Selling precious metals
Unless you have been living under Chris Rock for the last year or so, you know that precious metals have gone through the roof lately. Gold and other metals have seen increases like no other investment and are at all time highs in recent months.
Several years ago, metals were starting to climb and I decided to sell off a bar of platinum. Having moved to another state since the silver "megabar" incident, I found the need to locate a dealer to whom I could sell this commodity. A search of the Yellow Pages yielded a dealer in the area who dealt with coins and bullion. As an independent proprietor, he worked by appointment only. I thought it somewhat formal to set up an appointment just to cash out a platinum ingot, but why not, so that's what I did.
Platinum was selling for about $625 an ounce, so I had the figure "six hundred or so" dancing in my head as I entered his "store," which was really just an office in a big old building in town. I knew there was a trading fee, as was true in my earlier transactions, but still I was somewhat disappointed when the quote he gave me was quite a bit less than $625. It was like $577 or so, or about a seven or eight percent fee for buying my ingot. Oh, well, I walked out with a check for over five and a half bucks more than I had walking in, so what the heck.
Anyway, I digress. In 2006, metals prices have come a long way since then, and it looked like it was time to sell again.
Only this time, I wanted to sell a little smarter. There was a website on which I had been following metals prices, Kitco, a precious metals retailer with offices in the United States and Canada. It occurred to me that I should look there to determine if and how one could sell bullion coins and ingots to them and at what costs.
Well, Kitco does indeed purchase bullion products, and at a great price over the little local independent dealers. I decided to try out their service by sending them a gold coin and a platinum bar. Though it took a little longer than I initially expected, (they later told me they were incredibly hit by the numbers of people wanting to sell off precious metals with the rising values,) eventually I got my check, and kept a sizable portion of what would have gone to trading fees to the local dealer.
That was for gold and platinum - metals that have great value for very small amounts of product. In other words, a single ounce of gold at over $600, or a single ounce of platinum for over $1200 was very "efficient" to ship and sell. Small shipping costs yielded a big check in return.
Silver, on the other hand, is not so efficient. With silver prices being about one fiftieth (1/50) the value of an equal amount of gold, or about a hundredth the value of platinum, you could see that the shipping costs could easily eat up some of the gain if sold by mail.
As circumstance would have it, I still had ninety ounces of silver left from the "change" of that megabar. I guessed it would be cost prohibitive to send such a large package to an online firm, (after all, 90 Oz weighs more than five and a half pounds!) so once again, I called my local "guy" to see what his silver buying prices were. Lo and behold, he was paying a price that made mailing the goods to Kitco seem downright reasonable. (He probably buys from the masses and sells to Kitco, I was beginning to believe.)
Long story short, I ended up sending the silver to Kitco, along with the remainder of my holdings in gold and platinum. Over time, I sold most of the precious metals I held and have walked away with a couple grand in proceeds.
Not a bad way to end the day, mind you.
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