Gold Forward is a new product that Kuveyt Turk Participation Bank offers in gold banking to its customers such as jewelers, investors having gold at hand, money changers and investors operating in the gold sector. With Gold Forward, you may protect yourself from the risks resulting from the price changes in gold.
It provides the investors that have market knowledge but do not have a high amount of capital and the investors that have to make buying/selling on credit with the opportunity to gain a high amount of profit with a low amount of money.
It is possible to perform hedging with Gold Forward. Hedging is a method of getting rid of the effects of price fluctuations.
You plan to purchase as raw material, process in 10 days and sell in exchange of TL a certain amount of gold. In order not to be affected by currency risk, you may fix the rate as soon as you purchase the raw material by making a 10-day maturity Gold/TL Forward transaction in the same amount. By means of fixing the rate, you may zeroize the profit or loss in the forward transaction or the profit or loss in the spot. Thus, you may focus on commercial profit without thinking about currency risk.
You predict that the price of gold shall reduce after 3 months. In line with your prediction, you may make a 3-month maturity Gold/TL Forward transaction. You may effect this transaction by keeping blocking at certain rates in your account or using forward limit. Thus, you remain in liquid during the transaction.
You shall receive a certain amount of USD after 3 months and you have to purchase 1 kg gold on the same date. You may fix the rate of 3 months later by making a 3-month maturity Gold/TL Forward transaction.
In order to get further information about Kuveyt Turk Gold Forward, you may call 444 0 123 or visit Kuveyt Turk branches.