Unallocated Bullion

Discussion in 'Gold' started by betterinvestmentthanshare, May 2, 2020.

  1. betterinvestmentthanshare

    betterinvestmentthanshare Active Member

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    Just wondering in a gold bubble which has been popped and a fast vertical fall in price is happening,
    how does the small bullion dealer stay afloat to pay out everyone's unallocated.
    Could it be potentially worse than a bank run?
    Will they have the funds to pay everyone out?
     
  2. mmm....shiney!

    mmm....shiney! Well-Known Member Silver Stacker

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    Sell before it pops.
     
  3. Davros10

    Davros10 Well-Known Member Silver Stacker

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    I'd expect the dealer to do ok. Most people will fail to pick the peak and will ride the price (in hope) all the way down.
     
    RichardAL likes this.
  4. SilverDJ

    SilverDJ Well-Known Member

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    Wouldn't be the first time we've seen dealers and unallocated accounts go bust.
     
  5. Ag bullet

    Ag bullet Well-Known Member

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    unallocated means you haven't been allocated any.
     
    Skyrocket and 66rounds like this.
  6. shinymetal

    shinymetal Well-Known Member

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    The dealers do, or are suppose to have metal backing the account, just not a specific bar for you, maybe it's a portion of a 1000oz bar, but in theory if you wanted to take out 100oz, they should have a bar for you.
    If people want to exit large positions in cash the dealer should have a way to quickly liquidate the metal they own to get cash to the seller.
    Assuming they are backed and haven't dodged it up.
     
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  7. GoldenEye

    GoldenEye Well-Known Member Silver Stacker

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    I'm fairly sure that most dealers use some type of bullion derivative to protect themselves from big moves. So it probably makes no difference to them if it's going up or down, as they make their money from their margin and increased turnover.
     
    bron.suchecki and Silverling like this.

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