Gold buy/sell spread question
ajaan
Posts: 17,369 ✭✭✭✭✭
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?
DPOTD-3
'Emancipate yourselves from mental slavery'
CU #3245 B.N.A. #428
Don
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Dang....imagine stocks trading with an 8% spread. Real estate with a 6% spread is bad enough.
Knowledge is the enemy of fear
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...
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.
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.
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.
The whole worlds off its rocker, buy Gold™.
We are paying 99% and selling at +40, if I try right. Gotta check around and compare.
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.
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
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.
DPOTD-3
'Emancipate yourselves from mental slavery'
CU #3245 B.N.A. #428
Don
Probably not.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
Spreads are fine, until you bend over and spread the cheeks.
You sell at 1% back of spot on the retail side?
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.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
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.
Too funny not to quote. Irrelevant to the discussion.
Knowledge is the enemy of fear
Too funny, you're the one who brought it up:
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Yup...spreads.
Cap gains are not spreads.
You have anything relevant to contribute? Maybe an 8% off Ebay coupon or something?
Knowledge is the enemy of fear
The difference between buy and sell, including expenses, is the full spread. Those that pay their taxes understand this.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
is there a prospectus for derryb posts?
Actually, no. But because I know you like cute pictures.
Knowledge is the enemy of fear
Business illiteracy by dbc...
LOL, father and son tag team trolls.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Wow great comeback, you running for office somewhere? let us know so we can donate
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.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
https://www.investopedia.com/terms/s/spread.asp
Worthy of quoting.
Knowledge is the enemy of fear
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.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
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
Knowledge is the enemy of fear
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.