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The gold market is definitely an alternative to the stock market, in the long run, says Liviu Dumitrescu, CEO of "Aurom Metal Investment".
"Specialists say that some of the individual investments must include gold, and whoever wants to invest in gold should buy pure gold", he said, and he went ton to say that people who bought gold give years ago, paying ten dollars per gram, stood to gain, as the gram of gold now costs 30 Euros.
Aurom has entered a partnership with Rand Refinery, the biggest integrated complex for melting and refining precious metals, which has announced its entry on the market yesterday.
As a result, the South-African company will provide to Romanian customers, through Aurom Metal Investment, a number of services intended for domestic customers that want to invest in gold.
Rand Refinery intends to sell gold through banks.
For that purpose, Liviu Dumitrescu said: "Rand Refinery makes available to Romanian banks the physical gold that they need to meet the customers' needs. The gold market in Romania is in full development process, and we want to offset that through the services which we can provide".
Rand Refinery manufactures a large range of finished products, from cast gold bars, to stamped bars, medallions and planchets, half-finished products for the jewelry and manufacturing industry.
Aurom Metal Investment, created in 2011, is an exclusive partner of Rand Refinery in Romania, as it has been authorized as an intermediary/seller of precious metals by the National Association for Consumer Protection - the Precious Metal Department.
According to Liviu Dumitrescu, the market for pure gold in Romania amounts to about 1 ton a year: "Theoretically, with a partner like Rand behind us, we should reach this volume. We have all the premises to do that, but we need to come up with the necessary solutions. We are very dependent on the partnerships we will succeed to set up with the banks". According to him, Aurom has major clients like the state's mint and Unicredit, and the company is looking for another partner.
Economic analyst Aurelian Dochia says that investments in gold are no competition for deposits, as the banks already have clients that have invested in gold.
Mr. Dochia told us: "Banks make money on everything they sell anyway. Gold investments will represent a new line of business, but not a very developed one. A few years ago, when gold was at 1,800 dollars a go, there was significant demand, which had caught hold. There were countries that had ATMs where you could buy gold bars. Now, when the price of gold has fallen to about 1,200 - 1,300 dollars an ounce, investors are not very confident in this product any more. Even under the circumstances, there is no doubt that gold will remain an important monetary asset, like it has always been over the years".
From the customers' point of view, it is a good thing for them to have as many investment alternatives as possible, Aurelian Dochia told us.
Compared to investments on the stock market, where the shares of the company may no longer exist 30 or 40 years later, investments in gold can be made over the very long term, according to Cristian Pârvan, the secretary general of the Association of Romanian Businesspeople (AOAR).
He told us: "The drops that have occurred lately on the gold market are not necessarily significant, considering that a dew years ago, the price of gold had increased unrealistically".
Gold will be used particularly by specialists and by those interested in that kind of transactions, such as investment funds, according to Mr. Cristian Pârvan, who hopes that Romania will continue to cooperate with the companies that mine gold, given our tradition in that sector before 1990.
Alessandro Amato, a consultant of Aurom Metal Investment, yesterday said in a conference, that the market for gold is hard to approach if there is no support from the financial market.
He said: "Our interest is to promote gold and to have it used actively in the economy, to provide services to banks, which will use our gold inventory, while we will handle the storage of gold".
Alessandro Amato says that there is interest from banks and that there is demand on our market: "I have already talked to some banks, we are hoping to arouse more interest in the area. The tradition is already serious in Romania, where there is still a small market, because there is no financial potential. It is important that physical demand exists. We haven't yet talked to the NBR, but we are very much interested in the opinion of the Romanian Central Bank considering our intention to cooperate with banks in that regard, in that regard".
For the purpose of its cooperation with Rand Refinery, Aurom will build a laboratory in Pipera and will develop IT platforms. The investment, which will not exceed a few hundred Euros, would be amortized over the course of a few years, according to Mr. Amato. The laboratory would have to be ready towards the end of the current year.
Since its creation, the South-African company has refined approximately 50,000 tons of pure gold, which represents 30% of the total quantity of gold mined in the world, since ancient history. Rand Refinery currently is currently expanding its activity to other countries in Europe as well.
The net turnover of the company in 2012 was 108.75 million dollars, and the net profit was 31.7 million dollars.
According to the representatives of the company, in 2012, the EBITDA was 43.5 million dollars, and the number of employees reached 542.
Set up in 1920, in South Africa, by the Ministry of Mines, for the purpose of refining gold from the country's mines, Rand Refinery became an independent company in 1993, when the members of the Board of Directors were elected by the shareholders of the company directly.
The current shareholders of the company are AngloGold Ashanti Limited (53%), Gold Fields Limited (35%), DRDGOLD Limited (10%) and Avgold Limited (2%).
In Eastern Europe, Rand Refinery is present through International Gold Trust.
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