For me, it was more or less by coincidence. I started out in commodities trading in Vienna - primarily with non-ferrous and precious metals in the form of derivatives. And the more you get to know the international markets and immerse yourself in them, the more you come into contact with gold. At some point, an acquaintance asked if I would be interested in setting up a precious metals trading business because I had developed the expertise and contacts in the industry. I joined Philoro Schweiz AG in May 2020 and, as trading manager, took over the operations of the existing precious metals trading business and used my years of experience to develop it further. When I started, a troy ounce cost 330 dollars.

Exactly. Incidentally, the market is relatively limited for a gold trader in Europe. If you want to become a gold trader in India and China today, it's easier.

You just have to look at where the gold flows are currently going. Mainly to China and India, which are two huge markets. If you are active in the gold trade, you cannot avoid these countries. Many Chinese and Indians from this sector are also active in Dubai.

I have also employed a couple of people in my life. Of course, you need to have commercial expertise. But curiousity and a cosmopolitan outlook were primarily important to me. Because in gold trading in particular, you have to be able to work with a wide variety of cultures. You need to be able to grasp things quickly, be adaptable and trustworthy. And you have to have a certain amount of risk tolerance.

In principle, we have to distinguish between two streams: The one from the mines to the refinery and the one from the refinery to the buyers. In the second case, you simply have to make sure that there are enough gold bars or gold coins in the relevant sales outlets. But it is also important for traders to fly to the mines and take a look at the supply chain. Of course, you don't do that very often. Once this is on track, you then check the payment flow and the material supplied. That takes quite a lot of time.

For bars and coins, we mainly work with regular customers. Recently, however, there has been an increasing number of young people investing in gold – especially in coins or bars of 10 or 100 grams.

When we talk about refined gold, which is 99.99 per cent pure and is bought in the West by private individuals or banks, it comes from refineries that are accredited by the London Bullion Market Association. Four very well-known refineries are located in Switzerland, a few in Germany, and the Vienna-based philoro is not yet accredited. The situation is different for raw gold, which is found in deposits in North America, South America, very often Africa, Indonesia and Australia. As a trader, you primarily look for those countries and continents with which you are more comfortable. After all, business requires trust, and there are a lot of interlocking factors. That's why you're glad to have regular suppliers or a regular mine.

That is correct. But I myself and my colleagues and trading partners do not focus on Russia and China. In the case of China, the country itself is an extreme end consumer, and hardly supplies gold to anywhere else – most likely to Hong Kong. And in the case of Russia, this has to do with sanctions. Russia has also increased the central bank's gold reserves. I personally haven't really come across Russian gold in the last three or four years. Instead, there have been offers from Africa, Latin America or mining projects in Canada.

There are a lot of scammers, as we say, in our industry. Because of the high value of gold, many crooks try to profit from it. You have to be very careful. A lawyer from Latin America once contacted me for months and invited me to visit his mine, which was supposedly already in production. He didn't want to send me any documents or licences. Eventually he did send them. But the price seemed too favourable to me, something didn't fit. But when I was on holiday in Latin America, I suggested flying to the mine at short notice. We flew in very small aeroplanes – the lawyer, two other locals and me. Then we travelled another four hours by car over red roads and deepest thickets into the jungle and across a river on a raft made of tree trunks. And then we came to a field where nothing had been mined, just a little digging like in ancient excavations. There was nothing there, no machine. In the end, it turned out that this mine was buying in the gold, in other words illegal gold, which they were trying to export via their concession. That might work once. The second time, the customs authorities take action and the mine is closed.

Let me put it this way: it is in fact always possible. We know that people are creative, and if the price is right, they will come up with something. And since China, India, the United Arab Emirates and even Turkey, for example, do not support Western sanctions, they can import gold from Russia directly. India's jewellery industry in particular has a huge demand and does not necessarily need gold certified by London. There is probably a flow of gold going directly to these jewellery manufacturers in India and Turkey. And probably at a better price than Australian or Canadian gold. I can also well imagine Russian gold flowing to Dubai to the Gold Souk, where tens of tonnes of jewellery are stored. And of course China: Chinese refineries may also buy the raw gold, refine it themselves and deliver it back to their exchange in Shanghai. This is probably why no gold has travelled from Russia to Western Europe, as there is no reason for it to flow in this direction.

That is entirely possible. It will then be relabelled in Armenia and probably sold to Dubai, Turkey or India. A refinery in Switzerland would be suspicious as to where Armenia suddenly has so much gold. That's probably why it doesn't flow to Western Europe.

You're not imagining it to be too easy. A one-kilogram bar is the size of an iPhone. So it's easy to pocket somewhere. But I know from Africa that most of the gold, if it is to escape controls, is collected by businessmen from China or India in private jets and sometimes even paid for in cash. This is tolerated and probably has something to do with corruption. It's common practice in Africa. I can well imagine that it is the same in other countries such as Russia. If a Western European refinery were to import sanctioned gold, which is prevented by customs and other precautions, it would be excluded from the London Association. Incidentally, some Russian gold refineries were also accredited in London before the war.

I'm relatively certain of this, because these quantities are also obtained from other sources. Incidentally, it is often the case that it is also recycled gold, so melted down jewellery. Of course, it can happen that a jeweller in Turkey, for example, makes a necklace from Russian gold and sells it to Europe, where it may be melted down at some point. But we are not talking about large volumes here.

It may not be transparent for outsiders. But the players involved in the supply chain know exactly where the gold comes from, and it's not for nothing that we have these supply chain laws in the EU and Switzerland. And as I said earlier: If Hungary, for example, were to suddenly export massive amounts of gold, people would immediately ask where the gold comes from due to the high quality and origin standards. So it's not that simple and not that intransparent.

It is dangerous and cost-intensive when gold has been produced and this gold has to be transported. In Latin America, for example, there are specialised security companies that fetch the gold from the remote mines. Not all mines have their own helipads or airstrips. In Africa, it is also the military that sometimes accompanies the transport. I wouldn't want to be travelling in Africa on a lorry with gold. That would make me feel uncomfortable. But otherwise you can of course do a few security checks in advance. And I've also learnt that I might not go into a jungle alone again.

Cristian Stanciu, who was born in Sighisoara, Romania, and emigrated to Austria at the age of three, is a gold trader in Switzerland, where he is currently setting up his own trading company, Oromet. Previously, he was Head of Trading at philoro Switzerland from 2020 and Managing Director of philoro Global Trading AG from 2021. From 2001 to 2020, he was Head of Trading at commodity trader and consultant Merit Group.