputed. Products from unlisted refineries is almost certain to require re-valuation by an accredited assaying authority, which carries the burden of additional cost and time.

Value Driver 2 – Security Hologram

In 1993, Union Bank of Switzerland (USB) announced the creation of the Kinebar which is the hologram feature on the back of every Karatbar gold card. This was the first time in history that people felt comfortable removing their bullion from vaulted storage. Before, if you took physical delivery of your gold and ever needed to convert it back into a currency, the burden was on you, the Holder of the gold, to prove its purity, fineness and weight. The creation of the Kinebar hologram made world news within days; as long as the hologram remains intact, the Holder does not have to prove that the gold has not been altered or manipulated in any way. If the gold does not have this feature and you need to liquidate, then the burden is on the Holder to arrange for an Assay on the gold all over again. The assaying process is not only costly but also time consuming. When you need to liquidate, the last thing you want is to incur cost and time before you can redeem your gold for cash. There are only 2 vendors that use this technology, other than Karatbars; Argo Heraeus and UBS.

Note 1: Gold traded on stock exchanges and ETF’s do not have this security feature, which enables Traders to trade freely with the ‘commodity’, rather than the physical product. The ‘spot’ price is based on ‘paper assets’, rather than the physical assets, meaning that most of the time there are more ‘paper’ assets traded than the actual physical assets (e.g. 100 x 1oz paper assets traded against 1 x 1oz actual gold). The price resulting from trading assets on paper is what gives rise to the spot price, and it works very well as long as everyone holding a paper asset don’t exchange the paper asset for the physical asset all at once… This is when this grand scam will be threatened and the banks will probably declare a ‘bank holiday‘ to let things settle down. One can therefore not compare spot price with retail price. Spot price is mostly fictitious (which is why you and I will never be able to buy physical gold at spot, unless we are Traders ourselves…), whereas retail price is not.

Note 2: The security hologram is built-in assurance that the product is authentic, and makes the product almost as simple to transact with as paper money. This obviously comes at a cost, as all insurance vehicles does, but the difference here is that this cost is once-off; it is one component that is added to the retail price, which increases the ‘value’.

Any precious metals Retailer in the world buys gold at wholesale price from a Distributor (including the profit margin of the Refinery and the Distributor) who then sells it to the public at retail price (including the profit margin of the Retailer). You can see why there is a difference between spot- and retail pricing.

Value Driver 3 – Unique DNA Signature

As of January 2015, Karatbars significantly enhanced the security and authentication of its product; it still has the security hologram, but they added “DNA” technology where the gold is literally bathed in a process that imprints unique, hidden DNA genetic markers, or signature, in the card and gold itself. This DNA signature can only be seen by black light technology. This technology is unique to Karatbars and as the brand grows at the rate it currently does, I have no doubt that other Vendors will seek ways to employ similar technologies into their products in order to remain competitive with Karatbars.

Value Driver 4 – Packaging & Lamination

The Karatbars lamination process is second to none! In the beginning, Karatbars’ gold producers used the same lamination processes as UBS and Argo Heraeus to package their products. However, due to issues with the lamination peeling, Karatbars decided to in-source the lamination process end-to-end and purchased the highest quality technology in the world and employed the staff to laminate and seal the gold in-house, under strict security and quality control.

This card-sized lamination process is necessary in order to protect the gold, as 1 gram of the purest gold you can find on the planet is fairly soft, and by embedding it in this convenient, secure package not only serves to protect and authenticate the gold, but makes it easy to handle and transact with.

Summary

When we evaluate the ‘price’ of gold, it is necessary to understand that there are differences in ‘price’ and ‘value’. What differentiates a top-of-the-line Rolex watch from a top-of-the-line Swatch watch? Both products keeps time, but one will fetch up to around $22,000 (Squiggly) while the other will fetch up to around $440,000 (SwissLuxury). Both these prices are for the top-end products in these two camps, but it is the Intrinsic and Perceived values that differentiates the two; you can buy a watch that serves exactly the same purpose, with looks to suit, for around $25 (MiniInTheBox)…

Not that your $440k Rolex will help you much in times of crises; you may be lucky to swap it for a a few trolley’s of groceries… However, this is where the Karatbars gold will be unfathomably more valuable than any other similar gold products; 1 gram of Karatbars gold will buy you 1 trolley of groceries, in the best of times as well as the very worst. He who owns gold makes the rules… And this is exactly why Karatbars Affiliates are so passionate about its products – it primarily serves two main purposes (for the ordinary ‘man in the street’);

  • It protects wealth against inflation, forever, and will hold its value in the future as it has done so for the past almost 3,000 years, and
  • In times of economic crises, gold, in a small footprint, secure, authenticated ‘package’, will be one of a handful of vehicles that you will be able to trade with.

Given the facts on this page, it is up to you to decide if you would prefer to ‘trade’ with gold (on exchanges and EFT’s) or if you want to ‘save’ with gold – what is most important to you; price or value. There is no right or wrong here; you decide, based on your own circumstances and aspirations…

Please take a moment to watch Brian McGinty, highly successful Independent Karatbars Affiliate, with a significant global Team, unpacking the Karatbars price.

Spot Price vs Retail Price

Beware of ‘Counterfeit’ Gold

I posted a couple of videos below to share with you why the security technology we use is so valuable and why it is critical to purchase gold from vendors that you can trust…

Quick Price Comparison of 1g Gold between 5 LBMA Approved Products

Click on an image to pull up the price tab for that Product.

Karatbars

  • Minimum Purchase Value = €50 (on auto-payment)
  • Minimum Order Quantity = 1
  • Vaulted Storage = Free, indefinite
  • Security Hologram = Karatbars (Kinebar)
  • Unique DNA = Yes
  • Shipping = Worldwide $20.84 up to 100 grams (vault for free up to 100g then ship once)
  • Taxes = Yes (Country specific)

Suisse Gold – USB

  • Minimum Purchase Value = Price of 1g
  • Minimum Order Quantity = 1
  • Vaulted Storage = Free for 1 year
  • Security Hologram = Kinebar
  • Unique DNA = No
  • Shipping
    • United Kingdom: $1 to $9,999 = $15 shipping + 1.5% insurance
    • European Union: $1 to $9,999 = $20 shipping + 1.5% insurance
    • United States: $1 to $9,999 = $30 shipping + 1.5% insurance
    • Worldwide: $1 to $9,999 =  $40 shipping + 1.5% insurance
  • Taxes = ?

Gold de Royale – Argor Heraeus

  • Minimum Purchase Value = Price of 1g
  • Minimum Order Quantity = 1
  • Vaulted Storage = Individual pricing T’&C’s
  • Security Hologram = Kinebar
  • Unique DNA = No
  • Shipping;
    • Courier: $34 for up to $10,000
    • Registered post: $34 for up to $2,000
    • Secured Armoured Delivery: Available on quote
    • International shipping charges: Available on quote
  • Taxes = ?

Gold de Royale – PAMP Suisse

  • Minimum Purchase Value = Price of 1g
  • Minimum Order Quantity = 1
  • Vaulted Storage = Individual pricing T’&C’s
  • Security Hologram = None
  • Unique DNA = No
  • Shipping;
    • Courier: $34 for up to $10,000
    • Registered post: $34 for up to $2,000
    • Secured Armoured Delivery: Available on quote
    • International shipping charges: Available on quote
  • Taxes = ?

Price Comparison as at 17 June 2016

Product (LBMA)
Retail
Karatbars $67.19
Suisse Gold – USB $81.42
Gold de Royale – Argor Heraeus $92.00
Gold de Royale – PAMP Suisse $79.00
Gold de Royale – Valcambi Swiss $81.00
Product (Non LBMA)
Retail
 JM Bullion – Valcambi Suisse $51.44
 JM Bullion – Sunshine Minting Inc $47.88
 JM Bullion – Perth Mint $51.75
JM Bullion – RMC Republic $50.44

Apart from the very obvious packaging quality and aesthetics, minimum purchase value and free, indefinite vaulted storage, the most significant differentiation is that Karatbars is up to $24 less expensive than the other LBMA brands.

The JM Bullion products does not have any security holograms, nor is it produced by an LBMA accredited foundary. This could take time and money when you need to redeem your gold for cash, and at a time you may least afford it. Your choice…

Gold de Royale – Valcambi Swiss

  • Minimum Purchase Value = Price of 1g
  • Minimum Order Quantity = 25
  • Vaulted Storage = Individual pricing T’&C’s
  • Security Hologram = None
  • Unique DNA = No
  • Shipping;
    • Courier: $34 for up to $10,000
    • Registered post: $34 for up to $2,000
    • Secured Armoured Delivery: Available on quote
    • International shipping charges: Available on quote
  • Taxes = ?

1g Gold Non LBMA Approved Products

Click on an image to pull up the price tab for that Product.

JM Bullion – Valcambi Suisse

  • Minimum Purchase Value = Price of 1g
  • Minimum Order Quantity = 1
  • Vaulted Storage = None
  • Security Hologram = None
  • Unique DNA = No
  • Shipping = Free in the USA
  • Taxes = ?

JM Bullion – Sunshine Minting Inc

  • Minimum Purchase Value = Price of 1g
  • Minimum Order Quantity = 1
  • Vaulted Storage = None
  • Security Hologram = None
  • Unique DNA = No
  • Shipping = Free in the USA
  • Taxes = ?

JM Bullion – Perth Mint

  • Minimum Purchase Value = Price of 1g
  • Minimum Order Quantity = 1
  • Vaulted Storage = None
  • Security Hologram = None
  • Unique DNA = No
  • Shipping = Free in the USA
  • Taxes = ?

JM Bullion – RMC Republic

  • Minimum Purchase Value = Price of 1g
  • Minimum Order Quantity = 1
  • Vaulted Storage = None
  • Security Hologram = None
  • Unique DNA = No
  • Shipping = Free in the USA
  • Taxes = ?

Still have Questions?

Additional points not covered above…

Most people don’t know that there are 2 different Asset Classes in Gold: Commodity- and Currency Grade

And they are 2 different “animals”… Commodity gold can be doré, dust, mines, anything really, from 10 Karat and up. Currency grade is considered 24 Karat good delivery gold.

In order for gold to be classified as ‘Good Delivery’ it must be produced by an LBMA accredited refinery. Commodity grade and Currency grade have nothing to do with the weight (Karat) of the bar.

Gold, in small (1g, 2.5g or 5g) 24 Karat 999.9 fine weights are far more affordable than the traditional weights – 1 Troy Ounce = 31.1 Grams, and to own 1 Ounce of gold will cost you around $1,200 versus 1 Gram at around $60. And when you look at ‘saving’ in gold (not ‘trading/speculating’), everything revolves around VALUE, not price… In times of economic crises, do you think people will worry about the spot price of 1g of gold or how much groceries they can buy with 1g of gold that they have in their hands (given, of course, that it is properly authenticated and assayed; refer to the first section above)? Who cares about the spot price if you are starving?

This, new, ‘small footprint’ type of gold will become more valuable over time since it makes gold (for the first time) accessible to the masses (no longer the exclusive domain of the super rich), and a whole new industry is evolving around the trading of this new format of gold, not on the stock exchanges, but in common retail stores (groceries, clothing, gas stations, etc.). You only have to look at the K-Exchange phenomenon sprouting up around the world to get an appreciation of the extraordinary ‘value’ people places in being able to acquire gold.

Trying to compare “ounces of industrial gold” with “ounces of good delivery gold” is an error in itself. You cannot compare apples with oranges, as the only similarities are in the shape and size.

Remember:

The market price (spot) is based on 1 Troy Ounce of gold, without added fees for assaying, packaging, delivery, transport, vaulting or commissions. Most brokers have a minimum limit of $25,000 to $50,000 for the purchase of physical bullion.

There are 31.1034768 grams in 1 Troy ounce. To create 31 individual grams, one requires 31 times more labor, packaging, etc. The labor is intensified because each unit has a serial number and is assayed separately. Gram weights are normally so expensive to produce that most dealers do not offer individual grams for sale, much less one at a time, like Karatbars does. However, the premium associated with producing the smaller units remains, which increases its value. It makes more sense to compare value than price…

If you wanted a Kilogram good delivery bar, you would see the opposite side of the industry. Now, you hear the term, below spot or spot minus 2%… It simply takes less labor to produce a 1Kg bar than 32 x 1oz (there are 32.1507 troy ounces in 1 Kilogram) or 1,000 x 1g bars.

I suggest using GOOGLE and then do a search for the following key words.

Kinebar (hologram)
LBMA
1 gram 999.9 gold bullion

Karatbars, when compared to the few competitors who produce the same quality gold bars, 9 times out of 10 will come in at the best value and lowest retail price. The key to really understand the term ‘value’ is to look at competitors and read the small print regarding certification, security, storage, delivery and minimum order quantities.

You have no logical reason not to join; it is free and absolutely no obligation whatsoever, forever!

Karatbars Disclaimer: Every effort has been made to accurately represent Karatbars Marketing plan and its potential. All earnings or income examples will depend solely on the ideas, techniques, knowledge, skills, and time invested into your independent business. Karatbars does not guarantee any results or success level and is not responsible for any financial decisions you make in relation to promoting our products.  Any and all income examples used by Karatbars or its affiliates are not to be considered average earnings. It is mutually agreed that Karatbars, its affiliated entities, principals, employees, are in no way responsible for the success or failure of your business decisions relating to any information presented by our company, or our company products or services. You agree to hold harmless Karatbars, its affiliated entities, principals, employees, and any other Affiliates from and against any claim for damages, monetary or otherwise, for any reason involving or arising from this program.

We are proud Affiliates/Independent Contractors representing Karatbars International.We are not employed by, nor claim to be employees of Karatbars International.


Credits: We wish to thank the contributors of certain material and images leveraged throughout this website and to acknowledge authors like Mike Malone (Hidden Secrets of Money video series), Howard Olsen (Karatbars Gold Reception and other promotional/training videos), Brian McGinty (Karatbars promotional/training videos), Alby Koster (Step-by-Step 'How to' videos) and the many other authors and contributors that share the same passion:- To protect our retirement savings from the cancerous effects of inflation and economic melt-downs. Without your hard work and support so many people will not get this message.