Buyer’s risk, BG
The sellers often requires a BG, bank guarantee. The BG should also often be issued by a top 5 or 10 bank.
BGs are a no, no. No way that you should enter in any type of negotiation when that is required. Normally such offers come with very good prices. The offers are also based on monthly deliveries of several 100 kilo of gold dores per month.
The buyers are often secured a delivery with a 2% PB, performance bond.
If you are interested to test the honesty of the seller the easiest way is to stipulate the activated by the BG. The thought behind this is that if there is a bank able to give a performance bond the bank has secured themselves that the gold will be delivered and that the seller is real.
The alternative would be that the 2% PB makes the BG operational. The question you have to ask yourself, “How long will I wait until there will be a PB?”. You will be completely in the hands of the seller. In best case the seller will use the BG to secure the delivery.
In worst case this is the last you see of your money.
As many of us know there is a system called PPP. The idea is that a cash backed BG can be entered into a trading system where you have extremely high return of your money each week for a period of 40 weeks.
The BG is in most cases thought to be entered into such system. Thus it requires a large quantity of gold to be sold against the BG. The seller is more interested in an interest of 15% per week than delivering any gold.
The likelyhood that the seller runs into another fraudster promising this high return to get hold of a BG and that the seller of gold will sit with a loss is high. Your loss.
The real PPP are based on invitation only and a cash-backed BG of minimum 100 million USD. The interest is also higher and can not be determined in advance. Now we have left the crash course in avoiding fraudulent sellers of gold.
Anyhow, BG is a no no.
