How Is the Sale Price Determined When Clients Sell?
When clients sell part of their portfolio, a common question is whether the price is based on the physical market price or the paper (futures/spot) price.
When we purchase physical bars or coins directly from clients, there are two possible routes:
- The metal is sold into the wholesale market, or
- The metal is taken onto our own balance sheet.
Both routes involve unavoidable real-world costs, including:
- Hedging costs through the futures market to manage price exposure, where margin requirements have risen materially.
- Cost of capital, allowing us to settle promptly with clients, which has increased significantly in line with higher metal lease rates.
Taking all these factors into account, the pricing we offer is generally regarded as extremely competitive, and very often among the best available in the marketplace. This is reflected in the number of clients who move to us from competing providers.
How Should Clients Estimate Portfolio Value Amid Price Divergence?
With increasing divergence between paper and physical prices, clients should use futures prices as a base valuation reference.
When it comes time to sell, there are several execution options available. We work closely with clients to advise, structure, and time sales appropriately based on market conditions and individual goals.
Why Futures Prices Are Used as the Benchmark
In reality, all global commodity and precious-metals markets are structured around futures pricing. This is not a preference — it is a necessity.
Futures markets provide the common global reference point relied upon by:
- Refineries and mints
- International wholesalers
- Mining companies producing doré
- Logistics and insurance providers
These markets enable participants to hedge risk, manage inventory, and forward-price production. Without a transparent futures benchmark, the global physical market could not function efficiently.
For this reason, prices displayed on our website reflect live futures prices, which serve as the global reference point.
Physical prices are then derived from this benchmark, adjusted for real-world factors such as:
- Product availability
- Fabrication and minting costs
- Logistics and insurance
- Lease and funding costs
- Prevailing physical supply-and-demand conditions
The key distinction to understand is simple:
Futures prices set the reference. Physical premiums reflect reality.
Will the Pricing Model Evolve if Supply Constraints Worsen?
Yes. This is an issue we actively monitor and regularly reassess. As market conditions evolve, pricing models must adapt to reflect changing physical supply dynamics.
Leadership View: The UK, US, and Precious Metals Markets
From a leadership perspective, the Western financial system—alongside the CME and LBMA exchanges—operates on a highly leveraged, fractionalised framework.
Modern markets have moved beyond traditional fractional-reserve banking into an expansive derivatives-based system, involving:
- Futures and forward contracts
- Options and synthetic instruments
- Claims of perceived ownership rather than direct title
- Shadow-banking exposure
- Exchange mechanisms supported by leverage ratios often exceeding 50:1
When assessed holistically, there are conservatively 300 paper claims for every single physical ounce, with many analyses placing the figure closer to 500:1.
Such leverage is structurally unsustainable. As confidence in paper claims erodes, global markets are already shifting toward physical accumulation and clear title ownership.
In this environment, force majeure risk is no longer theoretical—it is an increasingly realistic outcome of a system stretched far beyond its physical foundation.
Silver as a Systemic Risk
There is growing concern around over-leverage in the paper silver market, particularly in London. Leadership views this as a serious and escalating risk.
Silver is increasingly proving to be the straw that could break the camel’s back.
This is a genuine systemic concern, which is why we continue to build physical inventories as rapidly as possible, while ensuring client demand can be met responsibly.
Impact of a Major Western Financial Disruption
In a scenario involving severe financial disruption in Western markets, the primary impact for clients would be higher physical premiums and reduced availability.
In simple terms:
The main risk is not access — it is price.
Buy while supply remains available.
Vault Security, Access, and Settlement
Such scenarios would not affect vault security, asset access, or ownership rights. Client assets remain fully protected, with clear legal title.
Operational Continuity During Extreme Market Stress
During periods of extreme volatility, we may temporarily suspend website activity as a prudent risk-management measure.
This does not affect client holdings in any way.
Client assets:
- Remain fully protected
- Cannot be accessed, altered, or encumbered
- Retain clear legal title at all times
Our priority in such circumstances is orderly markets, operational integrity, and the absolute safeguarding of client assets.