The luxury industry's interest in purchasing old gold
The desire for gold has never been stronger, and its price is on the rise. There are multiple reasons as to why recycling residual gold from industrial waste is not just necessary, but attractive. The family-run business C. Hafner has been in this industry for 170 years, and Philipp Reisert, the company's boss, shares his thoughts on their customers who are drawn to this precious metal.
Their product is essentially pure gold. They achieve this by collecting waste containing precious metals across Europe and breaking it down into its individual components - gold, silver, platinum, or palladium, for instance. This decomposition process is either chemical or pyrolytic, depending on the quality of the waste. The remaining metals, like copper or zinc, are forwarded to smelters to be recycled.
How do they gather these materials?
Philipp Reisert: It's industrial waste, leftovers from goldsmiths, and even those gold buyers you see on the street. Our suppliers send this waste to us. They choose us because we handle logistics. Since these materials are so valuable, this is an important factor.
With high gold prices, more recycling is incentivized since it becomes more worthwhile for waste-producing companies to melt down their precious metal. Additionally, private individuals are more inclined to sell their old gold.
Does the increasing cost affect you negatively?
It sure does in terms of purchasing. However, we always ensure our precious metal balance sheet is balanced by physically hedging our positions. When I buy a kilogram, I sell a kilo at the same time. Therefore, the gold price itself doesn't influence our buying and selling. But it does drive the business, and high volatility is good for the margin.
What's the demand like for you?
It's a complex question. Demand is high, which makes sense given the rising prices. However, certain industries, like dentistry and medical products, are significantly impacted by high gold prices. This could lead to an increased preference for alternatives. At present, most of the demand we see is stemming from the investment sector.
Your focus is on recycled precious metal as opposed to mine material. Why is that significant?
It's due to the demands of their customers. They primarily deal with luxury goods, and brands like Richmond, Kering, and Louis Vuitton place great importance on the transparency of their supply chain. As these items have a strong association with fame, desirability, and stories, any issues concerning the supply chain could be catastrophic for the brand. They're more comfortable with the gold that comes from recycled sources.
You have an understanding of the myth surrounding gold?
It's a fascinating myth that has persisted for over three thousand years, used for jewelry and coinage. Gold's value stems from its scarcity, even though there's plenty in circulation - making it a popular investment in times of uncertainty. While it's predominantly psychological, it can play a role in wealth creation on the stock market.
Nils Kreimeier talked with Philipp Reisert.
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The increase in gold price also encourages more gold recycling, making it more profitable for waste-producing companies to melt down their precious metal. Due to the high demand for gold and its rising price, luxury brands like Richmond, Kering, and Louis Vuitton prefer using recycled gold for their products, as it aligns with their customers' desire for ethical and transparent sourcing.
Source: www.ntv.de
