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How to Sell Gold and Silver Bullion

Get the Best Price When Selling Bullion

Written by Luke Burgess
Posted April 13, 2016

People often talk about buying the many different forms of gold and silver bullion.

But rarely is the topic of selling bullion addressed.

And of course, unless you are holding gold for survival purposes, you're eventually going convert your physical bullion back into some other form of currency... You're going to sell.

Here's the best way to do that.

First, let me tell you that I am in a selling mood right now.

Even if you were buying gold or silver on Monday morning, you'd be sitting on a 1.5% gain in gold and a 4.5% profit in silver — and that's not bad for just two days.

Don't ever be afraid to take a profit — even modest gains add up.

I sold off some of my gold and silver positions yesterday afternoon, including one of the stocks we talked about here in Energy and Capital.

Back on March 9, I brought Tahoe Resources (NYSE: TAHO) to your attention. At the time, I said:

I bought several hundred shares at $9.77 on Monday. And I would have bought more yesterday on the dip but I simply didn't have the free capital in my account to make a purchase worth it.

I'm looking to take a 30% to 40% gain in three or four weeks on rising silver prices, bullish speculation on 1Q 2016 earnings, and excitement building around the launch of commercial production at Shahuindo. But over the long term, I do think the stock will see higher gains.

At last look, shares of Tahoe were trading at about $9.25. I'm going to try to pick up some more shares while the stock is under $9.50. I think you should too. I'll keep you up-to-date on what I'm doing with my position.

Well, here we are five weeks later with a 29% gain if you bought at $9.50 (at last look, TAHO was at $12.29). So I'm a week over my high and one percent under low prediction — come on, that's not bad.

I still believe the company has great potential over the long term. But take the money. I mean, that's the whole point here, right? You can always buy again later.

I'm even selling a little bit of physical bullion into the recent strength — which is what I wanted to talk with you about today.

Selling physical bullion should be treated the same as buying in terms of shopping around.

Different bullion dealers are going to have different premiums (the additional charge over spot prices) on the gold and silver they sell.

In the same way, different bullion dealers are going to pay different prices for the gold and silver they buy. So it's best to carefully review all of your options when it comes time to divest.

These are generally going to be your options:

  • A private individual
  • A local bullion dealer
  • An online bullion dealer

Now, I think we can just go ahead and scratch the first one right off the list. Selling a large quantity of bullion to a private individual is simply not worth the risk — unless, I suppose, this individual is a family member or close personal friend. But in general, you already know the risks of meeting a stranger to sell anything.

So you're going to want to sell your gold and silver to either a local bullion dealer or an online dealer.

In my experience, I've found that both local and online dealers will purchase bullion at nearly the same price.

Many online dealers will claim they pay more for bullion. And while that may be true, the cost of shipping and insurance generally outweighs the few extra bucks you might get from an online dealer.

Both local and online dealers will pay about 1% over gold and silver spot prices for any government-minted gold or silver bullion. That would include:

  • American Eagles
  • Canadian Maple Leafs
  • Mexican Libertads
  • Austrian Philharmonics
  • Australian Kangaroos or Nuggets
  • British Britannias
  • Chinese Pandas

They may pay a little more for South African Krugerrands (although consumers also pay a higher premium for these coins) and a little less for any privately issued rounds. But in general, I'd say to expect about 1% over spot for gold and silver bullion.

Right now, APMEX is buying random one-ounce American Gold Eagles at 1.03% over spot.

I just sold several one-tenth-ounce gold and one-ounce silver coins to a local dealer yesterday for 1.00% over.

So yes, online dealers probably do pay a little more than a local dealer for bullion.

But selling bullion to a local dealer means an immediate liquidation in cash or a certified check for large transactions.

And most importantly, there are no shipping and insurance costs.

Using the shipping and insurance calculation tool on FedEx's website, the insurance on a package with a declared value of $50,000 would be about $600 — that's about 1.2%.

I know...

Everyone has to take a little piece, don't they?

Well, Mr. and Mrs. FedEx have to send their kids to college, too.

There's only one minor benefit to selling bullion to an online dealer (and only to some)...

If you don't live anywhere near a local bullion dealer, selling bullion to an online dealer is probably your best bet.

At the end of the day, I think it's always best to sell physical bullion to a trusted local dealer.

To start looking for the closest and most reputable bullion dealer near you, I'd recommend first checking out the U.S. Mint's “Bullion Dealer Locater” on its website.

Don't be afraid to take profits,

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Luke Burgess
Energy and Capital

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