Gold buy/sell spread question

ajaan

With gold hitting $1500/oz. my brother decided to try to sell a Canadian 1oz Gold Maple Leaf. He called a very high volume bullion dealer in this area and told him they pay spot -5% and sell for spot +3%. Is the normal spread?

cohodk

Dang....imagine stocks trading with an 8% spread. Real estate with a 6% spread is bad enough.

rawteam1

There is no normal spread and there never has been one, even though, much like dbc’s Gold Silver ratio mantra, it’s drivel, there seems to be one...

Pokermandude

That's a pretty typical spread among Canadian retail coin stores who aren't crooks. I buy 1 oz GMLs at -3.5% and sell at 3% over.

MilesWaits

Ouch. Owwie...But, there’s no shortage of dealers selling nearest spot.
Once again, as it has been said frequently, don’t rule out the BST forum.

blitzdude

Yep as buyers we overpay as sellers dealers prey and take advantage of our ignorance. Investing in physical metal certainly isn't an short term play. It's even debatable if it's a good long-term play. All I do know is I sleep like a baby at night.
Be frugal of both your buys and sells and one day you will have a $hitload of dollars. Stack on.

Jinx86

We are paying 99% and selling at +40, if I try right. Gotta check around and compare.

jdimmick

In the crappy area where I live, we buy at 95-6% and sell at 99%. (1/2 oz coins and larger), the smaller, I can buy/sell usually at normal levels.

ricko

I find the various buyers in the area (jewelers, pawn shops) here to be rip off artists....and do not even bother with the antique shops... they think silver is gold and gold is diamonds... Not that I would ever do business with any of them, but I check periodically just to monitor the local market...Cheers, RickO

ajaan

The dealer my brother called asked if he bought the gold coin from them; he didn't. I wonder if they would have offered higher if he had bought it from them.

PerryHall

@ajaan said:
The dealer my brother called asked if he bought the gold coin from them; he didn't. I wonder if they would have offered higher if he had bought it from them.

Probably not.

TwoSides2aCoin

@cohodk said:
Dang....imagine stocks trading with an 8% spread. Real estate with a 6% spread is bad enough.

Spreads are fine, until you bend over and spread the cheeks.

oldstandard

@jdimmick said:
In the crappy area where I live, we buy at 95-6% and sell at 99%. (1/2 oz coins and larger), the smaller, I can buy/sell usually at normal levels.

You sell at 1% back of spot on the retail side?

derryb

Spreads are the profit margin for dealers (after other expenses). No spreads, no dealers.

And FWIW stocks do trade with a spread. It's called capital gains taxes.

oldstandard

@cohodk said:
Dang....imagine stocks trading with an 8% spread. Real estate with a 6% spread is bad enough.

Could you imagine if real estate was around $1500 they would be at 60% . The Silver spread is always higher around 10 to 13 percent it seems like there is an industry standard of buy .50c back sell $1.50 over. Where we live it is buy .50c back sell $2.25 over gold $50 back and sell $40 over I can get it cheaper from the big guys but I support the old guy it is a small town and he could never sell anything at those price I am just thankful to go to a coin store where I live to be honest.

cohodk

@derryb said:

And FWIW stocks do trade with a spread. It's called capital gains taxes.

Too funny not to quote. Irrelevant to the discussion.

derryb

@cohodk said:

@derryb said:

And FWIW stocks do trade with a spread. It's called capital gains taxes.

Too funny not to quote. Irrelevant to the discussion.

Too funny, you're the one who brought it up:

@cohodk said:
Dang....imagine stocks trading with an 8% spread.

cohodk

Yup...spreads.

Cap gains are not spreads.

You have anything relevant to contribute? Maybe an 8% off Ebay coupon or something?

derryb

The difference between buy and sell, including expenses, is the full spread. Those that pay their taxes understand this.

rawteam1

is there a prospectus for derryb posts?

cohodk

@derryb said:
Difference between buy and sell, including expenses, is the spread.

Actually, no. But because I know you like cute pictures.

rawteam1

Business illiteracy by dbc...

derryb

LOL, father and son tag team trolls.

rawteam1

Wow great comeback, you running for office somewhere? let us know so we can donate

derryb

Much rather see you mature to the point where you can contribute to an actual discussion. You and your daddy make a good case for a forum minimum age limit.

MsMorrisine

https://www.investopedia.com/terms/s/spread.asp

cohodk

@MsMorrisine said:
https://www.investopedia.com/terms/s/spread.asp

Worthy of quoting.

derryb

From your link worthy of quoting:

"In finance, a spread refers to the difference between two prices, rates or yields"

The OP is asking a question about a dealers bid/ask spread.

I simply pointed out that a buyer should look at his full (actual) spread that includes his complete transaction expenses when comparing bullion deals. While Dealer A might have a more appealing bid/ask spread than Dealer B, it is important to also consider the additional costs of the transaction (i.e. shipping, type of payment fees, etc.). In reality doing business with Dealer B may end up costing the buyer less. There is more to look at than just bid/ask prices when evaluating a dealer.

cohodk

Yup...i see capital gains are an important consideration when evaluating a dealer. Too funny. Lol

I think the over all point here is that PMs can carry wider spreads than most other assets and that if one is really concerned about 1 or 2% then they are focused on the wrong thing

MsMorrisine

@derryb said:

There is more to look at than just bid/ask prices when evaluating a dealer.

there is more to look at than just the spread. shipping for instance is a cost to be consider above and beyond the spread.

"In finance, a spread refers to the difference between two prices, rates or yields"

prices not costs.

don't make me get out the shovel picture.