Wednesday, September 14, 2011

Where does Gold Go from Here? (Transcript, Video)

By Bob DeMarco
All American Investor


gold prices have been giving up ground as stocks have pushed higher despite lingering fears about europe's debt crisis and the health of the u.s. economy. all that you know. hereis what gold is doing today, down $5 but it has been on a tear as you well know especially this year topping out above $1900.

cnbc's bob pisani is at the new york stock exchange witha special guest. bob?

reporter: bill, etfs have been popular for a while but some firms are starting to bet that owning physical gold is popular as well. here is one of the guys, the ceo of gold bullion international. we have known that private vaulting which is what this is for the big guys has been around for a long time.

you think private gold vaulting for the little guy is going to become popular in the future. why? private gold vaulting has traditionally limited the ultra high net worth of our society. it is hard to buy physical gold, have it stored properly and insured so our company is using technology and making it available to everybody.

we all know about gold etfs, a trust backed by gold, how is this different and why do you think this twist on it is going to be popular?

it's more the idea of choice. we want to give investors the ability to buy the physical asset. and we think if we can make it as easy as buying a stock or bond they'll always choose the hard assets because it is a safer product.

briefly explain how this works. can i buy can i buy gold bars, coins, how does it work?

sure. from a product perspective you can buy gold bars, gold coins and store them at different locations. we offer zurich, london, new york, utah. you can work through a financial adviser or call us.

you want to buy physical gold as easily as a stock or bond. exactly. why is the process so

i went on some gold buying sites, gold coin sites, they charge 5%, 10% premiums to buy these coins. why is the bid -- why is it so hard? a great question. it's not transparent. physical gold does not trade on an exchange. it is an over-the-counter market and that takes away transparency. what our model is we get a client order, we bid it out to a market of dealers. whatever a dealer bids the best price, we'll trade with that dealer. that's how we ensure the best price for our clients.

you're trying to get gold used as collateral in a lot of other businesses. basically explain what you are doing with the casino industry.

in a casino industry, the practice of giving out naked credit to clients. you come to the casino they give you credit if you are a high rolling gambler. oftentimes that credit is unsecured so we've created a process for that industry where investors can purchase gold from our services and use it as collateral in gambling so the casino is protected. they can get the collateral if the gambler doesn't pay the debt. the gambler likes the flexibility.

very good. we'll have you back to talk about this more. bullion thanks very much.

thank you. bill,
back to you. thanks very much, bob.


< span class="Apple-style-span" style="font-size: large;">Original content Bob DeMarco, All American Investor