Stankevicius MGM tells about gold
The biggest gold reserves are in US, Europe and Asia. In 2016, the largest gold production of 455 metric tons was done in China and yet the very wealthy foreign investors are going after African countries to purchase gold.
Ghana, Uganda, Kenya, Guinea, Sierra Leone and Cameroon are well known spots for foreign investors to buy gold from local gold sellers.
High LBMA prices hitting over $40.000 per kg are pretty hard to make profit in reselling physical gold unless you are into electronic trading but if you are not- buying a low-priced physical gold from Africa and reselling it in Dubai, Hong Kong or Shanghai can make you a fortune. That's why private companies and individuals are rushing to Africa to get their piece of gold at massively huge LBMA discount rate.
Private companies are taking huge risks in doing FOB deals with local gold sellers, risking their lives and their wealth. African gold has been a dream for foreign investors for a long time. Dubai buyers are making losses in millions of dollars on fake Africa-Dubai CIF deals, but yet they believe they can strike a lifetime deal with a genuine African gold seller because there have been success stories.
What can be more attractive to an investor if not a quick ROI in profits of tens and hundreds of millions of dollars. Huge buyers from Hong Kong, China and Dubai are giving 10 metric ton of gold orders to private consulting companies. Transaction are in billions of dollars. Seems like an easy money to make but it's not.
There is a massive gap between a foreign buyer and an African seller. There is a huge cultural difference, different mindsets and unbelievable business term expectations leading to extremely hard negotiations.
Some people think that doing business between West and East is difficult, but when both West and East tries to do business with the South, that's when hard-to-achieve turns into close-to-impossible.
Dealing in gold with Africa is something very unique, hard, requires a lot of patience and yet somehow it is amazing how foreign buyers leverage gold deals.
Everybody wants gold in Africa because prices are cheaper and profits are higher but so is criminal activity and fraud. Foreign investors are losing millions to fraud every month.
Everybody knows that Africa holds huge business opportunities in trade, especially when it comes to gold, diamonds and oil. The hardest part is capturing that opportunity. It's a tough challenge. As we know new opportunities come with new challenges and new challenges require new skills and new knowledge.
That's where local and global gold consulting firms come in. Having presence in majority of gold dealing countries in Africa, consulting companies offer strong due diligence for foreign gold buyers scanning local gold sellers' backgrounds. Some consulting companies have even partnered with verified gold sellers to provide gold supply from Africa.
Stankevicius Management Consulting is one of the companies offering local gold sellers' due diligence services for foreign investors.
"Clients send us hundreds of contracts a week to go through and check their legitimacy. This is not a typical consulting business because the stakes are very high. Every deal a client brings to the table is worth millions and sometimes even billions of dollars. Every signature client is requested to sign can cost them their fortune. That's why protection is a very important issue and that's why gold consulting companies have a huge responsibility ",- says Paulius Stankevicius, Founder & CEO of Stankevicius Management Consulting.
The demand is huge. Gold business is probably one in the world that doesn't require marketing because if you have gold, investors are going to buy it in a blink of an eye. Consulting company's job to search and find the right seller can become frustrating and misleading.
According to Stankevicius MBU Group the demand for gold is only growing and it could lead LBMA prices jumping up to $1.500 per oz. Nor China or US and neither Europe would ever sell gold at a discount rate, but Africa and South America will do that and that's where the foreign investors will be visiting the most in the next 5 years.