A company that sells affordable gold products is seeing demand soar as the economy reels from the pandemic.
When Adam Trexler founded gold products company Valaurum in 2012, sales were slow and revenue was in the single digits. Fast-forward to 2020 and the company can barely keep up with demand for the precious metal.
Gold is perceived as the most secure investment in times of economic turmoil. Investors buy gold to hedge against volatility in the financial markets, such as currency fluctuations.
Gold prices also fluctuate but are relatively stable compared with stock prices, which have gyrated over the past few months because of the economic fallout from the pandemic.
The price of the precious metal has surged 18% over the past six months as investors seek a safe haven for their investments.
Valaurum makes the precious metal affordable for the average consumer by selling dollar-style gold bills ranging from $10 to $100. The bills, known as Aurum (Latin for gold), are made of layers of 24-karat gold sandwiched between layers of polyester coating.
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The complex manufacturing process, which takes place at undisclosed locations in Oregon, uses nanotechnology to coat the impossibly thin layers onto the polymer.
The company’s revenue has grown 572% in the first six months of 2020, compared with the same period in 2019, says Trexler. Its revenue has entered the seven-figure range from six figures in 2015.
“Since the pandemic, there has been an enormous, unstoppable demand for physical gold,” says the company president.
Trexler got the idea for his venture after spending time in the U.K. as a student, researcher and professor, where he taught classes on the relationship between credit markets, monetary policy and local crafts movements. He also experienced personally the shock of currency conversion — converting student loan dollars into pounds meant his money swung as much as 25% in value.
While abroad, he learned about a gold-coating technique developed by Venture Technology, a Grants Pass thin-films research and development firm. Trexler partnered with the firm to launch Valaurum.
Valaurum’s customers are mostly retail websites that sell gold as well as stores and catalogs. Buyers span the entire spectrum of wealth, he adds, and have tended to buy Aurum in larger quantities than before the pandemic.
One of the company’s customers is the Utah Goldback, the first legal currency made of gold. That currency has grown in popularity since the passage of the Utah Legal Tender Act in 2011. The cash value of Goldbacks sold between August 2019 and May 2020 exceeds $2.5 million, according to the organization’s website.
To keep up with soaring demand, Valaurum is seeking to double its staff of 12 people and expand its machinery.
Worldwide demand for gold has been so large that it has been challenging acquiring the metal in its raw form.
Bullion vaults approved by the Comex division of the New York Mercantile Exchange house almost 30 million troy ounces. Almost three-quarters of that — weighing as much as nine fully loaded Boeing 737 airplanes — has arrived in the past three months, according to a recent Wall Street Journal article.
Trexler says his company has driven down manufacturing costs since its founding and has also improved security.
“We have much more market acceptance,” says Trexler. “It is a business people turn to in a time of crisis.”
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