Quantum Mutual Fund does purity test on gold ETF holding
Tue, 29 May 2012 23:21:26 -0600
The fund house conducted purity test for all the gold held in Quantum Gold Fund
Quantum Mutual Fund recently used the services of a certification agency to test the purity of all gold bars held under its gold exchange-traded fund - Quantum Gold Fund.
Continuing with the tradition of adding value to the investor, Quantum Mutual Fund ensures the safety and security of the gold, the fund house conducted purity test for all the gold held in Quantum Gold Fund. These tests were done for a second consecutive year and serve in addition to the purity certification provided by the refiners/assayers.
Quantum Gold Fund buys physical gold, which is sourced only from LBMA-authorised refineries. Each imported gold bar is accompanied by purity certificate issued by the assayer and is in-line with strict good delivery norms formulated by Quantum, based on the norms prescribed by LBMA.
However, considering that investors are still wary of the purity of the physical gold backing Gold ETFs, Quantum Mutual Fund, in a bid to reinstate the purity of its gold bars conducted an – Assaying Test – at its vaults.
Expressing the intent behind such an activity, Chirag Mehta, fund manager (commodities), said: “Investors have repeatedly expressed concerns regarding the purity of the gold backing Gold ETFs. Going by their own experience or learning from someone else's experience of getting caught with impure physical gold/jewellery which in turn yielded a lower resale value; it is understandable that investors are still hesitant to believe in the purity of gold and the convenience of ETFs. Hence, we decided to give investors a reason they couldn't refute. Last year we subjected the physical gold held by the Quantum Gold Fund to a purity test. This year again, in a bid to re-affirm our commitment to purity, we have conducted the same exercise. And we are glad to announce that all the gold held in Quantum Gold ETF has been tested and certified to be of 99.50 purity (0.995 fineness) and above.”
These tests were conducted by Quantum Equipment Company Private at the vaults where the gold is stored. The gold assaying i.e., purity testing was done using the Karat meter Mistral, a precious metals analyzer machine.
This method uses micro spot XRF technology to determine the percentage of precious metal present. It is a fast, precise and nondestructive method for Karat determination.
Gold is not only considered to be an auspicious metal in India, but helps as an effective portfolio diversifier. But the concern for purity has always made investors hesitant to invest in any form of gold, other than ornamental jewellery.
Adulteration of gold by adding other elements to it cost the customer dearly. Not only does the customer have to bear the cost of the (supposed) gold, he also has to incur the loss in value when he looks to sell the gold he owns.
Gold ETFs propose a surety in the purity of gold, while also offering the convenience of transaction. Further tests such as the ones conducted by Quantum, will only ascertain that investors place some more faith in gold as an investment vehicle.
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