When selling GOLD don’t do this !!

Went to one of my LCS, and just to let you know I don’t buy there anymore because
this guy tried to low ball me on some 10 OZ
Silver bars as part of my silver liquidation
last year so just as a browser there now
actually do my local purchases a few more
mikes away.

But this is what I observed yesterday when
I stopped in, so a guy walked in with 3 Type 2 eagles and the man at the counter
asked him what he wanted for them, he said he wanted spot, WTH !! obviously the
guy was a novice when it comes to selling
Non generic GOLD as when you go to buy
you are charged a premium well guess what when you go to sell the same applies
except non branded GOLD ( generic ) but for example Krugerrand s are 2-4 % over
spot eagles and buffalos are 8-10 % and
always take that in to consideration if and when you decide to sell, as the dealer is
probably not going to say anything, I know
this guy won’t and he didn’t !! so this guy
walked out leaving a few hundred dollars
on the table

I would say most dealers are honest but
it’s always good to shop the best buyer
for your GOLD to get the highest premium.

 

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So you fault the dealer?
The seller knew what he wanted and I assume the dealer paid his price.
That's business.
Your Millage May Vary

 

If I was the dealer and he said spot I would examine the hell out of them and shoot him a price below his asking price. I would say "I have overhead and its going to set in case for a while I would offer you 2 dollars below spot." You say most dealers are honest for the most part but if you not trying to haggle price you take what they offer then. I have a big mouth and no knowledge I would have said something and walked out.

 

You're failing to differentiate between retail and wholesale. When you sell retail it's to the ultimate consumer, when you sell wholesale it's to a dealer who's going to sell to the ultimate consumer. That dealer has a cost margin he has to clear to remain in business. Spot is fair selling into a dealer. If you want better, find a consumer, and bear the expenses of it, like he has to. Your advice is off for your misunderstanding of basic retail and wholesale constraints. This guy didn't leave anything "on the table" selling at spot into this dealer.

 

It might vary from dealer to dealer. I sold some 10 oz bars of silver to liberty coin in Lansing MI a few months ago and got spot + i don't remember the exact percent, but it was something.

 

Well of course they’ll vary. I know that just from silver I’ve unloaded. In an up market it’s not unheard of, they’ll offer over spot, and in a down-trending one, just the reverse. We’ve seen that when silver was climbing to $40/oz. You have to figure their margins when selling into them, though, and that’s the point.

 

It's up to the seller to know what the reasonable value is for their stuff, rather it be bullion or coins. It also depends on the quantity your selling. For example it's a lot easier for the dealer to sell 1oz or 10oz quantities compared to 100oz or kilos. It also depends on what you purchased it for. Maybe he purchased it a while back and was happy with the current spot price. For example I sold a lot of ancient Greek silver coins to a dealer. They were, at best, in "good" condition. I only paid $10-12 for each one, he paid me $20 ea (double my investment), and then priced them at $100 ea. I went back to his shop a couple years later and most of them were still there, unsold. Why, because he overpriced them. So it works both ways.

My thoughts on spot pricing, and the governments control over precious metals. Spot pricing is a myth; as a consumer I have never been able to buy precious metals at spot price. I have to buy from government authorized bullion companies or individuals on the open market. The government authorized bullion companies never sell at spot, your lucky to pay 10-15% above spot. On average precious metals only increase 3-5% a year so it will take 3-5 years to just break even (pretty lousy investment return). Like everybody, I want to purchase precious metals as close to spot as possible. In today's economy I found the cheapest option is to buy high grade certified American Eagles (gold or silver) as the bullion companies are selling ungraded copies for the same price as NGC graded MS 69.

 

A dealer buys a coin for $1 and sells it for $2. That’s a 100% markup and a 50% margin. The first term is meaningless, the second term meaningful. That’s because the second term is the third line down on his income statement before his operating expenses. It's not at all uncommon that your brick and mortar LCS needs to hit that line at 40% relative to its revenues. That means, if you’re a good grader, you can never ever be cheated. As teenagers, we’d buy and sell to dealers all the time like that. All you need to know is the retail price, and if they don’t hit your number, the next one will, you can take it to the bank.

 

that horrible

 

I've never gotten a fair offer when selling to my LCS they gotta make money so I'll buy from my LCS but there's better places to sell for sure!

 

I would think the dealer would be a little more
honest about the transaction, it’s obvious the seller had no clue on what he was due, and what honest dealer would pay spot for US
GOLD, if the seller would have educated
himself before he went in maybe this would
have turned out different.

 

Below spot for US GOLD ? that’s just criminal !!

 

Well there has to be something on the stick
for the seller to nibble on, there are tons
of precious metal dealers in my area, some
are more honest then others, where I usually
go they will let you know and work with you
on the premium both buying and selling in
other words there not out to rip you off !

 

Everybody has to make money but it’s about
being fair after all.

 

Right, you're there to rip them off.

 

You have to understand which way the market is going as a buyer.
Do you know which way it will go tomorrow when you buy 3 ounces of gold today?
I Don't, but I'd say at spot may be a gamble if the dealer isn't well connected with the selling market...be it wholesale or retail.
If the dealer doesn't have the 3 ounces sold already he's gambling.
Up, Down, Sideways still has carrying cost.
Not sure I can explain it any better.
Maybe the dealer bought 3 ounces or more from the seller that just left?
Working on a smaller margin may not have the cash to buy at a spot+ price point as the day goes on?

 

You mean like the Telephone bill. Water bill. Cable bill, Electric Bill, Security system bill, lunch income tax if the dealer made a profit

 

The point I am trying to make is the fact that
the seller came right out and said we wanted
spot price which you don’t want to tip your hand the dealer may have been able to pay
more but since he didn’t have to why should he..LOL

 

Too many variables, I have some silver bars that I paid $4.44 an ounce for.
Maybe that seller bought his gold right and could pass on his good fortune.

Another example. Buyer comes in buys a vintage silver bar at 1.5x spot price because the dealer knows what he has... buyer sells said bar for 3x spot to a collector that wants it more than he did
Everyone is happy.