Robert Rogers
When you have physical gold to sell to a bullion dealer it is important to know what you need to know what the spot price of gold is. The retail price of gold bullion is usually about 2 to 20 percent above the spot price. This price is known as the premium. What this means is that a bullion dealer makes 2-20% profit when he sells. It could be more depending on the type of gold being sold. When you sell your used gold to a gold bullion dealer, this isn’t what you are likely to get for it. What you will get for your gold is usually slightly below the spot price. hat What a bullion dealer pays for your unwanted gold is different depending on the form and the source of the gold. The dealer has to determine what the quality of the gold is.
Bullion bars and coins that are produced by international refineries accredited or regulated by the London Bullion Market Association (LBMA) the authority on gold quality are preferred by lots of bullion dealers. They will usually pay a good amount of money for gold produced by these refineries. Popular LBMA accredited refineries include the likes of Valcambi, PAMP Suisse, Argor-Heraeus.
Bullion dealers get their gold from the main sources, refineries, second-hand recycled gold, and discounted gold sourced from other countries like Africa.
#1. Gold from refineries
Refineries are the main sources of fresh bullion. The LBMA has a list of refineries known as the good delivery list. This contains gold producers that subscribe to the processes, integrity, and quality defined by the association. When you buy gold from these refineries assure you of the quality and purity of the gold product. These can be traded on the international market very easily. Refineries charge their own premiums. Bullion dealers typically pay 0.15% to 0.30% premiums on the gold bought from refineries.
#2. Second Hand Gold
Bullion dealers can also get their gold from investors who sell their used gold for cash. A lot of people buy gold as a hedge against inflation and as insurance. Gold can be useful when you need money. Bullion dealers usually buy back gold bullion from clients. They pay a little less than the spot price making a profit by buying low and selling when the market price is high. The price a gold dealer is likely to charge could be less than 2 or 10 percent less the spot price of silver. For instance, if you had a 100-gram gold bar, a gold dealer could buy it for -2+ to -10% of spot which means he gets to make a profit of +2% to 10. Second-hand gold can be anything from gold bullion coins or bars to scrap gold like gold jewellery. When it comes to scrap jewellery, a gold dealer resells to refineries that melt and refine the gold to make fresh gold bullion bars.
#3. Discounted Gold
Some dealers can buy big amounts of gold from mines. Usually, small-scale miners especially from Africa will offer as much as 50kg of gold at a discounted price. These deals aren’t known to be the very best as a lot of scammers lure investors with promises of easy money. They may offer discounts of 30 to 50 percent. You will find a lot of these offers online and once in a while, you might get an email with an offer of untold amounts of gold from some mine in Ghana at incredibly discounted prices. A lot of these are scams but it is possible to get great discounts from legitimate small-scale mines. Big mines will usually not sell their mined gold to bullion dealers.
Of the 3 main sources of gold, second-hand gold has less risk. It is often a safe and cheaper way for bullion dealers to profit from buying and selling gold. It is easier for gold buyers to get gold from their own customers. Ask your dealer if he has a buy-back policy. This will make liquidating your bullion when you need to much easier and more convenient.
