You may have noticed that selling prices on gold and silver bullion can differ greatly from different bullion dealers. Bullion prices differ quite a lot from one dealer to another, depending on quite a few factors:
- Stock Levels
- Competition
- Sources
Firstly, stock levels can allow for different pricing on different products. For example, if we have a large buyback at Guardian Gold that bring our stocks levels much higher than our average holding, we may look to have a sale on those items and can price them very competitively until stock levels return to a normal level. It pays to keep coming back to the websites specials page to see the latest deals and sales.
Competition between dealers will keep premiums tight across the market. Many dealers have a unique offering or are based in geographical locations that mean they have additional delivery costs. All of our pricing includes delivery to either Sydney or Melbourne Guardian Vaults. Some dealers specialise in the more collectable/numismatic side of the market for rarer coins. These tend to have much higher premiums, so may look quite expensive in comparison. Be careful, as it can be difficult to sell collectable gold or silver coins back to dealers at a premium, as most pay spot or less regardless of the rarity of the item, or the high premium you might’ve paid initially. We feel that investors are often better off with the lowest premiums possible, so we don’t deal in collectables and stick to the basics.
Bullion prices globally are very similar across the board. However, some brands are much more expensive than others. The source of the bullion impacts its price but the main thing to consider is the question: where you are going to sell the investment in the future? For example, if you intended on moving overseas and taking bullion with you, you might consider paying a little bit extra for a premium brand such as Perth Mint or PAMP. If you are selling silver domestically or back to Guardian Gold, then the lowest premium bars and coins seem the best option as we have the same buyback rate on our own branded product as we do with premium products such as Perth Mint Kangaroo coins.
Bullion Storage options and prices also differ greatly between dealers. There are some important questions to ask your bullion storage provider to best understand the different storage products:
- Is the bullion stored physically allocated?
- Is it segregated from other holdings?
- Is it an asset on your companies balance sheet?
- Is it protected in the event of company liquidation?
As gold and silver bullion investment is not classed as a financial product in Australia, there are many bullion storage options out there that have company liquidation risk. The World Gold Council highlights that ‘unallocated’ bullion storage and similar products often mean the customer is an ‘unsecured creditor’ to the bank or bullion dealer providing that service.
At Guardian Vaults we only store allocated physical metals, which are off-balance sheet and do not have company liquidation risk.
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