Gunvor Group Ltd. is giving up trading physical precious metals less than a year after the commodity house started a business dedicated to buying and selling gold.
At least two traders are leaving the company in Geneva and Singapore, according to people with knowledge of the matter, declining to be identified as the decision isn’t public. Seth Pietras, the firm’s spokesman in the Swiss city, declined to comment by phone and e-mail today.
Gunvor, the world’s fifth-largest oil trader whose former major shareholder and co-founder was sanctioned by the U.S. this year because of ties to Vladimir Putin, is one of the few large commodity firms that handles precious metals. The move into gold was part of an expansion into non-oil businesses that now include iron ore, industrial metals and natural gas. Gold trading was done by a handful of people in Singapore and Geneva.
“Decided to abandon the precious metals trading business partly because of difficulties in finding steady supplies of gold where the origin could be well documented”
Gunvor executives decided to abandon the precious metals trading business partly because of difficulties in finding steady supplies of gold where the origin could be well documented, one of the people said. Gunvor’s announcement earlier this year that it would begin physically trading precious metals was unusual as neither Glencore Plc (GLEN), the biggest metals trader, nor Trafigura Beheer BV, the second largest, trade physical gold.
Gunvor continues to trade base metals, including copper and aluminum, as well as bulk commodities such as coal and iron ore. It opened an office in Shanghai this year that now employs 20 people to trade industrial metals and other non-oil products. Last month, it hired Michael Harrison from Mercuria Energy Trading SA to head the EMEA region’s copper desk from Dubai, according to two people familiar with the matter.