If you don’t know, it’s not a good idea to clean your old gold coins. While you may think you’re doing someone a favor, it may not be to anyone’s benefit as they could be more valuable just the way they are. You could damage it and then it wouldn’t be worth as much. So leave the dirt and grime on the coin.
Selling Your Old Gold Coins
Gold dealers know about what’s called a “buy and sell spread.” They are talking about the difference between the price they pay a seller and what the seller will list the item for. It only makes sense that the dealers make a profit. Depending on the metal, the volume, and the dealer’s character, the buy-and-sell ratio can vary from 5% to 35%. If you’re an investor, you understand what it means to make a profit, but how dealers handle each transaction determines a dealer’s reputation.
Buying Gold Coins
Gold dealers make money by purchasing gold from the public. Many of the sellers are no more than small companies but can be marketing companies. This means, they don’t carry inventory, they only make the deals. Just think, when you sell old Gold Coins to a trader, he will then re-sale them to another gold dealer or wholesaler. This person will then make a larger profit and everyone is happy.
Why Buy-and-Sell Gold
There are no two ways about it. Gold sells in good times and bad times. “Gold has a proven track record for returns, liquidity, and low correlations, making it a highly effective diversifier,” says Juan Carlos Artigas, director of investment research at the World Gold Council. So what do investors look for when buying gold? Here are a few qualities:
- Returns: Gold outperforms other securities like stocks and bonds. However, it doesn’t always come out ahead.
- Liquidity: If you’re in the market for particular gold-based items, you can easily turn old gold coins into cash.
- Low correlations: Gold may go up when stocks go down or gold may go down if stocks and bonds are up.
On the same note, gold has other advantages:
- Diversification: Because gold is not related to other investments, it can change the look of some portfolios, actually taking away some of the risks.
- Defensive store of value: Investors frequently turn to gold when they realize there is a potential threat to the economy.
Those are only a few of the benefits of gold, but as an investment, it still carries risks and has its disadvantages. Although the old gold coins are valuable, one can never know when to purchase them. Gold doesn’t go on sale for the 4th of July or advertise the end-of-year close-out sale.
Because gold isn’t liquid, investors must rely on others to produce a cash flow. Businesses can make a profit from the volatile nature of gold prices. Many gold and silver dealers offer to liquidate old gold coins on a commission-free basis. What this means is there isn’t a hidden fee – You get the quoted price and nothing can take away from that.
Tip: If you are aware of any products that are in short supply, then you may be able to get a higher price to buyback.
A wise buyer knows how to quickly sell old gold coins to the highest bidder. If you’re a gold dealer, you need to make money just as any other business. However, you should be careful when doing business with people you don’t know online. Check their ratings by reading more than one review website, but don’t stop there. Shop around to get the best deal possible.