[noob question - be gentle] Buying 50k's worth of PM's

puddleduck

puddleduck

Member
Silver Stacker
I'm about to come in to a bit of cash as I've sold a property and was wondering the best way to search around for the best price. My ratio is 80:20 Au:Ag and I want 1oz gold bars and 10oz silver bars. When making a large purchase (for me anyway) do you stick to you one or two trusted dealers or do you use a shotgun tactic and try a whole lot of dealers hoping for the best price?

I was thinking of sending a few emails to about 3 or 4 dealers and asking them to put their best offer in by the next day 10am or something. Does this sound right? How do you get prices for large orders?
 
look at the buy and sell spread on various items

to me, it looks like the smalles spread is in ingots and cast bars

coins look nicer, but dealers may only see them in terms of spot price
 
If you're gonna go "all in", start a trading thread with your offer and dealers will probably PM you (they might have already :P).

Negotiate.
Start from below spot price and work your way up to spot.
Avoid paying over spot price. Don't go for premium bars if you want to get the most ounces for your fiat.

e.g. offer steps: 2% under spot price, 1.5% under spot price, 1% under spot price, 0.5% under spot price, spot price.

Also, in these "all in" cases, buying the dip is important as it will make a _significant_ difference.
Therefore, dealing with a single dealer is preferable to allow an easy lock-in.


You might also want to consider cost averaging over a few months rather than "going all in".
If you're not familiar with the market movements, it will give you a chance to tune your senses and deal with different dealers - eventually allowing you to compile a shortlist of dealers you trust.
I'd actually recommend that more than going "all in" if you're new at this.
Maybe cost average a few initial purchases, then at a later stage, spend the remaining amount on a dip once you feel you've got the hang of it.
 
jnkmbx said:
If you're gonna go "all in", start a trading thread with your offer and dealers will probably PM you (they might have already :P).

Negotiate.
Start from below spot price and work your way up to spot.
Avoid paying over spot price. Don't go for premium bars if you want to get the most ounces for your fiat.

e.g. offer steps: 2% under spot price, 1.5% under spot price, 1% under spot price, 0.5% under spot price, spot price.

.
Click to expand...

I am sorry but your advice is not practical.
Dealers here on this forum are not in the business of losing money, I pay a minimum of spot on gold and silver buyback.
Therefore the spot price is the floor.
Offering spot or below spot is wasting both the buyer's and dealer's time.
 
Good luck finding below spot items... unless you're buying a 15kg block you won't get spot ... heck even then I doubt you would from dealers.

On forums, maybe. I saw a member list a 5kg Ag bar here at around spot +-1% a while back.

I agree with AEL, don't bother with below spot offers, you're wasting people's time.
 
jnkmbx said:
Negotiate.
Start from below spot price and work your way up to spot.
Avoid paying over spot price. Don't go for premium bars if you want to get the most ounces for your fiat.

e.g. offer steps: 2% under spot price, 1.5% under spot price, 1% under spot price, 0.5% under spot price, spot price.
Click to expand...

As already indicated, waste of time. Dealers simply can't buy investment bullion under spot, and they certainly won't sell it for spot or less. There's no magical wholesaler selling 1oz bars to dealers under spot.
 
i would wait for perthmint to release the 2012 lunar series, then drop 50k on the gold dragons.
only 30k minted

you'll be paying ~$60 above spot for coinage, but in 10 years time, the premium will be well worth it...
not to mention it should be dead easy to sell later on

even trying to buy a 2010 tiger gold 1oz, you will be paying more then $60 over spot for it atm...and thats just one year gone!
 
puddleduck said:
I'm about to come in to a bit of cash as I've sold a property and was wondering the best way to search around for the best price.
Click to expand...

In my opinion, deciding on what you want and simply calling some dealers (or private messaging some of them here on this forum) and asking for quotes and availability.

With my first order last year, I made the mistake of believing that they had stock when they said they had stock on their website. Don't do that.

With the amount you are spending, you should be able to get a substantial deal.
 
unfunkable said:
i would wait for perthmint to release the 2012 lunar series, then drop 50k on the gold dragons.
only 30k minted

you'll be paying ~$60 above spot for coinage, but in 10 years time, the premium will be well worth it...
not to mention it should be dead easy to sell later on

even trying to buy a 2010 tiger gold 1oz, you will be paying more then $60 over spot for it atm...and thats just one year gone!
Click to expand...

But if you wait till late September for lunar dragons couldn't the gold price be a lot higher by then? Wouldn't it be better to buy gold sooner if it dips?
 
jnkmbx said:
Negotiate.
Start from below spot price and work your way up to spot.
Avoid paying over spot price. Don't go for premium bars if you want to get the most ounces for your fiat.

e.g. offer steps: 2% under spot price, 1.5% under spot price, 1% under spot price, 0.5% under spot price, spot price.
Click to expand...
Tell me who you are dealing with with prices like that - I would like some of the action. Typically, after a lot of hunting around, I am paying circa 4-5% overspot for coins.
 
its a gamble i guess.
IMOk the premium it will command in the long term will be more then what gold goes up between now and september.....pending alot of factors( usa default etc)...who knows- might wake up 3rd of august and gold is 2k...lol

just checked apmex: gold dragon 1oz going for 2.5k
fair enough the average joe will not buy it for that much, but maybe 2k...i think thats doable
 
The thing is, not all stock was bought at the current spot price - it could have been bought a few weeks ago at a lower spot price ;)

e.g. Bought at 33 + premium (say 37), sold at 39.

Someone had to say it =_=
 
jnkmbx said:
The thing is, not all stock was bought at the current spot price - it could have been bought a few weeks ago at a lower spot price ;)

e.g. Bought at 33 + premium (say 37), sold at 39.

Someone had to say it =_=
Click to expand...

Dealers trade by tracking the spot rate. Find me a dealer out there that sells below spot LOL.

They do this because they sell at the current spot + premium then restock at current spot + lower premium.

The concept of dealership is not like your standard profit making business.

Simplified version:
You have stock of X oz, you sell that stock at what ever price (spot + Y), and you restock exactly X oz of the same stuff at (spot + Z), where Z < Y. You make the profit there (ie. Y - Z). You start and finish with the same physical X oz.
 
goldpanner said:
unfunkable said:
i would wait for perthmint to release the 2012 lunar series, then drop 50k on the gold dragons.
only 30k minted

you'll be paying ~$60 above spot for coinage, but in 10 years time, the premium will be well worth it...
not to mention it should be dead easy to sell later on

even trying to buy a 2010 tiger gold 1oz, you will be paying more then $60 over spot for it atm...and thats just one year gone!
Click to expand...

But if you wait till late September for lunar dragons couldn't the gold price be a lot higher by then? Wouldn't it be better to buy gold sooner if it dips?
Click to expand...

Yes, price could be a lot higher, could also be lower than now. At present no one can predict the economy. The past week has been quite an example of that.

The prediction was that PM will go up in price until Aug2. It did, only AUD also went up against USD. So, now if forex enters the fray, it becomes less clear cut.

It is an entirely different story if I am a U.S. citizen holding USD only.

Speculating on price of future product is basically trading futures, which brings you to the realm of paper trading and crystal ball reading.

By the way, I don't particularly like the design of the leaked dragon. If the leak was factual, I will be stocking very few, only to complete the collection. The series 1 coins are beatiful, it reminds me of classical chinese painting a well made one. This current series (2) does not tickle my inner asian fancy. For gold anyway.

I hope silver dragon fares better.
 
boston said:
Typically, after a lot of hunting around, I am paying circa 4-5% overspot for coins.
Click to expand...

I'd expect to pay higher for coins (it's basically a rule of thumb).
So I wouldn't suggest such aggressive negotiation with coins or premium bars. @_@


Edit: Spelling
 
fishball said:
The concept of dealership is not like your standard profit making business.
Click to expand...

Well there was that thread that discussed it somewhat....

I suppose I thought about it from a trading perspective more so than a dealers perspective.
e.g. Bars bought in the low 30s that can be sold in the high 30s.
 
jnkmbx said:
fishball said:
The concept of dealership is not like your standard profit making business.
Click to expand...

Well there was that thread that discussed it somewhat....

I suppose I thought about it from a trading perspective more so than a dealers perspective.
e.g. Bars bought in the low 30s that can be sold in the high 30s.
Click to expand...

Traders won't sell below spot even if they aren't losing money.

Why would they when AEL and Ozbullion for starters buy at spot or better.

Heck, even on forums if you listed a 10oz bar at spot I'd buzz that crap in 10 seconds if I see it.
 
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