RISK FACTORS AND DISCLOSURE STATEMENT

 

The ownership of physical precious metals for investment purposes can be made through various vehicles. The following represents some but not all areas of risk and costs that are inherent with the various methods of ownership of physical precious metals which require consideration and evaluation by prospective investors. Buyer acknowledges that each transaction is a spot metal transaction and not a futures contract. Buyer has the intent, but not the obligation to take delivery of the metals. The customer chooses whether to pay in full or to finance the purchase, but must pay in full if they wish to take delivery of metals.

 

Market Fluctuations and Risk of Loss

 

As with any investment, the price of precious metals change daily and there are absolutely no guarantees that the purchase price will ever be exceeded in order to provide the opportunity of a higher selling price. Upon entering the market, the risk of loss is the client’s. Only those individuals who are capable of sustaining a financial loss should consider purchasing precious metal investments.

 

Stagnation and Opportunity Cost

 

Investment dollars put into physical precious metals can only be converted back to cash by selling. Therefore there is a cost which is the loss of interest which the investment dollars would earn if left in interest bearing instruments. In order to offset the loss of interest income, the price must move greater than the percentage of interest income forfeited.

 

Broker Fees

 

Brokerage firms are in business to make money by providing their clients with various methods of owning physical precious metal products and the services related to these specific markets. In order for a precious metal purchase to become profitable, the price must increase sufficiently enough to exceed the total cost of the product, including the broker’s fees. This is commonly referred to as the break-even price. The commission that we charge is 3% of the total metal value (round term). In other words, no comissions are charged on the selling side, but only on the buying side.

 

Delivery Charges

 

Physical precious metals can be either delivered directly to the client’s designated point of delivery or to a recognized depository which provides insured non-segregated storage. Most home deliveries take place via drop shipment from recognized depositories via registered insured mail and are subject to handling fees, postage and insurance. In order to determine these fees, consult with your broker.

 

Financing

 

Most recognized depositories also provide financing services which allow clients to borrow up to 80% of the value of their precious metals products which are also in the non-segregated depository facilities of the lending institution. Interest rates and various fees will vary from one institution to another. Consult your broker about all costs and fees associated with financing investments. All clients wishing to make use of financing need to un-derstand the following: 1). Should the value of the product decline, the lending institution reserves the right to demand either a principal loan reduction or the provision of additional acceptable collateral. 2). The lending institution also reserves the right to liquidate all or part of the product acting as collateral for the lien without any prior notice to the client. 3). The ongoing cost of borrowing (interest charges and fees) will increase the break-even of the product purchased or being used to support collateral for the loan. Therefore, precious metals purchased with the use of financing must increase in price sufficiently enough to offset the cost of borrowing before an actual profit can be generated by selling the product. The interest rate charged by GPMT on any financed metal is 4½% above the prevailing prime rate. GPMT also charges a one time $200.00 account opening fee. 4). Increased risk is created by debt obligation of borrower to the lending institution. There are no guarantees that clients will be able to resell their precious metals for an amount equal to or greater than the unpaid balance due to the lending institution and borrower is responsible for any and all deficiencies. It is therefore possible to lose or gain more than the amount of the purchaser’s initial investment when financing is used.

 

Liquidity

 

Precious metal owners should note that on any given day commodity exchange trading in categories of precious metals may be restricted, suspended or halted entirely for any number of reasons. When such situations occur, it may be difficult or impossible to purchase or sell physical precious metals or to know when the exchange market will resume activity. Although the company makes every effort as a broker dealer to provide our clients with the ability to purchase and sell, we cannot guarantee access to markets for either purpose. Additionally, product purchased from or through the firm when sold to any third party, may be required by that third party to subject the precious metals to inspection and assay at the owner’s expense.

 

Taxes

 

As tax laws are constantly changing, we suggest you consult with your tax advisor as to how current tax laws may affect the outcome of contemplated purchases or sales before entering into any agreement to purchase precious metals. Company brokers will be available to discuss the type of transaction under consideration with the tax advisors of our clients.

 

Brokers

 

The brokers of the company are Independent Contractors to the company. Therefore, the company assumes no responsibility to the customer for recommendations of the purchase or sale of precious metals made by the brokers, or their regulatory history and from time to time may inadvertently retain a contractor who has had a past regulatory problem. The customer alone is responsible for all decisions made by him/her and acknowledges by signing this document that the customer is not making such decisions based on representations or recommendations made by the broker of the company.

 

Arbitration with Governing Law and Venue

 

The parties agree that any disputes relating to this account will be submitted to binding arbitration. The venue for any such arbitration shall be exclusive in the State of Delaware and all parties agree that any arbitration award entered shall be binding and convertible to a State of Delaware judgement subject to the laws of the State of Delaware and further subject to any modifications thereof permissible thereunder. The parties hereby accordingly waive their right to any other remedy or to proceed with any court actions and further hereby waive jurisdiction and venue.

 

This account and the activities contemplated hereunder shall be governed by the substantive and procedural laws of the State of Delaware without respect to Delaware conflict law, rules and venues of any dispute resolution shall likewise be in jj conflict of law rules.

 

Customer Acknowledgements

 

I understand that...

 

1.     Each transaction made is a purchase or sale of a Physical Precious Metals product for immediate delivery and is not a Futures Contract, Option on a Futures Contract or Securities transaction.

 

2.     I may choose to pay for my purchase in full or to use Collateralized Financing.

 

3.     Purchases made for Drop Shipment Home Delivery must be paid in full, including all related costs prior to shipping.

 

4.     I have the intent, but not the obligation to take home delivery.

 

5.     I understand that all conversations between Global Precious Metals Trading and myself may be recorded.

 

6.      I understand that I may rescind this Agreement within three (3) business days. (Saturday’s count). The three (3) day rescission period begins

 

the day after this Agreement is signed. To cancel, please contact our office in writing at Global Precious Metals Trading, 2 Alhambra Plaza Suite 1220, Coral Gables, Florida 33134

 

7.     I understand that all orders (purchase or sale), after your state required rescission period has lapsed. placed by the customer with Global Precious Metals Trading are final and therefore are not subject to cancelation or modification, unless mutually agreed to in writing by the customer and Global Precious Metals Trading.

You are not obligated to pay any money unless you sign this Agreement and return it to Global Precious Metals Trading.

I have read and understand the foregoing risk factors and disclosures related to investing in precious metal investments.  

YOUR NAME:

DATE: 23 Feb 2012

GLOBAL PRECIOUS METALS TRADING
2 Alhambra Plaza, Suite 1220 • Coral Gables, Florida 33134  •   Phone  305.569.0044		•  Fax 305.569.0042
	www.GPMT.com