Monday, 28th February 2005 (3122 views)

Standard Bank has announced that it is looking into launching a new hedging facility, designed specifically for jewellers.

Jeffrey Rhodes from the group's precious metals division unveiled the plans at the third Dubai City of Gold conference, according to Mineweb.

According to Mr Rhodes, the bank has been working with key players in Dubai's gold market to develop a new financing tool, which has all the positive features of a hedging instrument and is based on new technology.

A number of parameters have been set down which the plan must meet and the partners plan to roll out the new system within the next few months.

Mr Rhodes claimed that the amount of newly mined gold each year is nearly matched by gold jewellery consumption.

He called on wholesalers and retailers in this market to be more concerned with generating profit from the difference between "the making charge" they pay to jewellery manufacturers and the money generated from jewellery sales.

According to Mr Rhodes, this is more important than the underlying price of gold bullion.

 

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