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<p>[QUOTE=&quot;GDJMSP, post: 1880351, member: 112&quot;]And therein lies the problem in your thinking. What the dealer has to look at in regard to the bullion is what he can sell that bullion for. The person who buys the bullion from him, (in most cases that&#039;s gonna be somebody who deals in bullion), is only going to pay 10% or more, less than spot. The dealer knows this and knows he has the potential to lose money on the bullion. To avoid that potential loss he is going to offer to pay you less than what he thinks he can sell it for.</p><p><br /></p><p>Could he break even on the bullion as in your scenario ? Yeah, he could. But he knows the odds of his doing so are slight so in most cases he won&#039;t take that chance. And if he&#039;s not willing to take the chance then that means that you lose on the bullion side of the deal.</p><p><br /></p><p>The scenario you describe is no different than when you trade in a car. The dealer will tell you he is giving you $5000 for your trade. You think that&#039;s a good deal because you know your car is only worth $3000 to a dealer. But the dealer isn&#039;t giving you $5000 for your trade, in reality he&#039;s only giving you $3000 and dropping his price of the new car by $2000 so he can make the deal. If you came in without a trade, he&#039;d still drop the price by $2000 to make the deal. Bottom line he makes the same deal every time avoiding any potential loss for himself.</p><p><br /></p><p>But if you sold your car yourself as a separate deal to an individual, you might get $3500 or even $4000 for it. A better deal for you because the new car is going to cost you the same no matter what you do.[/QUOTE]</p><p><br /></p>

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