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Live Spot Prices:

Gold Ask 1,229.41 -16.38 Open: 1,246 High: 1,244 Low: 1,228
Silver Ask 17.23 -0.03 Open: 17.26 High: 17.31 Low: 17.10
Bullion Deal of the Year, Part 2! - 2014 British Silver Horse Coins Available for $1.69 Over Spot 1-499 Qty, $1.49 Over Spot 500+ Qty

Sale Price vs. Spot Price

Now that you know a little bit more about the process of selling your gold and silver products (both online and offline), we are going to address a commonly asked question in the gold and silver markets: “Why do I have to sell below spot price?”

Buy vs. Sell Prices

All individual gold and silver investors face the same problem when buying and selling physical metal: they have to buy slightly above the gold or silver spot price, but have to sell at or slightly below spot price.

The reason for this is simple: while precious metal retailers may pay you spot or slightly below spot for your products, the retailers still have plenty of overhead costs just to stay in business. When you include a retail company’s website expenses, office rent, employee wages, shipping and refining expenses, insurance, etc, the company has to charge customers a small premium over spot simply to cover costs and stay in business.

Due to the fact that all precious metal traders, regardless if they are online, offline, on eBay, in a pawn shop, or elsewhere, have overhead costs and other expenses, there will always be a small spread between buy and sell prices. You can compare this to the commissions that stock brokers charge when buying or selling stocks on your behalf.

Finding the Lowest Spreads

Although it’s impossible for an individual investor to buy and sell metal at the same price relative to spot, there are steps you can take to ensure your buy-sell spread is as low as possible:

  • Deal in volume. Typically, the more metal you are buying or selling, the better price you will get. Some metal purchasers have fixed prices for selling to them regardless of volume, but virtually all retailers will give you breaks when you are buying from them in volume. Also, if you are buying online, many companies (including JM Bullion) offer free shipping/insurance on larger orders, meaning that you stay as close to spot as possible.
  • Shop around. Always check multiple websites, local shops, or even eBay to try to find the lowest price relative to spot when buying, and the highest price relative to spot when selling.
  • Take care of your metal. Make sure to keep your precious metal products in top condition. Tarnished or otherwise dirty items will typically sell for less than pristine items, even though both contain the same amount of metal.

By paying close attention to your prices relative to spot, both when buying and when selling, you can ensure that you pay the smallest premiums when transacting physical precious metals.

The last section of our guide is our Precious Metals Glossary, which will help you understand the industry-specific terms used in this guide. Other than the glossary, you have completed our Beginner’s Guide to Precious Metals! Congratulations on your new education, and feel free to browse our gold and silver products if you are considering making a purchase.