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Setting a Gold Standard

"When I discovered how easy it was to hold money in gold, I said, 'Why not?'"

10Aug

Candente Resource Corp. no longer calculates currency-exchange rates. It doesn't wait for international wire transfers to clear either. It doesn't have to: the gold- and copper-drilling company, based in Vancouver, converted some of its corporate dollars and cents to gold grams and mils.


"When I discovered how easy it was to hold money in gold, I said, 'Why not?'" says CEO Joanne Freeze. To facilitate the process, Freeze opened an account three years ago with GoldMoney.com, one of about nine gold-backed currency exchanges in operation. Since then, Candente, which works with both Canadian and U.S. monies, has used the neutral currency whenever possible, says Freeze.


If both firms are using gold, says James Turk, founder of GoldMoney.com, based in Jersey, British Channel Islands, "the transaction is instantaneous and costs a fraction of what it would in other currencies." (A bank wire transfer can cost $25 or more; GoldMoney.com charges 1/10th of a goldgram, currently about $1.90.) Turk, who hopes to reestablish the metal as an international currency, estimates that GoldMoney.com has about $140 million in gold and silver in circulation and processes several million dollars' worth of payments monthly.


Before calling up your nearest gold-backed exchange, do your homework. Turk recommends making sure the exchange has tight security measures, such as a recognizable auditor and third-party providers. And Jeff Wallace, managing partner of Greenwich Treasury Advisors, cautions that, like any other currency, gold can be risky. "Recently, the price of gold dropped $70 an ounce over three days," he says. "It's just as volatile as any other currency."




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