Buying Gold Doré: Understanding Assay, Settlement and Delivery

Most gold doré transactions fail not because the metal was not there, but because the parties never agreed on how its value would be determined, by whom, and when payment would follow.

If you are buying gold doré, or sourcing it for a client, understanding this mechanism is the difference between a transaction that completes and one that collapses at the assay stage with both sides convinced the other acted in bad faith.

Doré is not bullion. It is semi refined metal poured at or near the mine, typically 60 to 95 percent gold with silver and base metals making up the balance. There is no standard fineness and no universally accepted figure for what any given bar contains. Two parties can hold the same bar and hold two different numbers for its worth.

That single fact drives everything else. Professional doré contracts therefore do something counterintuitive: they do not fix a price at signing. They fix a mechanism.

Gold doré assay: establishing content

Sampling is where accuracy is won or lost. Doré is heterogeneous. Gold does not distribute evenly through a poured bar, so a drill sample from one corner may bear little relation to the whole. Serious counterparties insist the bar is melted and sampled while molten. A vacuum dip sample from homogenised metal represents the lot. A drill sample represents the spot where the drill went in.

The sample is split into three sealed portions: one for the seller, one for the buyer or refinery, and one held for an independent umpire. That third portion is the dispute resolution mechanism. A gold doré contract without it has no dispute path at all.

Fire assay remains the settlement standard. It is slow and destructive, but it is the benchmark against which other methods are validated. XRF and ICP are useful for screening and trace elements. They do not replace fire assay for settlement. If a counterparty proposes settling on XRF alone, question it.

Independence matters more than method. Where one party controls both sampling and assaying, particularly if that party is the buyer, the seller has no check on the number that determines their payment. An accredited independent surveyor at origin costs a fraction of a percent of cargo value. It is the cheapest insurance in the transaction.

Gold doré settlement: turning the number into money

Doré settles in two stages. Provisional settlement occurs at shipment against estimated fineness, with the buyer advancing typically 80 to 90 percent of estimated value. Final settlement follows the refinery's outturn assay, reconciling that advance against proven content. Money can move in either direction. Sellers who treat the final reconciliation as a renegotiation have misunderstood the structure.

Splitting limits prevent most disputes. Buyer and seller assays rarely match exactly. A well drafted contract defines a tolerance, commonly around 0.05 percent on gold, within which the two results are simply averaged. Outside it, the sealed umpire sample goes to a pre agreed laboratory whose result binds both parties. The final figure is usually the mean of the umpire assay and whichever party's assay sits closest to it, with umpire costs borne by the party furthest out. That allocation is deliberate because it makes optimistic assaying expensive.

The price date is not a detail. Whether shipment, receipt, assay, outturn, or the seller's election within a window sets the gold price can outweigh the entire refining charge in a volatile market. If your contract does not specify the pricing date and reference benchmark, you do not have a price. You have an argument waiting to happen.

Deductions reduce the figure materially. These include refining and treatment charges, metal accountability because the refiner does not pay for 100 percent of contained metal, assay costs, freight and insurance, and financing on the provisional advance. A price quoted as a percentage of spot is meaningless until these are specified. Two offers at the same percentage can net very differently.

Gold doré delivery: custody and compliance

Incoterms carry sharper consequences here. Doré cannot move as ordinary freight. It needs specialist secure carriers, and insurance is priced on declared value with strict conditions on packaging, sealing and custody. A policy that lapses because a seal was broken outside the agreed procedure leaves someone carrying an expensive loss.

Chain of custody is the documentary spine. This includes lot identification, seal numbers, weight certificates at each transfer point and independent surveyor reports. Final settlement reconciles the refinery's measured weight and fineness against origin declarations. Where there is a discrepancy, custody documentation determines where it arose and who bears it. Weight discrepancies are among the most common disputes after delivery and are almost always resolvable where documentation is complete.

Export compliance is not optional. Legitimate doré carries export permits, royalty and tax evidence, certificates of origin, and responsible sourcing documentation aligned to OECD guidance. LBMA accredited refineries apply stringent intake due diligence. A parcel that cannot evidence lawful origin and export is refused regardless of metal content, leaving the seller holding gold in a foreign jurisdiction with no route to market. This is where many otherwise genuine transactions fail, and it is entirely foreseeable.

How to qualify a gold doré counterparty

Physical gold attracts enormous transactional noise. The volume of offers circulating vastly exceeds the metal actually moving, and the gap is filled by parties who have never seen a doré bar.

The most efficient filter is not asking for proof of product. It is asking how the deal is structured:

Where is sampling done, and who supervises it? What is the splitting limit? Who is the named umpire? What date sets the price? What are the deductions? What export documentation accompanies the parcel?

Someone genuinely close to metal answers these without hesitation because these are the terms they negotiate for a living. Someone who cannot is not close to metal, whatever volumes they claim.

The questions cost nothing. The answers tell you almost everything.

Frequently asked questions

Westcourt Advisory is a cross border advisory firm. This article is provided for general information and does not constitute legal, financial or investment advice.