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Dealer's buy price? Below or above the spot?
Knell
Posts: 456 ✭✭✭✭✭
I've been selling off my coin collections. Almost sold off my gold coins. I just realized if I'm getting a good price for what the dealer's been paying me. Here's an example, yesterday I sold a 2006 Buffalo 1oz Gold NGC PF69 UC for $3204 and the spot price from Kitco (looking at the stores PC monitor on the wall) was $3347. Can someone please explain to me how the dealers figure out the buy price and sell price for a gold and/or silver coins?
Thanks for any input from anyone here. It's been a while since I logged in here due to, I lost interest in coin collecting that is why I'm selling off my collections (still a long way to go). I still do collect medals though especially cathedral medals by J.Wiener.
Thank you again.
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You need to ask that dealer. They don't all do it the same way. They also don't do it the same way all the time.
Sometimes, for example, the sell price of gold is +$150 in which case they may pay spot or +$50. Other times, the sell price is at +$50 in which case they might be at $50 below or so.
In general, i would not take less than 98% for any high purity sovereign gold. But a lot of it depends on who is accessible to you.
I agree with @jmlanzaf regarding this issue. Some dealers have a +/- dollar spread for bullion coinage or high purity sovereign gold while others use a percentage basis.
It appears you sold at about 95% of bullion, which in my experience is too low to sell for a proof Buffalo, but again if you have limited local opportunities and do not want to ship the coin for a few extra dollars then that is what you have available. Larger online dealers such as APMEX, JM or SD appear to be selling generic proof Buffalos at 105% of bullion, so you know they are paying less than that to obtain new material and you would have to call to find out how much less.
In honor of the memory of Cpl. Michael E. Thompson
I do not know all the details (e.g., minimum purchase amount, shipping costs, etc.). And, I am NOT endorsing them, because I have not compared multiple options.
That said, it appears that JM has a fairly robust 'do-it-yourself' option for selling online (i.e., no calling required). Currently, it has 'sell-to-us' pricing listed for > 400 different items, including the subject coin.
Link: https://www.jmbullion.com/my-account/buyback-products/
Disclaimer - I have no affiliation with JM. Just happened to stumble across their "online" option recently.
In my area there is a gold buying arm of a large local jewelry store. They advertise on TV that they are now paying a 25% premium over their regular buy price for gold. What does that tell you about their regular buy price for gold?
95.7% of melt is not terrible for one coin, that I assume you did not have to ship.
On a 5 ounce or larger deal it might be worth shipping to a higher buyer.
30+ years coin shop experience (ret.) Coins, bullion, currency, scrap & interesting folks. Loved every minute!
It probably varies on location but here on the left coast proof buffaloes are normally bought at spot/melt. It seems many in the public do not understand that ratios of numismatic premiums to bullion valve are not linear. As bullion valves increase many past numismatic valves have just evaporated away.
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Apmex, JM Bullion, Provident are all good options. You can sell on ebay if you have a top rated and store account and list as "bullion" and "other bullion" and can get the rates down to the least but will still pay around $150 on an ounce of gold in whatever form.