Does fractional bullion sell for a premium too?

To be more specific, the premiums you encounter when buying are not the same as when selling. The costs to make smaller rounds (1/10, 1/4, 1/2, etc) are added to the pricing. When you sell you do not get to recover them. It's based on spot pricing minus the dealers fees.

 

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Yeah but they can still make a profit.

If they're charging more for fractional bullion it just makes sense that they would pay more for it too.

For example: Let's say gold spot is $1,000 oz.

Let's also say that a dealer pays 5% under spot..

Well if I take in a 1 oz American Gold Eagle he would pay me $950 for it.
But if I take in 10x 1/10th oz American Gold Eagles he also pays me $950 for them.

But then he turns around and sells the 1 oz AGE for say $1050 yet sells the 1/10th oz AGEs for $110 each for a total of $1100.

In one case 1 oz of gold earns the dealer $100 but in the other case the exact same amount of gold earns the dealer $150.

The dealer makes more money by charging higher premiums on fractionals but he doesn't pay any more for the fractionals? That just doesnt make sense to me.

 

Oh ok I thought maybe the logic would be that smaller fractionals are easier to sell and grab a higher premium so they might be worth paying a little extra for.

Alot of people might not have $1900 to drop on 1 full oz of gold.

But many of them would probably have $200 to drop on 1/10th oz of gold.

The dealer makes more money selling 1 oz of gold as fractionals than he does selling 1 large amount all at once.

 

Like I said, find a dealer with good sales of fractionals and s/he may very well pay you more for them. Go to a regular dealer, he will worry if he cannot sell them at premiums. Therefore he might only offer normal spot buy prices.

In the end, if you throw it into a melting pot its worth what the weight is. Some dealers will only every pay you that, not willing to give you any potential profit he might make if he gets lucky and finds a fractional buyer.

 

Half sovereigns tend to go for a slight premium.
People do like the smaller coins. Headline from Dec. 21, 1924 New York Times [p.6]: "$2.50 Gold Coin Gifts/Drain Bank Supplies". Banks were running out of quarter eagles due to demand as Christmas gifts. The article notes that you can get one from the bank for $2.50 in currency if they have them, but a money broker would probably ask a premium! This may explain why minting resumed in 1925, after ceasing in 1916. The article also notes that $1 gold pieces are hard to find in circulation. Here is the link, but you may need a subscription to reach it: https://timesmachine.nytimes.com/timesmachine/1924/12/21/issue.html

 

You will always get less buy or sell, the dealers set the prices where you get soaked
when you buy and then again when you sale, so you get hit in the mouth twice especially on the fractional stuff.

 

Yes, I like my sovereigns [especially young heads] and 20 francs, but mostly I have a ton [well, actually a couple of pounds] of Austria/Hungary 10 and 20 corona/kroner. I bought them over 50 years ago, so I can't remember if I paid a premium; if I did, it wasn't much. But since gold was only about $50/oz, I didn't much sweat the premium. I expect to sell at a discount when I sell. [Stupid me; I quit buying gold when it hit $60/oz; didn't think gold would ever get over $100 oz.] I was thinking of selling them and buying AGE's, but even though the risk is small if you deal with a reputable dealer, I still could not be sure if the AGE's were real. [Yes, I have gotten fakes from a "reputable dealer".] My coronas/kroners are all original (not restrikes) so I am pretty sure they are real.

 

I think even the restrikes are real gold too.

 

Don’t be confused, prices for the most are
set my demand, good example an ASE will
sell for more then a silver round by far, why
you may ask ? simple ASE,S are in big demand where as silver rounds or not even
though your still dealing with 1 OZ of silver
on both sides.

 

The French/Swiss 20 Francs are .900 fine; the Sovereigns are 22kt (.91666 fine).

 

I just bought 5 Colombian 5 Pesos (same weight and fineness as a UK Sovereign) for $20 over melt for each one. More than I like to pay, but the times is what the times is.