I know it's been posted before, but I can't find the answer to my question. When selling gold to a B&M dealer, what percentage of spot would/should the dealer pay? Thanks.
It depends on the dealer, the coins involved, and the market conditions. I went into my local B&M the other day when gold was around $1830. I asked what he was paying that day for Krugerrands. His answer; 92% of spot, it worked out to be around $1684 per coin or so, seemed like a little to much of a cut for me. Most of the time he pays 95% of spot for Krugerrands. But since the spot price had shot up $60-70 in the previous couple of days, he was increasing his margin to protect himself from a big drop on the backside. In a market like this, with the kind of dramatic swings we've seen recently in PMs, the dealer's have to protect themselves too.
Race makes an excellent point...the market will dictate, to a large degree, the risk a dealer is taking by holding coins. Other factors include his relationship with other buyers (smelters perhaps? customers desiring a certain metal or coin? etc) and the amount of bullion you're bringing in. He can accept a smaller spread on a larger amount of bullion, for example. Finally, the local area will have an impact as well. Are there 3-4 other B&M shops nearby, or is this guy the only game for an hour in any direction? Is there an active community of collectors in the area who might be interested in a particular coin or metal, or is it dead? Expect also to take a bigger hit on silver, due to its volatility, than on gold. As Race said, he felt 92% was too low for an oz of gold, but most of us would kill to find 92% from a dealer on junk silver. And finally, as mentioned above, the form of the bullion matters. American Eagles sell better than some non-US bullion coins, and nearly all bullion coins sell better than US 90% junk silver. Private bars/rounds fall somewhere in between, depending on the area and assayer. Last but not least, things like 40% US Kennedy halves and 35% war nickels are at the bottom of the heap. ============= As a general rule, I'd probably walk from any dealer/table/offer that wasn't at LEAST 90% of spot, unless there was an AWFULLY compelling reason for it to be so low. For bullion coins that carry a bit of a premium, like Eagles, Maples, Krugerrands, like Race above, I'd be thinking more in the 95%-ish range.
Very early this year I was selling gold and the best prices I found, without a lot of work, was Heritage Auctions for some and APMEX for bullion. apmex 800-375-9006.
