How Does A Gold Dealer Make Money When The Price Drops?

Welcome back to another episode in our back to basics series! Where Michael covers some of the important things you need to know if you're just starting out stacking, or even need a refresher if you're a bit more of a seasoned one! This video Michael talks about hedging, and how it can help a bullion dealer stay in business even when the price is fluctuating!

Need to buy gold or silver in Melbourne, Australia? Come see Bullion Now for all your gold and silver bar and coin needs, now located right in the heart of the city! Need something a bit more special? Little Coin Shop has you covered with the best collection of collector's items!

And if you need to sell gold, silver or other precious metals... we pay 100% of spot price. To our knowledge, that's the best in the business.

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[Knackers_Oreilly]

The bottom line is BN or any other exchange/dealers have to move a lot of stock at that small margin profit line just to cover wages, insurance, rent, super etc and something for the owner.
Its a tough gig to be in and to remain in business and expand.
Thanks Michael and the team.👍

[chinsoo]

You answered my question. That's smart. Thank you, Michael.

[Canberrastacker]

Does this mean that you get no breaks over any holidays 🤣

During Christmas lunch... Oh no looks like I gotta order 20oz of gold as someone has just bought some

[taniasmith]

This was clearly taped before Friday live 😊
Thanks for your insight

[UKDark_Mark]

Thanks for the info Michael. I wasn’t quite sure how it worked until now. Clear concise explanation - cheers! 👍

[nickl]

I hv only ever bought from Perth Mint and Bullion Now

[VegasStacker]

Very interesting topic. Thank you for the inside look into the coin business.

[stephenbeyer]

How often do you make orders to maintain your neutral position? Once a day? Every few hours? And when you make orders of special coins (such as a series), do you have the order ready to go, and then hit the 'send' button when you're starting to get a short position? I've often wondered how you go about it in a practical sense

[TheGilbalfas]

I love Bullion Now. I miss these videos. Thanku for helping the gold bug in me feel good about stacking.

[GonzoJamie]

Articulate in your explanation and perfectly understood. Thanks for that

[MasterWatchmaker]

The assumption here is that 1) you have enough buying and selling activity which is probably only a case for well established trader 2) and buying and selling volume is closely matched. But does that really happen in reality? When the price is going up you naturally want to sit on gold, and when price is dropping, it would be more beneficial to sit on cash? Thanks for sharing, educational video for sure. It takes guts to deal in commodity where price fluctuates widely, and you have zero control of spot price.

[JohnFrazer-jboi]

Thanks for the information, good subject matter. Cheers.

[CuSTACKS]

If you sell 1oz pamp suisse bar do you go ahead buy that exact same bar that same day or can you buy another 1oz gold brand or coin or another type of Bullion product?

[aaronfrazer]

Hi good question I have been asking myself

[wombat]

You have to buy at the same rate that you sell, is what you are saying?

[AgSmithsilversmith]

I understand your reluctance to mention your holding as a hedge, but I was wondering do you try and increase your position year on year?

[davidhamtaro]

Another term, Dollar cost average for dealers? 😊

[Seven-Seven-]

I’m purely focused on what price I will be paying on the day, never thought or considered the business practices of the seller.

[lauriewilliams]

How Does A Gold Dealer Make Money When The Price Drops?'
He probably spends his time making YOUTUBE VIDEOS, LOL".

[rayne]

What if the price keeps going down, how do dealers keep buy and sell at the same price?