It’s Wednesday the 13th, better than Tuesday. As the autumn sun soon retreats I head to the Ebusus Cultural Center to meet an Ibizan by adoption named David Mellado (Valencia, 1974), a gemologist, jeweler and court expert. He is the third generation of jewelers in Valencia with a jewelry store in the city center since 1966. I meet a man I don’t know; within seconds I notice his warmth and a sense of confidence he inspires as he speaks. Recorder on, we begin.
-How does your story begin?
-I was born in Valencia and although I am based in Valencia I go back and forth all the time to Ibiza. The truth is that since I was very young, while I was studying, I helped in my great-uncle’s and my father’s jewelry store in the center of Valencia. I would leave school and go to the jewelry store to help. Then I began to specialize, since jewelry is quite extensive, I studied in Madrid to become an expert in diamonds and jewelry, but I am also a legal expert for the issues of inheritance, seizures, judicial auctions, distribution of inheritances in notaries …. I also specialized in antique jewelry.
-When you were a child, what did you want to be when you grew up?
Well, there weren’t many options [risas]. Since I was a child and I got into it as if by inertia, I dedicated myself to it until I took the reins of the family business to promote it.
-As a Valencian I feel obliged to ask you about the Dana. Did it affect the jewelry store?
-No, because the jewelry store is in the center of the city of Valencia and fortunately it was not affected. But it was terrible what happened. We have organized with several colleagues to help the citizens of the surrounding area to help out…
-What did you think of the Valencian government’s response?
-Fatal, but from everyone in general. There has been a total lack of organization, a tremendous abandonment. And without politicizing, I don’t care about colors, but one pays taxes and then when things like this happen, very serious, nobody shows up or they take too long and there are not enough of them.
-Now what was really moving, to shed a tear, that image of the people walking in columns armed to the teeth with broomsticks, basins, how precious and powerful it is to see the people united, all as one….
-I was very impressed by the young people, I recognize that I have sinned of prejudice against them in the doubt if they were prepared to face a crisis situation, but they have thrown themselves wholeheartedly and on top of that they have given a lesson to the government, since they have quickly organized themselves through networks and in no time they were marching. The People for the People…
– “The People save the People” was the battle cry.
-Totally.
-What is a gemologist and what does he/she do?
-I study and treat stones. My specialty is diamonds. Since I was a child, I’ve been passionate about everything that sparkles. When you get more and more into detail, the inclusions it has, the impurities, colors, facets, the forgeries that have always been made and discovering them I find fascinating.
-What are the different facets of the jeweler?
-The jewelry profession ranges from the jeweler who buys and sells, then the workshop that makes repairs and designs or transforms antique pieces into modern ones, to the stone mason who creates a piece based on a stone.
-And what is your favorite?
-I play almost all of them.
-Which one do you enjoy the most?
-The antique jewel with history. The one where I have to investigate, like when it’s a court order and I have to find out the history, the provenance and the notarial value.
-Are there fashions in this sector? What’s in fashion right now?
-In jewelry, fashions do not usually influence much, good jewelry is timeless, we can find Art Deco or Art Nouveau jewelry that endure over time. And the diamond may be now more sought after yellow or brown but a natural white diamond has millions of years circulating and being desired.
What are the most in-demand gemstones?
-I think the king is the diamond. There are also stones in demand as can be a beautiful sapphire, an emerald, a ruby burma with bright colors is also much appreciated. But I repeat, for a woman, for a couple I don’t know, a diamond is forever [risas].
-What is the piece of jewelry in the world that seems to you the most spectacular from the point of view of design, or historical value…?
There are pieces that have been auctioned that acquire a brutal value, I remember that a few years ago a pink diamond was auctioned for 58 million dollars, a stone, that is, a ring, bought by a Chinese man for his 18-year-old daughter.
-Don’t tell me these things that I get bitter about how badly everything is spread out [risas]. But I am referring more to some piece that by design or history you think is singular.
-Apart from the piece, I like the history very much, for example, Prince Charles’ engagement ring for Lady Di was a sapphire with a diamond border around it, and that model is directly named after her; we call it Lady Di ring.
-I imagine it will stay in the palace, or was it put up for auction?
-I think it was the one Prince William gave to his wife at their engagement. Those kind of pieces don’t leave the family.
-What does your jewelry store in Valencia specialize in?
In second-hand and antique jewelry. We have a part that is the judicial auctions and then we travel around the world looking for those unique pieces with history. On the other hand, we are very fond of restoration. For example, families inherit earrings that have nothing to do with them, so we transform them, or they are antique and we have to restore them. This is a job that I like very much. Then we have the investment gold bullion part, which is very, very interesting.
-As you know, there is a lot of violation of human and children’s rights in the mines where these elements are extracted, Do you think it is possible to achieve an extraction free of these violations?
-It is true that there is a whole market that looks for this type of product, but we directly buy jewelry that is 80 or 100 years old that is set for example.
[interrumpo]-You don’t buy crude then?
-No, not in general, and if I buy we do it through markets such as Antwerp, which is one of the strongest in the world and is certified by a series of controls that are passed to ensure that no rights have been violated in the extraction.
-What types of work do you do as an expert?
-Within the scope of the judicial expert there are several ways. One of them is to work for the notary’s office, for example: there is an inheritance where there is a current account, real estate, cars and jewelry. We take care of monetizing these jewels for the notary so that he can then collect it in the deed of inheritance and then make distribution or sale and distribution of the benefit among the heirs.
Another one is the work for the court when there is a swindle, seizure or robbery and what we do is a report with the description of those pieces and give it value so that your Honor understands what it is because based on that amount the judge will apply more or less penalty. Another example is once we participated in the analysis of a scam where 58 gold bars were sold and they had a coating made with a material called tungsten, which is very misleading, and it is a metal with a density very similar to gold. What the fraudsters basically made is a sandwich, where the gold was on the outside and the tungsten was on the inside, like chocolate coins. And they presented their expertise that said it was pure gold and we measured it and we saw that there was something strange and we opened them.
-And all these analyses are through chemical reactions and digital meters?
Both, and then there are x-rays, then we have a densimeter that obviously measures densities but then the best thing is to have a good eye that is forged with years of work.
We have also had smelting, in 2008 we bought from all the buying and selling houses and we have melted many kilos of gold and my eye became an expert, apart from these methods that I mention to you.
-Have you ever thought an ingot had filler in it and cut it out and it turned out to be real? [risas]
-That doesn’t hurt anyone because it melts and you do it again, that’s the good thing about gold, it’s very easy to manipulate.
-As an expert also in gold, while other elements such as nickel or lithium are fundamental for all kinds of metallurgical and technological advances, I must ask you… How is gold useful for human beings and why is it so precious when it is not really of much use?
-On the one hand, around three thousand tons a year are extracted in the world, of which we do not see a gram, because it all goes to the central banks that buy tons every year and keep them in their vaults. Then, what is moving in jewelry is the circulating money from people who sell their jewelry, for example. And then there is a part that does contribute and that is that all the devices that are plugged in have gold or silver in their processing plates, cell phones because basically gold is conductive. I worked for a company years ago as an expert in precious metals that was dedicated to the extraction of electronic scrap. Computers the older the better because the boards were bigger then you could find 7 or 8 grams of gold per processor but as they were getting smaller in size now less. Professional audio cables also have gold. But they all have some gold or silver or both.
-I understand what you are saying, but it does not reach the level of other elements that are used in much more industrial quantities….
-No, not at all.
-And the top 3 are gold, platinum and silver, correct?
-Yes, and notice that platinum used to be the most expensive, the first, and now it’s gold first, then platinum, then silver.
-What’s wrong with silver, does it have bad marketing? [risas]
-Silver is very cheap and has many more applications than gold. With silver you can make deodorants, missiles, medicine because it is antibacterial…
-But besides silver is precious, if I were rich and I liked jewelry I would never opt for gold, always silver.
-However, they give more importance to gold. Silver is called “the investment of the poor” but anyway….
-For many people gold is tacky, nouveau riche, or rappers who wear jewelry of a size that some would say is classless, you do recognize that in your world of jewelry it can be very tacky, don’t you? [risas]
Yes, the “colorados” as the gypsies say [risas]. It is not my weakness…
-Other, what a diplomatic phrase that is… [risas] Money can’t buy class.
-There are people who hang pendants with dollar signs, giants and that is … but they are also risking their necks because a kilo of gold is worth 80,000 euros! If they can kill you for stealing an iPhone or a watch worth 3,000 euros, imagine for those pendants.
-Why is investing in gold a good idea?
–For me, who rules the world are the banks. And if the banks buy tons of gold per year, it will be for a reason.
-Yes but they said it was to back physical money, but since the digital age I think if I’m not mistaken 80% of physical money is no longer backed by gold.
-Right, Nixon did away with the gold standard and that is why we are like this, from then on they started printing money as if they were photocopies and flooded the whole world with dollars and from that there are many banks that have fallen because the system is not sustainable with a solidity. A curious fact is that the American Federal Reserve says it has so many tons of gold and it has never been audited, that is incredible.
-Because it is private. It is amazing that the central bank of a country is private, something unique in the world, but that is explained by the fact that it is the epicenter of capitalism?
-But people think it’s public! If they said how much gold they really have, gold would skyrocket even more.
I do not know if you know that governments have a stock of gold that they diversify by putting it in different banks, they do not keep it, in general, all of it in the local central bank. Former Venezuelan President Chavez was the first to repatriate his gold to Venezuela, and then the rest of the countries also tried to do so due to the lack of confidence in the system as a result of the 2009 crisis. Germany also asked the US for its gold and it took them 4 years to give it to them, because they did not have it.
The Chinese have a lot of gold but they do not sell it, they are already in a process of de-dollarization by exchanging it for gold, that is why they have made it go up so much.
-Is gold expensive right now?
-This year it has risen 35% in profitability. Twice as much as 4 years ago.
-One of the benefits of investing in gold is that you don’t pay taxes?
-Well, that is a great advantage, but apart from the investment, gold is a great tool to buy because it does not carry VAT, it does not carry taxes until you sell, if you buy at 5 and sell at 12 you will pay 7 in next year’s income. But you buy and tomorrow you pass it to your children and there they have the inheritance done without any paperwork, no waiting; instantly.
-What formats do the ingots come in?
-Kilo, 500 grams, 250 grams, 100 grams, 50 grams, ounce, 20 grams, 10 grams and 5 grams.
-Is it the same to buy 4 units of 250grs in small ingots than 1 ingot of 1 kilo because it is price by weight or the format also varies the price?
-The smaller the manufacture, the more expensive it is. Because it is not the same to melt to make 1 piece than 4, obviously. It depends on the investor, there is the one who can allocate every month for an ingot of 5 grams and then there are others who go from kilos to kilos.
-How much does the film ingot weigh?
They’re 12.5 kilos, they’re the bankers’ bags, and that’s a lie! [carcajadas]. They’d be left with just the handles in their hands.
-And how is the minting issue, that logo or stamp or primer on the ingots?
-The London market is the one that mainly regulates the gold market, which is the London Bureau Market Association, and the most prestigious refineries are members of that market, and it is basically the purity certification, it is like ISO 9001. In Spain we have Sempsa.
But it’s also a way of branding it, isn’t it, like narcos brand their cocaine bales with a scorpion[carcajadas].
-Yes, I have clients who ask me “now I want from the Swiss stock exchange, another one from the Shanghai stock exchange….
-I understand, everyone has their own and there are those who want to have the collection?
-Well, each one with his own fetish….
-And if a rich man wants to mint his face on an ingot, is it possible?
-Yes, it is possible without any problem.
-But if you then want to sell it, is it worth less because it’s your face and not the Shanghai or London logo, or price by weight and out?
-The kilo of gold is the kilo of gold, but there are people for everything.
-Are Rolex watches really the #1 brand?
-We sometimes include used Rolexes in the lots we buy. There is a second-hand market that is more expensive than new ones. There are certain models that are in high demand, like the Daytona. They make a certain amount per year and have a waiting list of about a thousand people, which gives them a very high status. They don’t sell it to just anyone, they choose, so….
-A person who has 5 thousand or 10 thousand euros saved, what would you suggest would be a good investment, gold, U.S. treasury bonds…?
-Look, I follow a very impartial economist called Santiago Niño Becerra and he comments that in Spain there is an approximate deposit volume of 1.3 trillion euros, while the guarantee fund has only 6 billion. Many people believe that banks guarantee up to 100,000 euros per saver, but no way, there is a coverage that is much lower than necessary, therefore there is a brutal insecurity in the market and in the system. That is why gold has grown so much, people want their savings in their hands. I say gold, but all of them, all of them.
-And what do you do with the gold, bury it in the garden of your house, put it in a safe deposit box in a bank ….?
-I wouldn’t trust the bank’s safe deposit box, if we are buying gold it is precisely because we don’t trust the bank, if we go back to the banks and the sky falls you won’t have it in your hand and you won’t be able to get in to get it either. Yes, at home, where you can hide it.
I will give you two very clear examples; going back to DANA, many Valencian clients have called us thanking us for recommending them to save in bullion because thanks to this they will be able to rebuild their lives after losing everything but the gold they had at home.
Another one; we were buying a lot of gold from Ukrainians who emigrated to Spain because of the war, who relied more on gold than on their own currency, and thanks to that they have not been devalued and have been able to rebuild their lives here.
-And gold never depreciates? It’s like houses in Ibiza, which are ridiculously overpriced but still, if you buy, you will never lose money?
-How many times do we see properties that you say “they are crazy” and the next year they are up 20%? Gold is like gasoline, it drops you 1 cent and raises you 7.
-You can’t imagine any crisis scenario of any kind where as a result gold depreciates?
-The worse the situation, the more war or anything else that could happen, the more expensive the gold will be. It is a tool that helps a lot and guarantees security. Look at pension plans, for example, which have been sold in Spain as a great solution and I have clients who have worked for 40 years and have had to pay taxes again and, moreover, without being able to take it out at will, it is a deception. People are already making their pension plan in gold, and on top of that you can make it effective anywhere in the world and this very afternoon.
-I have a recurring question with a fascinating and terrifying topic that is A.I. How would you feel about AI getting into jewelry design?
-Well, it’s already here and it’s unstoppable. I know that many jobs will die and there will be new ones… My father always said “one day in every house there will be a computer” and there is already in every house more than one and we all go with one in our hands, and now I say “one day in every house there will be a humanoid robot assistant”. And they will need high quality raw materials such as gold and silver.
-Would you have one of those robots at home?
-For the moment I already have a roomba [risas], but a humanoid one… [piensa]… the truth is that it will be strange… but well, if it makes me a Bullit de peix [carcajadas] and without discussion!… the same…
