Do Dealers Want PM’s When Prices Are Inflated?

Discussion in 'Bullion Investing' started by Randy Abercrombie, Nov 14, 2023.

  1. Collecting Nut

    Collecting Nut Borderline Hoarder

    If the price swing is high in either direction it can mean a loss to the dealer. I learned that from a large dealer in PM’s.
    GoldFinger1969 likes this.
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  3. mpcusa

    mpcusa "Official C.T. TROLL SWEEPER"

    As some one that buys allot of GOLD
    price is not a big concern for me, as I am
    a long term investor, my kids and grand
    kids will do with it what they want, stuck
    with GOLD my LCS is always out, but they
    usually get there order in on Tuesday afternoon by Saturday there out so the
    demand is definitely there, that’s for sure !
  4. GoldFinger1969

    GoldFinger1969 Well-Known Member

    Not really.

    If you were a dealer and you bought gold throughout the 1970's...what happened when you bought gold near the top in 1980 ? It didn't get close to that price for DECADES.

    Even years lateer...what happened when you bought after big rallies in 1985, 1991, 1994, 2008..... and then gold declined and stayed low FOR YEARS ?
  5. Heavymetal

    Heavymetal Well-Known Member

    I doubt many dealers bought and held
    Most turn over fast
    Or they balance on the futures market
    If they don’t
    Darwinism prevails
    Last edited: Nov 29, 2023
    Mr. Flute likes this.
  6. GoldFinger1969

    GoldFinger1969 Well-Known Member

    Maybe...I really don't know.

    What happened to the dealer who buys high and CAN'T turn over their inventory at a slight loss and the price drops even more ?

    Stable prices would seem to be best....rising prices (esp. fast-rising prices) would seem less ideal....falling prices, slow or fast, are worst.

    If dealers do NOT want to speculate on the price of gold (smart)....then they really would prefer price stability and just bank the spread.
  7. Collecting Nut

    Collecting Nut Borderline Hoarder

    The dealers bought at those high prices and sold the gold in any form they bought it, and sent it to the melting pot as fast as they could. When the price started to drop, they stopped buying.
    GoldFinger1969 likes this.
  8. Mr. Flute

    Mr. Flute Well-Known Member

    More likely they just increase/shift their buy-sell spread.

    A serious dealer should be trying to make money regardless of the spot price movements. Cash flow and repeat customers is most important.
    GoldFinger1969 likes this.
  9. GoldFinger1969

    GoldFinger1969 Well-Known Member

    Are you saying that most dealers are ALWAYS buying so they don't accidentally load up at a near-term top and get stuck with lots of gold at $2,000 an ounce when it then retreats back to $1,850 and you lose money on virtually every coin you bought for resale ?
  10. Collecting Nut

    Collecting Nut Borderline Hoarder

    A smart dealer will stop buying as the market heads down. When the market starts dropping people sell but it’s hard for the dealer to find a buyers. Yes they will adjust their prices to compensate.
    Mr. Flute likes this.
  11. Mr. Flute

    Mr. Flute Well-Known Member

    Maybe some did/do. Consider the concept of loss leader.
    Heavymetal and GoldFinger1969 like this.
  12. eddiespin

    eddiespin Fast Eddie

    LOL, that's true!
    Collecting Nut likes this.
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