The precious metals market is huge. It is also an interesting one where customers will very likely become suppliers in the same market. This is because most of the products sold in the market are not consumed, but rather kept as savings or as insurance against economic and financial uncertainty.
Realizing this, Nubex has developed an exchange platform, specially designed for precious metal products, allowing sellers to meet buyers for a price discovery, and help facilitate direct transactions between them.
Although typical with other products, this platform is uncommon or even non-existent within the precious metals market. The major difference between Nubex exchange and other platforms is that items are required to be physically delivered to our center before sellers can sell them on the exchange.
Nubex will then verify and authenticate the items, to protect buyers from forgeries or fakes.
The exchange platform will handle:
1) Electronic Trading Platforms,
2) Fulfilment centres (storage),
4) Payment processing and
Nubex Exchange creates value to customers by providing liquidity to the market, allowing them to easily trade precious metals via the platform, offering the lowest premium and the smallest spread compared to other bullion dealers.
On the buyer’s side: The exchange will inherit Nubex’s customer base, with more than 13,000 registered customers to date. Our core consumers, the gold bugs, are price-sensitive clients who will benefit greatly from the newly introduced platform.
The major highlight on the buyer’s side is the aggregation of supply from the secondary market, providing the opportunity for buyers to discover lower prices from a variety of sellers. In the bullion market where demand is extremely elastic, the exchange will be able to attract new buyers. In addition, the abundance of sellers will increase the variety of products, and, coupled with our track record since 2009, we are confident the exchange will gain high traction and increase Nubex’s market share.
On the seller’s side: Usually, precious metals are sold to bullion stores or goldsmiths that offer far lower than the spot price. Nubex Exchange on the other hand would enable sellers to enjoy higher gains by allowing them to set their own preferred price.
We’re expecting the early sellers in the exchange to come from Nubex’s customer base. From our record, customers’ sell back rate makes up almost 50% of Nubex’s total purchases. Over time, we believe sellers (i.e. gold bugs, traders, companies, and manufacturers) will be easily lured to our platform, as it allows them to sell at a higher price.
Solving the problem of liquidity: When Nubex opens the first gold exchange in Singapore, a seller from Singapore can simply sell his gold to a buyer in Malaysia, and vice versa, without having to bear international shipping fees, or travel and insurance costs.
The seller will also save a lot of time compared to traditional e-commerce delivery services. This is all possible due to a unique feature embedded in the exchange platform, developed by Nubex: the swap system.
The key point here is solving the issue of mobility; gold can now be traded without the hassle of moving cross-border between countries. Every additional exchange in a new country will also provide extra liquidity to the entire market. This can be achieved with our swap system, whereby liquidity from one exchange can be accumulated with the liquidity from other exchanges.
The more countries with our presence, the better the overall market will become due to shared liquidity. Therefore, Nubex’s expansion is not just an option; it’s a prerequisite for the market to work at its full potential.