On July 15, Kaloti Metals opened a representative office in Peru, the world’s sixth largest gold producer. “We have seven or eight large customers in Peru. There’s a lot of potential there but also a lot of competition,’’ said Kaloti. “If we have a representative office and pay them on the spot, then they will be able to expand their business. Ultimately it’s about providing better service.’’
The Peruvian business will function much as the Miami office does. The same day the gold arrives at Kaloti Metals, it’s sent out, and all the advances sent from Dubai have been paid to customers. “By 5 p.m. we have no money and no gold in this office,’’ said Rodriguez.
Most of the gold arrives in bars, but it still must be assayed to verify the gold content. Gold that is 14 karat is 58 percent pure, for example, and the highest grade is 24 karat gold, which is 99.9 percent pure and shinier than the 14-karat gold commonly used in jewelry in the United States.
Throughout history the quest for gold may have moved empires, but there’s nothing very glamorous about the way Kaloti ships its gold. Bars and ingots are placed in buckets that Kaloti purchases from Home Depot, and the buckets are placed inside bags that are sealed multiple times for security.
Nearly all the gold processed at Kaloti Metals is sent via air to Kaloti Jewellery, which has a refinery with a 300-ton capacity in Dubai.
“Dubai is becoming the capital of the world for gold,’’ said Kaloti.
From January to May, $468.2 million worth of gold and gold products, including gold-plated jewelry, were sent from the Miami district to the United Arab Emirates, up from $201.6 million for the similar period in 2012, according to an analysis done for the Miami Herald by Datamyne, a Miami company that has the largest searchable trade database in the world.
But last year and so far this year, most of the gold exported from Miami went to Switzerland, with its legendary vaults to park gold and its tradition of first-rate metal refineries.
From January to May of this year, $1.8 billion worth of gold and gold products were sent to Switzerland from Miami, but exports are declining. Last year, gold and gold products exports to Switzerland were valued at $3.07 billion for the January-to-May period, according to Datamyne.
“By value, gold exports and imports have really shot up in the past few years. It’s basically gold that is transported from the mines in Latin America to Switzerland,’’ said Gabriel Rodriguez, president of A Customs Brokerage.
One of the reasons gold climbed in the Miami trade rankings is because the price of gold soared. In 2009, Miami’s total gold imports totaled just $2.14 billion, but by last year, they had rocketed to $7.25 billion. If scrap gold and gold-plated jewelry and other products are added in, the total shoots up to $8.8 billion.
As the global recession took hold in 2008 and short-term investors began flocking to the relative safety of gold, it pushed up the price for a troy ounce of gold from $871.65 that year to an all-time high of more than $1,900 in after-hours trading in late August and September 2011.
The price has been trending down since, and took a big slide in April, when gold plummeted to less than $1,400 an ounce. On Tuesday gold futures for December delivery settled at $1,335 an ounce.
Demand for gold was down 13 percent during the first quarter of this year, according to the World Gold Council.
Still, Miami seems to be holding its own as a gold hub. Through May of this year, gold was still the Miami Customs District’s top import. Gold exports during the same period were down 29 percent in value, but that was still good enough for No. 2, after aircraft exports.
That’s thanks to companies such Kaloti and Republic Metals Corp. The Opa-locka company began with a $2,500 investment in 1980 and in the beginning refined just 50 to 100 ounces of gold at a time. In 1990, Republic, which also handles other precious metals, built a 40,000-square-foot refinery and recently added 75,000 square feet. It now has offices in New York, Los Angeles and Toronto.