When we wrote a recent article on how to invest in gold. We covered precious metal stocks, Exchange Traded Funds, spread betting, and options.
But sort of skipped over buying physical gold.
Well, traditionally, if you want to actually invest in physical gold you’ve had some fairly limited options.
- You can either buy gold bars and keep them in your safe. In which case you’ll be burgled.
- Or you can buy jewelry, but that’s not efficient, because you pay for the design on top of the raw material and you’ll get robbed on the street.
- Or you can buy gold through a bullion dealer, but then you are restricted to their pricing and storage.
So is there a way to buy physical gold, at the right price, without being burgled or robbed?
A new app, Goldex may be the answer.
I was recently re-introduced to Sylvia Carrasco the founder and CEO of Goldex by someone I used to work with decades ago at Man Financial. Sylvia was at Man too, although on a different trading floor at a time when Man was one of the oldest and biggest commodities brokers in the world.
If you want to know what happened to Man Financial, read The Money Noose, by Scott Skyrm, which according to Thomas Peterffy, (Chairman, CEO, and President of Interactive Brokers) “makes complex financial scenarios accessible to all interested readers in an informative and entertaining manner. We can all learn something from this book.”
On the surface, Goldex may look like any other fintech company trying to modernise an asset class, a app attached to a prepaid debit card which you preload with gold (the original cryptocurrency) instead of cash. But actually, what’s important is what is going on behind the scenes.
What Goldex does, is aggregate the best bid/offers from multiple gold markets so that investors wanting to buy physical gold get best execution, rather than having to shop around different brokers for the best price.
Just as Betfair increased the competition for pricing in sports trading. Goldex, does it for physical gold.
I met Sylvia, at her London offices, just around the corner from Silicone Roundabout and had a lovely chat about commuting to work on scooters, how the industry has changed, and indeed, how it hasn’t.
More interestingly though, here’s more from Sylvia about Goldex and what the app hopes to achieve.
So first off, tell us about Goldex. What does it do, how does it work?
Goldex is the first gold marketplace that powers ethical pricing for both retail and institutional gold investors.
The Goldex app aggregates prices from gold markets, in a selection of international vaults, and delivers the best available deals to customers thanks to the only smart trading technology developed for physical gold.
With no minimum size required, Goldex aims to take physical gold investments into the 21st century, encouraging a fairer and more accessible market for all. Customers are empowered to make investment savvy decisions through an app that brings together access to gold-related news, price charts and trade recommendations with sophisticated easy-to-use trading tools to buy and sell gold 24×7.
Goldex has implemented the latest cybersecurity measures, a unique operational design and a legally protected gold ownership trust, so that customers can invest in gold confidently and in a secure environment.
Why did you set it up?
I thought of the business four years ago. As a City trading professional and one of the pioneers in the electronic trading field, I started looking at purchasing physical gold for my own personal portfolio and realised how this market was still archaic in the way it operated and how un-transparent it was for the end user.
Also, the fact that in a non-regulated, OTC, all players were acting as Principals on every trade, made it obvious that clients were not always given the best prices often found in a regulated environment.
What’s the main advantage of using Goldex to invest in Gold as opposed to using other traditional or online gold providers?
Goldex does not own a single gram of gold.
Instead, we built the first consolidated marketplace which features carefully selected gold providers who show their best buy and sell prices for physical gold.
Our technology consolidates the prices into a single price tap which also makes it very easy for the users.
Goldex is a trading technology agent, not a bullion provider.
This technology also allows for customers to buy and sell gold 24×7.
With all products, there is always a downside. So, in the interest of balance. What would you say customers should be mindful of when using an app such as Goldex for investing in Gold?
In terms of the product – It’s early days at Goldex and we are constantly listening to user recommendations of how we can improve the app. We reach out to the Goldex community to gather feedback and surface any issues they may have when using the app.
In terms of the investment, we remind our users that Gold is an asset class that has inherent volatility and all investments should be decided carefully before entering into, as they can go up but also down and erode some of the capital first invested.
As one of only a handful of women fintech CEOs. Do you think enough is being done to promote diversity? And what do you think can be done to encourage more women to become founders?
Did you know that just 1p in every £1 invested in the UK in 2017, went to all-female founding teams and a quarter of UK funds saw no women at their investment committee stage in 201?
Recently, the British Business Bank in collaboration with Diversity VC released a first-of-a-kind report on the £5bn imbalance between capital allocated to male, mixed gender and female founding teams in the UK.
What could be causing this imbalance?
There is still a remarkably low number of women in STEM careers, just 26% of those in STEM are female. Also, there is a lack of diversity amongst Venture Capital investment teams, which are predominantly male in the UK.
There is some positive news, however, in 2018, more female-founded businesses received funding at an earlier state: 22% of angel of seed stage deals went to teams with a female founder compared with 15% at growth stage.
And finally, what would be your top two online resources that you could recommend to those who want to invest in gold?
- While none of these resources offer sophisticated, an easy-to-use app such as Goldex, they are very accurate guides for someone who wants to learn more about this asset class:
- World Gold Council (https://www.gold.org)
- Investopedia (https://www.investopedia.com/articles/basics/08/gold-strategies.asp)
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Richard started the Good Broker Guide in 2015 and has been a broker for 20 years most recently at Investors Intelligence and previously a multi-asset derivatives broker at MF Global (Man Financial). Richard started his career working as a private client stockbroker at Walker Crips and Phillip Securities (now King and Shaxson) after interning on the NYMEX oil trading floor in New York and London IPE in 2001 & 2000.