In this article we’ll tell you what you need to know when trading physical gold, covering the how’s and the why’s, and aiming to make your life easier as a result. Because, as we shall discover, most of the time it is just as easy to sell bullion as it is to buy it.

Trading with Bullion Dealers

Many investors turn their noses up at the prospect of buying physical gold because they think it will be too much of a hassle to sell it down the line. After all, they’ll need to find and negotiate with another investor, or sell through eBay, right? Well, not really. That’s certainly an option, but it’s far from the only one.

There are many investors who turn to pawn shops and scrap gold dealers, but you’re going to lose a large percentage of your margin this way. They have overheads to cover and they need to make a profit, so they won’t give you the best price, or anywhere near it in fact. The best way to offload gold, assuming you don’t have an investor willing to buy it at the top of the market, is to sell it to a bullion site.

You can sell it to the site that you bought it from, or you can sell it to another one. The best bullion sites offer this service, and one of the most popular is JM Bullion. They tend to pay top dollar for bullion, giving you as close as you will get to spot price without selling it to the end customer yourself. If the price of gold stays the same, then you won’t be able to get what you paid for it. They need to sell it on for a profit after all. But you can get spot price or better, and if the price of gold increases even slightly, you should be looking at a profit.

Because of the nature of these sites and their business, it is possible to buy a product from them one day, and then sell it back to them for a profit the next day. This is the beauty of bullion.

To sell to them, simply click on the “Sell to Us” option and follow the procedure. It is much easier to sell something that you bought from them, as you have proof of purchase and they can guarantee that it is genuine because of this. But there aren’t any complicated steps involved with selling bullion bought elsewhere.

Other dealers that buy back bullion include:

  • SD Bullion
  • Apmex
  • ATS Bullion (UK)
  • Bullion by Post (UK)

Trading Software

If you want to forgo the process of receiving your metals, only to package them back up and send them back, then you can simply trade through a company like BullionVault. This is basically a commodity trading exchange, and you buy and sell gold and silver like you buy and sell commodities and indices on the Forex.

BullionVault allows you to buy for spot price, and all trades are backed by real gold bars. There is no need to receive delivery of these, but it adds legitimacy to each and every trade. With BullionVault, you buy at the going rate, offered by another user, and you then hold this in your account. When the price goes up, you can sell and make an immediate profit. It’s as simple as that. You can hold this contract for as long as you want, turning a small and quick profit, or a big and long one.

The immediacy of this will appeal to many investors, but the fact that you won’t see or touch the precious metals you buy, is a big negative for many investors. There are also no premium coins or bars, and you’re dealing purely in the raw material. This means that your profit is entirely dependent on the value of this raw material, and you are unable to speculate on rare or collectible pieces, which so many collectors enjoy doing.

Conclusion on Trading Physical Gold

Many investors like to own a mixture of “real” precious metals and “virtual” ones, giving them the best of both worlds. This is certainly advisable in the beginning, and it’s good to have a portfolio that combines a percentage of each of these. However, as you learn more and invest more, you will probably find yourself leaning more towards one option more than the other. It all depends on circumstance and preference.