It seems that in the last decade, gold dealers are growing in number.  There are a lot of physical and online gold dealers which makes for healthy competition. However, gold dealers are all different. They conduct their businesses in different ways. You can find as much information as you need about selling gold and about reputable buyers who will pay you top dollar for your gold, however, there are still some closely guarded secrets that only insiders would know about. Let’s let you on a few of these, so you get a better idea of what you are getting yourself into when you start investing in gold.

Selling and buying gold is not as easy as some gold dealers would make it out to be. Ignorance or lack of knowledge can be costly. Physical gold dealers are still the best ones because you deal with actual human beings who will care enough to know your name and even your story as far as gold bullion is concerned. Online gold dealers have the luxury of hiding behind a website. This perceived anonymity means the customer service is not that important and more often than not, the bullion dealeris trying to get you to commit quickly. Don’t.

They will take advantage of your lack of or limited information on when you go to sell gold bullion

They say it is advisable to buy your gold from a dealer with a buy-back policy. However, one little known secret with these dealers is that when it’s time to sell gold bullion, the price might not be as attractive as you would have expected. Generally speaking, high priced, expensive companies tend to have a more aggressive bid price and will most likely pay more when it’s time for you to sell.

A larger gold dealer might have a more aggressive bid price

If there is one little secret that gold dealers would not want you to know about, it’s this: when you buy or sell gold bullion the dealer takes on counterparty risk. They will have to hedge your gold against disaster. Large bullion dealers have to hedge their gold against price fluctuations, they do this through a broker. Brokers make trades on the COMEX which has openly admitted that they use their gold and silver bullion to 100 times more than what they actually have on hand to deliver immediately.

In 2011, one clearing house that handled a lot of brokers trading gold bullion went bankrupt and money that had been in their client’s accounts simply vaporized.  There has been speculation that COMEX will at some point not be able to deliver the precious they promised.  This means that a lot of customers who hold gold paper contracts including gold dealers will be unable to get money from their accounts. Most online buyers operate this way but they aren’t about to tell you how they run their businesses.  When choosing a gold bullion dealer, try to choose someone who is more open and honest.