MUMBAI, 3 JULY, 2020 (GPN):(Authored By Mr. Chirag Mehta – Senior Fund Manager – Alternative Investments, Quantum Mutual Fund) As per the latest media report a big gold fraud has been busted in China recently where 83 tons of gold bars used as loan collateral actually turned out to be copper!

This news has spooked gold markets in India considering that India imports most of its annual gold requirements of 700-800 tons! But purity concerns aren’t new for an Indian gold consumer or investor.

As per the World Gold Council Retail Gold Insights survey 2019, 48% of potential investors and 28% of potential jewelry consumers cited lack of trust as a significant barrier to investing in or purchasing gold. That is indicative of apprehensions around fake or counterfeit bars and coins and product purity.

And these apprehensions haven’t been without a reason. The country’s biggest refiner MMTC PAMP too has been quoted as “The scrap gold that the company gets for refining often contains 15-20% less gold than what 18 to 22-carat gold jewelry should have…In fact, as per data from Bureau of Indian Standards, 18%-20% of items picked from the market for random sampling have lower gold content than what is marked. 

These statistics are indeed distressing for gold investors in India. We all buy gold or jewelry as a means of securing our future or funding long term liabilities, such as daughter’s marriage or medical expenses or son’s education abroad. But we may not be sure of the purity of gold that we hold and how much value we may have to lose if it’s impure. Such fact’s can shatter consumer’s faith in buying Gold in physical form, which is always a safe haven for them. 

When buying physical gold, purity is always a question. We all know of experiences we ourselves or someone known to us have had when one was caught with impure physical gold / jewelry and thereby settled for a lower resale value. 

One sure way to tackle this purity issue is to invest in gold via the Quantum Gold ETF.

As Quantum Gold ETF investors you can be assured about the purity of gold backing your gold ETF units. All the gold owned by the fund on behalf of investors is stored in professional vaults.  

The following is the process that we follow for purchasing the gold that backs the Quantum Gold ETF.

• We purchase gold of only 995 finesse or above aka 24Karat, sourced only from London Bullion Market Association accredited refiners. LBMA is a global authority in precious metals and has a stringent criteria and process for certifying refiners. India has more than 23 refiners and only one refiner is LBMA certified.
• Gold bars individually accompany a refiners certificate matching the serial number on the bar
• We purchase gold that is imported through banking / authorized channels only
• We keep tab of the trail of gold and ensure that after leaving the refiners door, it has not left sight of the accredited vaulters who have the liability to certify that for each gold bar
• Gold at any time even for a fraction of second should not have left custody of the accredited vaulters. Once its gone out of the vaults, it cannot be accepted
• We ensure that the gold is accompanied by all the necessary statutory documents that help verify gold’s trail such as Customs invoice, Bill of Entry, Master Airway Bill, Purity Certificate etc., – establishing authenticity of gold

The gold is checked and verified twice a year by Statutory auditors and monthly by the custodian audits.  In addition to that we ourselves go to the vault to check each and every gold bar held by the fund. And let me tell you that these vaults are highly secure and all the gold is safe. Let me share my experience. Firstly, only authorized personnel are allowed entry. Before visiting these vaults, I considered airport security checks tedious, now they seem like a breeze in comparison, because that’s just the way visitors are scanned before entering the vault premises. Armed security and electronic monitoring only add to the ambience, which is guarded by multiple gates and metal detectors.  

Once you have passed through the security checks, you are escorted to the lockers where the gold is stored in boxes, each box carrying 25 kgs of gold. Both the lockers and the boxes carrying the gold can be opened only one at a time.   Every single bar is personally checked and counted, while verifying the refiner’s check marks during our visits. 

In addition to the highly secure places where your gold is stored, it is completely insured. The gold at all times is covered by a comprehensive insurance policy that even includes a terrorism cover. Ever tried insuring gold that you own or one in your lockers? I am sure that is next to impossible!

In addition to the robust purchasing process and monthly checks, in order to give investors more comfort and to be doubly sure of the gold that the fund holds on behalf of investors, Quantum AMC puts all the gold bars that we hold under a “purity test” every year. A first of its kind initiative by any Gold ETF in India! Even our vaulting agent who has been in safekeeping and transporting precious metals since years was amazed to see this exercise being done when we did it for the first time. And they are amazed how we diligently do it every year when no one else hasn’t done it even once.

Every year, we would hire a professional agency who’s an expert to conduct such purity tests. TCR Engineering Services Pvt. Ltd last conducted the audit. Founded in 1973, it is an ISO 17025 and NABL accredited independent Material Testing and Quality Assurance Laboratory serving 2500+ customers globally. They tested the gold bars held by Quantum Gold ETF using portable X-Ray Florescence analyzers which non-destructively and accurately measure the chemical composition of each and every gold bar held by the fund. We also disclose this Purity Certificate in our Annual Report every year. 

You would be pleased to know, and we are glad to inform  that all the gold held in Quantum Gold ETF has been tested and certified to be of 995 purity aka 24 Karat and above.

So, dear investor, we take pride in confirming that all gold owned by Quantum Gold ETF on your behalf is absolutely pure gold. 

Now that you are assured of the purity of gold you are investing in, you can confidently choose Quantum Gold ETF for your investments. ENDS