When selling GOLD don’t do this !!

Discussion in 'Bullion Investing' started by mpcusa, Oct 22, 2023.

  1. mpcusa

    mpcusa "Official C.T. TROLL SWEEPER"

    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.
    fretboard and Dynoking like this.
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  3. rte

    rte Well-Known Member

    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
  4. slackaction1

    slackaction1 Supporter! Supporter

    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.
    fretboard likes this.
  5. eddiespin

    eddiespin Fast Eddie

    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.
    Mr. Flute likes this.
  6. atcarroll

    atcarroll Well-Known Member

    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.
    eddiespin likes this.
  7. eddiespin

    eddiespin Fast Eddie

    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.
  8. -monolith-

    -monolith- Supporter! Supporter

    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.
    slackaction1 likes this.
  9. eddiespin

    eddiespin Fast Eddie

    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.
    masterswimmer likes this.
  10. kaosleeroy108

    kaosleeroy108 The Mahayana Tea Shop & hobby center

  11. fretboard

    fretboard Defender of Old Coinage!

    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!
    mpcusa likes this.
  12. mpcusa

    mpcusa "Official C.T. TROLL SWEEPER"

    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.
  13. mpcusa

    mpcusa "Official C.T. TROLL SWEEPER"

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

    mpcusa "Official C.T. TROLL SWEEPER"

    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 !
  15. mpcusa

    mpcusa "Official C.T. TROLL SWEEPER"

    Everybody has to make money but it’s about
    being fair after all.
    fretboard likes this.
  16. eddiespin

    eddiespin Fast Eddie

    Right, you're there to rip them off.
    masterswimmer likes this.
  17. rte

    rte Well-Known Member

    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?
    Last edited: Oct 23, 2023
  18. rte

    rte Well-Known Member

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

    pmbug Taking steps on my thousand mile journey

  20. mpcusa

    mpcusa "Official C.T. TROLL SWEEPER"

    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
  21. rte

    rte Well-Known Member

    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 :p
    Everyone is happy.
    mpcusa likes this.
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