Finding a reputable “Bullion Dealer”
A Bullion dealer” is a name of a dealer who specializes in Gold and Silver Bullion. But, what exactly does it mean, and is it any different to a gold buyer.“Dealer” is a term used to define a company or person trading a commodity like gold which is ready to buy or sell. Technically, in the precious metal industry a bullion dealeris someone who is standing ready to bid or offer a price for physical gold or silver bullion bars and coins. Often a bullion dealer will distribute these products to the public and self managed superfunds. However because markets like the gold market is so unique bullion dealers also buy back gold and silver bullion products to add to their inventory or on sell to refineries. There are undoubtedly the most important players in the market place and they will always be interested in buying and selling bullion – that’s after all the definition of their business is after all. Reputable bullion dealers always present the best buying and selling prices subject to the international spot price and the supply and demand of markets. A bullion dealer will mark-upa gold bar a little over the spot price and buy back at a discount a little under the spot price. This is how bullion dealers make their margin and it is known as the spread.
Gold has been on a bull run for some time now due to high inflationary government policies.The demand for gold has been high and new gold suppliers have emerged in the market to help meet the demand. Some bullion dealers have managed to build a good image for themselves, others provide shoddy service and they may not even be transparent about who they are and the price that they charge. Fraud is prevalent in this industry which is why anyone looking to approach a bullion dealer to either buy or sell their bullion should do proper research on the company before committing themselves to doing business with a particular dealer. Here is a checklist of things you should go through with the respective bullion dealer.
- What are the spreads? How much over spot do they charge for products?
- What brands do they sell? Do they sell LBMA or local brands or both?
- Do they have a good reputation?
- Do they have verifiable references? You can get reviews on the company on the internet but always check with highly reputable sources.
Do a comparison of the prices from different service providers. This means you should know how the pricing is done, so you can compare like with like. Make sure this is done within a short time frame as the international spot price can change fast.
One last tip, a good bullion dealer will not pressure you to sell or buy and should be knowledgeable about the markets. You should be able to do what you want with your money and your bullion. If a dealer makes you feel pressured to do business with them, walk away.