Investing With A Gold Exchange
Posted by Adam King on February 15, 2010
February 15, 2010 – Investing with a gold exchange can be a better option than some traders think. Reputable exchanges offer reasonable prices, flexibility of products and other options that are not available when purchasing bullion from exclusive US Mint dealers or the national mint from another country.
Some investors choose to purchase gold bullion directly from dealers who are authorized by the US Mint. These people get gold coins of a guaranteed weight and purity as promised by the US government. The problem with this method is that purchasing there comes with a substantial mark up on the price, sometimes 20 to 30 percent or more. At today’s price of $1,100.00 per ounce, the price for a 2010 American Eagle from the US Mint would be $1,328.00. This increase forces the investor to buy less gold or hold it longer in order to make a profit. In addition, the Mint only offers a limited range of products such as gold and silver American Eagles and other pieces.
Gold exchanges offer better options for most investors. Because exchanges buy in huge volume, they receive discounts on bullion products that they can pass on to customers. The same 2010 American Eagle coin that lists for over $1,300 on the US Mint price grid could cost only a couple of dollars over the spot gold price at an exchange; this means that buyers can potentially save hundreds of dollars per ounce by buying through an exchange. The product selection is generally higher here as well, with American bullion products being sold as well as bullion from countries like Canada, Australia, France, Austria and others. Some exchanges also sell gold bars and possibly even certified coins, providing a number of options to their clients.
Gold exchanges also store and sell bullion for their clients, something that the Mint does not do. While exchanges don’t have the strength of the US government to guarantee their products, they frequently use third-party experts to inspect the quality of their products and seek accreditation by the Better Business Bureau or other customer-related organizations. Investing with a gold exchange can offer a great number of benefits to traders and potentially help them to save money, meaning that what they spend on gold is more valuable.
Senior Staff Writer – Certified Gold Exchange
US Gold Market