This Risk Disclosure ensures that clients, counterparties, and potential business partners are aware of the material risks associated with commodity trading activities. Engaging in commodity trading involves substantial financial risk.
1. Price Risk
Commodity prices are highly volatile and can be influenced by macroeconomic conditions, geopolitical events, weather patterns, supply and demand fundamentals, currency fluctuations, and speculative activity. Significant and rapid price movements can result in substantial financial loss.
2. Market Risk
Commodity markets can experience periods of illiquidity, extreme volatility, or market disruption. In such conditions, it may not be possible to execute or close out positions at commercially reasonable prices.
3. Counterparty Credit Risk
Trading involves counterparty credit risk — the risk that the other party may be unable or unwilling to meet its contractual obligations. We manage this risk through credit assessment and contractual protections, but cannot eliminate it entirely.
4. Operational and Logistics Risk
Physical commodity trading involves logistics, storage, transportation, and handling risks. Commodities may be lost, damaged, or delayed in transit. While we maintain insurance and employ professional logistics partners, residual risk cannot be fully eliminated.
5. Regulatory and Legal Risk
Commodity trading is subject to extensive and evolving regulation across multiple jurisdictions. Changes in law, regulation, or government policy can materially affect the profitability or feasibility of transactions.
6. Currency Risk
Where transactions involve currencies other than US Dollars, exchange rate movements may affect the value of positions and settlement amounts.
7. Not Financial Advice
Nothing in this Risk Disclosure or on the KGML website constitutes financial, investment, legal, or tax advice. All parties are strongly encouraged to obtain independent professional advice.
Document:Risk Disclosure — Kaustubh Gold & Minerals Limited
Effective:1 January 2025
Questions? compliance@thekaustubh.com