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Gold Trading?

>> Sunday, January 23, 2011

Recently, I was approached for the third time about gold trading. Giving in to the curiosity finally, I asked further what exactly was this fantastic investment opportunity.

I was told it was a company called Genneva Pte Ltd. So I went to google it and this was it's main website. Apparently, it was incorporated in 2008, so I guess I am a bit late in finding out about this company as it has been around for about 2 years.

The sole purpose of the company I suppose is the buy back programme. Where a customer buys a certain amount of gold (eg 1kg) at "market rate" with a 1.5% discount. The physical gold will be given to customer and Genneva will buy back that physical gold at ORIGINAL "market rate" without the discount 30 days later.

Therefore, it is a guaranteed 1.5% profit within 30 days! On a per annum basis, that is a return of about 18%! Seems too good to be true. In fact, looking through some literature online, they used to give 2.5% and 2% returns previously. Maybe the company is reaching an unsustainable limit already.

In my opinion, it sounds like a ponzi scheme. Well, I suppose some customers are indeed enjoying the returns, as with how most ponzi scheme initially works out, until one fine day, the company falls like a stack of cards.

Of course, many may argue that at least one is indeed holding on to the physical gold in such an event. But I suppose some hard questions need to be answered first.
1. How authentic is the physical gold in question? i.e. the purity, certification, weight, etc
2. Market rate is based on internationally accepted price or determined solely by the company?
Everything may be fairly sustainable, so long as gold prices keep going up, though I do not think prices are moving up at 1.5% every month.

Well, I hold no grudges with the Company, personally I am just not convinced. There does not seem to have much transparency as to the Company's organisation.

If it indeed is true, congrats for the customers who are getting the returns. If it does turn out to be a scam, again congrats to the customers who managed to take profit before it folds and unfortunately for those who did not, congrats to the directors of the Company for a carrying out a successful scheme.

1 comments:

AK71 January 24, 2011 at 12:06 AM  

Hi Lau,

For anyone who want to trade or invest in gold, I would suggest going to UOB to start an account. However, at this juncture, I am more excited about silver than gold.

We can trust Uncle Wee. ;)

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