If you are new to buying Bullion you should familiarize yourself with the differences between hallmarks and makers marks. Most people do not realize that there are differences and if you buy the wrong one you could leave yourself in a big mess. A Makers Mark is usually done by a Refinery and a Hallmark is done by a Certified Mint or Certified Refinery that is approved to make World Currency.
The Certified Hallmarks will be stamped on the bar of gold and a certificate number is etched into the bar with the purity rate.
The Certificate Number is like the title or tracking number that gives the owner and others the ability to authenticate the bar. When this Certification Number is put on the bar the gold is considered Allocated Gold because it is now considered Global Currency.
The Purity Rate is to show the purity of the bar against 1000% of purity. Meaning that the purity of 999.95, also called four nines, is understood to be 999.95 / 1000. You might see older bars that show 995 which means it is 995.00 / 1000. This would indicate an adjustment in value downward because the price indexes are bases on 999.95 which is considered 24 ct. Pure Gold.
Makers Marks are generally done the same way and their process is done before the gold is shipped to a Bullion Maker or Mint. The Makers Mark is simply a mark put on the bar that is usually their logo and a bar number, not a certification number.
A bar that has a Makers Mark on it is certifying to the Mint or Bullion Maker that the gold has been refined by them and that they stand behind the purity, weight and quality of the bar.
The difference between private refining and certified refining is the most critical point that can be made at this point. Certified Refineries and Mints have the ability to make True World Gold Currency where as the private refiners do not.
Mints are approved and regulated by governments. Meaning the Canadian Gold Maple Leaf is struck into a coin form in the Canadian Mint under the government of Canada. This is just like the US American Gold Eagle and government coinage. All Mint Struck Currencies are the owned property as currency by their perspective governments and can be called due by those governments at anytime.
Please note that those governments have Trade Treaties with each other. You should be aware of this. Meaning if you are in the US and you buy Canadian Currency and the government of Canada calls their currency due then the US Government could force Americans to turn in the Canadian coins. Please also be aware that there is a legal limit to the amount of Foreign Government Issued Currency you are allowed to hold as personal property.
This goes for the US government as well. Meaning if you are in the US and the federal government calls their currency due you have to turn it in. You should do your own research on this. The US is required to give 10% of the struck value of their currency to the person turning it in. Which means that if you bought a US 91% pure gold coin for $3,000 and it has a struck value of $10 the US Government is required to buy it back from you for $1.
Please understand that our goal is not to discourage you from buying gold. We want to make you aware of some of the pit falls and issues related to the industry. We cannot predict the likelihood of this taking place in the future. If your goal is to buy gold to hedge against inflation, wouldn’t it be safe to say converting your US Greenback Dollars into US Gold Coins isn’t going to do what you are looking for it to do?
If you do buy coins it can be a good investment if you are a coin collector. But remember that if you need to cash them in you will have to work with a coin dealer or appraiser to establish the value. You will try to get them appraised at the level of a collectible to get the highest value. Then you will have to find another coin buyer to buy them and haggle to what you can get for them. This could be a challenge if you have a $3000 coin and are trying to buy a loaf of bread.
So you are going to buy bars instead of coins. That is a very wise choice. But what bars you buy can get you in a pickle.
The same obstacles you could encounter with coins is a possibility with the bars as well. If you buy gold bars that are not bearing a Global Gold Currency Hallmark you could find yourself stuck with gold that is not able to be used or cashed in.
Let’s say you are in the US and you buy a gram bar of gold from a Private Mint.
A private Mint is a Mint that is not recognized as a True Currency and that has not been hallmarked and registered with the London Bullion Makers Association.
If you bought such a bar of gold you would have to get it assayed by an approved refinery. To assay gold the approved refiner would melt down the bar, regardless of how pretty the packaging is, smelt and test (assay) the bar and give you a value minus their fee and minus a little weight loss because the bar had to be physically melted down and in the process lost physical weight from the process.
Not to force the issue but having the gold assayed takes a little while to get done. So if you are trying to buy a loaf of bread and a gallon of milk, this won’t work either.
Again we are not trying to discourage you from buying gold, we want you to be educated in the process so that you can make sound and solid choices of what you are buying.
You should know that these private mints with the Private Hallmarks are not going to tell you this. Even if they are “JVed” with the miner and have this grand operation of merchants, if the hallmark (which is really a Makers Mark) is all that they say it is, than you have to ask why is it not registered with the London Bullion Makers Association to make it a True Currency?
The key thing to know is that if the Hallmark on the gold is not an LBMA approved hallmark, then you don’t have a True Gold Currency. It doesn’t matter where or who the refiner is. Even if it is a Swiss Refiner, it still needs to be a recognized LBMA registered hallmark.
With True Global Currency it can be cashed in at any bank if you do not tamper with the seal on it or open the authentication packaging. You don’t need to have it assayed. You don’t need a dealer or appraiser. It spends like true cash. Global Gold Cash, if you will.
by Jean Meadows
Safeguard Consulting
Safeguard Consulting
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