Ex-Royal Mint executives launch new gold trading platform
Two former Royal Mint executives have launched a new gold trading platform in a bid to shake up the market and widen retail access to precious metals.
The trading platform, dubbed Goldwise, was launched on Tuesday, creating a new way for savers and investors to purchase gold, silver, platinum and palladium.
Unlike traditional trading, users do not have to purchase entire bars or coins, and instead can opt to purchase fractional gold starting at £5, unlocking the market to a new range of investors.
The app’s launch comes as the popularity of precious metals continues to grow, in particular with more investors taking note of gold’s coveted ‘safe haven’ status, meaning it is able to generate steady returns during times of economic and geopolitical uncertainty.
Gold has been on a record breaking rally over the past year, gaining 45.5 per cent and reaching its latest high of $5,589.30 (£4,159.30) per ounce in late January, though the yellow metal has since pared back earlier gains amid wider market turbulence.
Meanwhile, silver has gained a staggering 129.1 per cent.
Failure to modernise
Despite the growing popularity of gold the digitisation of the market has lagged behind other asset classes.
Gareth Tucker, co-founder of Goldwise, said: “Investing in most asset classes has become simple, digital and accessible, but physical precious metals have been left behind.”
Unlike online trading platforms for stocks and digital challenger banks, the gold market has failed to keep pace with investor needs, frustrating those who own the asset whilst also locking out a number of other investors.
The lack of updates has caused buyers to be forced to choose assets such as ETFs and tokenised gold which, while offering price exposure, grant no direct ownership.
Others find themselves dealing with traditional dealers, which involves an “outdated buying process” and “limited flexibility”.
Tucker said: “I was listening to customers and their frustrations, most of the frustration was why can’t I buy it on existing wealth platforms?”
“Why is all the pricing really high? We were discussing what is the actual problem here from a root cause…there isn’t infrastructure here for physical precious metals.”
The lack of updates to the gold market has forced investors to choose between products such as ETFs and tokenised gold, which offer price exposure but no direct ownership, or traditional bullion dealers.
The app also eradicates the issue of London trading hours for gold, traditionally between 8am and 5pm by offering 24/7 access to portfolios.
Solving the problem
Goldwise aims to solve the problem through its platform, which consists of three components including Goldwise Engine which covers onboarding, institutional pricing, custody and payments.
The app covers direct to consumer transactions, while its service model enables wealth platforms to offer gold to customers through the platform, enabling the platform to act as a consumer fintech and intermediary.
Customers can also opt to keep physical assets in a number of locations, including Zurich, New York and London.
While gold is the platform’s key asset, Tucker and Patel opted to include other metals to allow investors exposure to industrial uses, including palladium being used in the growing number of electric vehicles and silver being critical to the space sector.
The pair are looking to expand into other metals, such as rhodium and lithium in the future.
Iran war
Gold’s glittering run was partially ground to a halt by the Iran war as investors opted to sell off their holdings in a bid to boost capital after losing money in the stock market, particularly on oil stocks.
But Tucker and Patel, who also oversaw the scaling of Royal Mint’s precious metals division, do not foresee this to be a long-term issue.
Patel noted that a number of central banks still wish to boost their supply despite some rushing to sell, such as Turkey which is looking to bolster its defence spending.
Patel said: “The ultimate investor is a central bank.
“They keep on buying…to prop up the currency, inflation hedge. It’s always good to have a little bit allocated to gold.”
While the app is currently available for use in the UK, the pair are looking to expand and capitalise on Europe’s gold buying system in the “next nine to 12 months” before scaling across the US and Asia in order to embed itself in the global trading system.