Germany Announces Repatriation of Gold Reserves

In January of this year, the German government announced that it would transfer a large amount of its gold reserves from foreign banks back to its native soil.

Originally, Germany strived to store as much gold as possible outside of the country for reasons of safety and convenience. During the Cold War, the German government shipped its gold as far west as possible for fear of a Soviet invasion. Additionally, Germany has suffered significant currency problems in the past. By keeping the majority of its gold stores near important foreign currency markets, it could use the gold to quickly and easily buy up stronger currencies in case of a crisis. As a result, more than two-thirds of Germany’s gold has been kept at the Federal Reserve Bank of New York, the Banque de France in Paris, and of course, the Bank of England in London – also home of the London Fixing.

Today, any advantages Germany gained from keeping its gold stored on foreign soil are mostly moot. Both Germany and France have converted to the euro, so currency exchanges in that country are a thing of the past. And of course, there is no longer a threat of hostile takeover by another country. Still, moving several hundred tons of gold represents a great expense and security risk. What else is motivating Germany to transfer so much gold?

There are many other possible factors prompting the move. Germany’s government auditors have suggested that keeping so much gold abroad makes it poorly accounted for. Additionally, the faltering of so many economies around the world has put much of the German public on edge about the stability of Germany’s economy, which in turn puts pressure on the government.

In all, Germany is moving 674 tons of gold. All 374 tons of Germany’s gold reserves stored at the Banque de France will head back to its native country. The remaining 300 tons will come from the Federal Reserve. In total, the gold is worth about $36 billion. For security reasons, the gold will not be moved all at once and should be completed by 2020. Once the move is complete, the Bundesbank of Germany will hold 50 percent of the country’s gold reserves, with the Federal Reserve holding 37 percent and the Bank of England holding the remaining 13 percent.

Promoting Palladium to Jewelry Customers

Palladium has been used to make jewelry for nearly a century. However, it’s never really reached a fever pitch in popularity. It came close during World War II when platinum was declared as a strategic resource by the US government and many jewelers offered platinum as a substitute. But, difficulties with the casting process kept many jewelers from fully embracing palladium, causing platinum and white gold to once again become the popular materials.

There have sine been improvements to the casting process to make the metalworking more accessible, but palladium can still be a tricky metal to work with for less experienced jewelers. However, it can be well-worth trouble because of the numerous advantages it can offer to discerning customers. When presenting palladium pieces to your customers, try to emphasize the following points:

Similar appearance to platinum: Since palladium is one of the platinum group metals (PGMs), it has a very similar color and appearance to platinum. Depending on the impurities and polishing technique, the difference can be imperceptible except to the well-trained eye.

Durability: While platinum is very strong in a sense, it doesn’t take many years for it to develop a permanent patina of scratch marks. Platinum is so hard, the scratches can be polished out. While some consider this feature to be a hallmark of the jewelry’s character, those who desire pristine looking pieces will be disappointed. Palladium, however, is more malleable so any scratches that appear can be more easily polished out.

Easy care and natural luster: On its own, 14k white gold alloy still has a yellowish appearance. It only gains its signature shade of white when it has rhodium plating – which must be replaced periodically as part of its upkeep. Meanwhile, palladium is naturally white hued and doesn’t require any plating to protect its appearance.

Price: Precious metal prices are always changing, but palladium pieces generally go for the same price as similarly sized 14k white gold pieces or half the price of platinum pieces. For many customers, this is a major selling point!

Because of its uniqueness and multiple advantages, it can be well worth the effort to expand your shop’s palladium offerings.

AML and Your Business

Anti-money laundering laws can require a lot of extra paperwork and scrutiny from your business. But what do AML laws really mean for your daily operations and bottom line?

In actuality, they’re really not a big deal. AML laws are meant to protect your company and your integrity in the event you accidentally purchase a stolen item or engage in some kind of transaction you thought was legitimate.

In terms of AML paperwork, the first things you will be asked to produce are documents to make sure your intentions were good when making that purchase or sale. The more due diligence you do, the more protected you’ll be at the end of the day.

There are certain things we do at MGS in order to make sure we’re dealing with legitimate companies. For example, we ask for a driver’s license and credit references along with a couple of other items. Keep in mind: we do actually call the references. While some people might be insulted when we ask for these items, this is done in order to keep out the people that we are better off not doing business with. There are instances when we refuse to do business with a company if we hear they have a history of inappropriate business activities. These types of companies are ones that you and I want nothing to do with; it’s perfectly okay to turn down a purchase or sale if any references raise a red flag.

At the end of the day, just remember AML laws are a good thing. They’re one more step in helping to fight terrorism, organized crime, and money laundering.