What is "good" gold – and how is it distinguishable?

News Arnulf Hinkel, Financial journalist – 21.04.2017

It was a long time ago – about 1,950 years – when the Roman emperor Vespasian coined the famous saying "pecunia non olet" ("money does not stink"). His son had reproached him for the unethical origin of the revenue from the so-called “privy” tax. Vespasian then made his offspring smell coins to prove his case. Nowadays it is not only quite common but also important for an increasing number of investors to know the origin of their valuables and revenues. Who would want to adorn their finger with a blood diamond these days? An equally important and often decisive criterion for a planned investment is how the invested assets are put to use. It cannot be a coincidence that today there is such a vast selection of investment funds whose constituents are chosen regarding very specific ethical or ecological criteria. These range from sustainable use of natural resources, particularly environmentally friendly methods of extraction of natural resources to the humane treatment of employees of the companies concerned and, of course, fair wages. Take the textile industry as a prime example.

How the origin of gold can be determined

Since it is impossible to determine by looking at a gold bar where and under which conditions the gold it contains was produced, the Responsible Jewellery Council has been certifying gold-producing companies since 2005. Certification requires the adherence to very specific and universal standards regarding an ethical, socially, environmentally and human rights-compliant company policy along the entire service chain. Since the Responsible Jewellery Council was founded by gold and diamond producing companies and the industry’s trade associations, the number of members of the initiative has risen rapidly. Gold bars from manufacturers bearing the certificate of the Responsible Jewellery Council therefore have a good and clean “family tree", therefore meeting the requirements of critical and environmentally oriented investors.

The quality of a gold bar is certifiable, too

As with the origin of the precious metals used to manufacture a gold bar, most private investors do not have the knowledge or the means to evaluate its exact quality. No need to worry, as there also is a standard that most renowned gold producers fulfil: the "Good Delivery" certificate of the LBMA, the London Bullion Market Association. To obtain this certificate, stringent requirements regarding the dimensions, weight, appearance and stamping of a gold bar must be fulfilled.

Umicore: Gold bars from sustainable sources

As a global leader in the supply and handling of all precious metals, Umicore, the global material technology group, is committed to gaining gold as far as possible through recycling. This is more efficient and, above all, more environmentally friendly than gold mining: while the production of a one kilo gold bar requires the mining of 200 tons of ore, Umicore can manufacture the exact same one kilo gold bar from only four tons of disposed mobiles and smart phones. Umicore produces a number of products containing gold, such as car exhaust gas catalysts, and has been the technology leader in this field for many years now. The company has used their knowledge to recover gold by recycling not only these very exhaust gas catalysts, but also laptops and the already mentioned mobile phones to close the gold production circle.

Umicore is a partner of the issuer of Xetra-Gold, Deutsche Börse Commodities, and exclusively produces LBMA-certified "Good Delivery" gold bars, which also bear the seal of approval of the Responsible Jewellery Council. In early 2017, Umicore also introduced their own authenticity certificate in order to protect gold bar buyers against any fraudulent tempering with a Umicore gold bar after production and delivery, for instance when buying from private hands. By introducing this authenticity certificate Umicore has extended the origin and quality guarantee from production to manufacturing to selling and re-selling to an investor.

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