Retail Gold: A lucrative and global market
Forget the archaic image of a few fanatics hiding gold in their home safes to save it for themselves. Gold is traded on a global scale, and individual individuals possess around 45,000 tonnes of the precious metal in the form of bars and coins. This represents approximately 22 percent of all of the gold that has ever been mined.
In point of fact, the market for bars and coins accounts for 25 percent of the yearly demand for gold on a global scale. This amounts to almost 1,000 metric tonnes of retail investing in gold each year.
However, ownership of gold has long since moved beyond the requirement for the commodity to be physically stored. This applies to gold items as well as bars and coins.
A growing number of investors now hold their gold in the form of digital tokens on blockchain, also known as tokenized gold. You can also purchase digital gold using an app or website, and it will be stored in a vault on the investor’s behalf.
Even though there are no regulations governing the retail gold market, it is still possible to navigate it safely with the appropriate assistance. Because of this, the Global Gold Council came up with Retail Gold Investment Guidelines in order to encourage trust in this expansive and high-value sector.
The Provider Principles
The Retail Gold Investment Principles (RGIPs) were developed by the World Gold Council with input from 52 different industry players from from 16 different nations.
The principles provide providers of all different kinds of gold goods with a sets of best practises to follow, and are working with industry to develop methods by which sellers can demonstrate that they adhere to the standards.
Gold suppliers also get benefits when they collaborate with self-assured investors who place their faith in gold market that is managed by stringent criteria.
Principle 1: Fairness and integrity
From the provision of information and services all the way through to the conclusion of the transaction, a provider is obligated to treat their consumers fairly and operate with integrity.
Principle 2: Transparency
A provider is required to provide all material information, including prices, key terms, and any additional pertinent information relating to product features.
Principle 3: Protection of client assets
A provider has an obligation to offer consumers with an acceptable level of protection for their gold holdings and any other assets, including cash, that are held on their behalf.
Principle 4: Responsible gold sourcing
In addition to taking into account Environmental, Social, and Governance (ESG) standards, a provider is required to procure gold with a high level of authenticity from reliable suppliers.
Principle 5: Regulatory compliance
A supplier is obligated to comply with all of the relevant regulations and local legislation.
Principle 6: Commercial prudence
A provider must avoid taking unnecessary risks and therefore should be ready for a variety of contingencies, including the possibility that their business will be wound down.
Principle 7: Operational professionalism
A provider is required to manage critical risks and operate their business with the appropriate level of expertise, care, and diligence.