http://goldsilver.com/article/how-to-sell-your-gold-and-silver/?utm_medium=email&utm_campaign=6+-+07+-+2011+-+GS+-+Weekly+Newsletter&utm_content=6+-+07+-+2011+-+GS+-+Weekly+Newsletter+CID_99a9a4e8dd7fc03dad6e7b66a8815894&utm_source=Webmail+MarketingHow to Sell Your Gold and SilverWealthCycles.com
JUNE 07, 2011
We at WealthCycles believe the global economy is in the precious metals cycle
right now. Eventually, the cycle will peak and decline. When that happens, it
will be time to sell your gold and silver and transition into the next asset
class. “But what then?” many of our investors and readers ask. How do I go about
selling my Gold and Silver, especially during a time when they are worth a lot
In this article we describe the main criteria you should consider in selling
your precious metals, as well as pros and cons in selling to different types of
buyers. While we have done our best to cover all the relevant information, we
may have neglected to answer the question that is most on your mind. If you have
additional questions or thoughts, please post them in the comment section
WealthCycles’ sister company,
GoldSilver.com, is an online dealership of gold and silver. In this article, we
have endeavored be as objective as possible in this regard.
Please note, this article addresses sales of bullion gold and silver. If you
need information on sales of numismatics (collectible coins), it is important
that you consult numerous experts in numismatics. Numismatics are a separate
industry unto themselves. Please, please, please consult more than one expert in
numismatics before you attempt to sell them. Do not attempt
seal, or do anything else to alter numismatic coins before consulting experts,
as this can seriously degrade the value of your coins.
We have broken down the criteria to consider when selling gold or silver
bullion into four subcategories: Security, Privacy, Speed, and Price.Security
– The security of the sales transaction is
important to any precious metals investor. If you have a large amount of gold
(over 10 ounces) or silver (more than 500 or 1,000 ounces) security is
Precious metals investors should consider incidents such as the one that
occurred in Chilliwack, British Columbia, as cautionary tales. Basically, two
thugs invade an individual’s home and steal $750,000 in silver bullion. It is a
tragic story but one from which we can learn valuable lessons. (Click
here for the article
– Just as important, if not more so, than
security is privacy. After all, the Chiliwack robbery might not have occurred if
the thugs had not known this individual had gold and silver to begin with.
Buying gold and/or silver is one of the most private things you can do in
society today. Any stock, bond, or real estate trade is recorded, with the
records easily accessible.
Gold and silver can be bought in cash from a local dealership, leaving
virtually no record of your purchase. Gold and silver can also be purchased
online so that not even the seller sees your face.
Many precious metals investors have a strong interest in preserving their
privacy. Some forms of gold and silver sales and some quantities sold do trigger
a 1099B reporting requirement to the IRS. This simply means the dealership has
to send a form to the IRS stating you sold gold and/or silver to them. You can
find more information on 1099B
– For many investors, one of the main
motivations for buying gold and silver is fear of inflation or hyperinflation.
So the speed at which you can (1) sell your precious metals, (2) receive payment
in currency and (3) move that currency into another asset is vitally
– Who doesn’t want to get the best price for
what they’re selling? Price should always be considered in any transaction.A note on price – since precious metals are commodities
their price over spot does not change dramatically. A typical variable between
dealers is 2% to 7%.
Additionally there are generally two types of venues where you can sell your
gold and/or silver—your local bullion store and online dealers.Local Bullion Store
Your local bullion store is probably the first and most obvious place you
could turn to sell your precious metals. The process is simple enough: Load the
gold and silver into the car, and drive down to the store. Make the trade, and
walk off with your profits.
The one major variable you need to take into consideration is your location.
The main question is, do you live in, or near, a big city?
Your answer to this question is important because big cities, in most cases,
have many more gold and silver bullion dealerships than less populated areas.
Being located in a big city expands your options for all the above categories
when selling your gold and silver.
If you do not live in or near a major city, you will most likely encounter
more difficulties when trying to sell your precious metals locally.
For this reason we have broken down our ratings on selling your gold and
silver to a local bullion store into two different categories: (1) Big City and
(2) Smaller City.Online Precious Metals Companies
Selling your gold and silver to an online dealership is a bit more complex
than selling to a brick-and-mortar bullion store, but it has other advantages.
In order to sell our gold and silver only, there are two basic options. If your
precious metals are stored in your home, you will have to ship them to the
dealership. Shipping your metals can be daunting, but it can be done. If your
precious metals are stored in a storage facility, especially one that works
closely with a bullion dealership, the process is far easier.
As with any type of Internet commerce, the seller of precious metals must be
careful whom he or she does business with—especially if you will be shipping
physical gold and silver to the buyer. It is essential that you know and trust
the dealer with whom you are doing business. Do your due diligence and approach
online dealers as objectively as you can (see our section on due diligence at
the end of this article).
Overall, here are our ratings for the different methods of selling precious
metals. But keep in mind that your particular situation may be slightly
Local - Big City – 3.5/5
Local - Small City – 3.5/5
Online – No Storage – 4/5
Online – Storage – 5/5Local Bullion Store-
We already hear the argument now. “Why did you give security a 3.5 out of 5
for a bullion store? Have you seen how secure those stores are?” The answer is,
yes, we have. We have seen many of them. And we agree that, in most cases, the stores
are very secure.
However, the security of the store itself is not the issue. The issue is your
security. How secure are you
when you are transporting your
gold and silver to the local bullion store? This is of particular concern if you
are selling large quantities of metals.
Try to think like a thief. A gold and silver dealership has cameras to record
transactions, double doors, and, most likely, armed employees. A much easier
target for the thief would be the dumb rich guy who is lugging his big green
monster box of silver into the store. It would be much easier and less risky to
rob you than it would be to rob the store. Think about whether thugs might be
stalking local bullion stores looking for big spending targets.
In terms of security, we don’t believe there is much of a difference between
a big city and small city. Thus the ratings are the same.Online Dealership–
In our opinion, dealing online is better in terms of security.
We gave a lower security rating to sellers with “no storage,” because you
will have to package up your metals and send them off, introducing a small
chance that they could be lost in the mail. Also, storing larger amounts of
precious metals in your house introduces a degree of risk.
If you do have to ship your precious metals, GoldSilver.com has found great
success using USPS registered mail. 99.99% of all packages shipped were
delivered safely and securely. You can also buy insurance on the packages to
cover the value of the metals (click here for USPS
Registered Mail Insurance details
But storing your metals in a secured vault storage facility is by far the
most secure option. Your metals are guarded 24-7 by armed guards. And even if
they were successfully robbed, a reputable storage facility will have insurance
to cover your losses in case of theft. (Be sure to check with your bullion
company to confirm your storage facility has insurance against theft and other
Local - Big City – 4/5
Local - Small City – 3/5
Online – No Storage – 4/5
Online – Storage – 5/5Local Bullion Store-
If you live in a big city, privacy when selling your precious metals is
fairly good, although not perfect. By splitting up your bullion and selling
between a number of different stores, you can create the appearance of having
only a small volume of metals—for example, by selling $5,000 at one store,
$7,000 at another, and maybe $9,000 at another.
However, you do have to show up at every one of these stores in order to make
your sales, so your privacy would not be complete.
Another issue to note is, if you take the cash you receive from selling your
metals and try to deposit $10,000 of it into your bank account, you will most
likely trigger some required reporting, as well as some general suspicion. Think
about how relatively few people deposit over $10,000 dollars in cash at one
time, and you’ll understand how your doing so might draw some attention.
We rated a bullion store located in a smaller city slightly lower in privacy
because there is chance information would get around more easily in a smaller
town. That is, the smaller the city, the more likely it is that people will know
one another. Of course, the element of privacy will vary from city to city, and
you should take your knowledge about your particular city into
Selling your precious metals online is more private than selling them at a
local brick-and-mortar bullion store. How much privacy you achieve by selling
online depends on whether you have to ship your metals to the dealership or
whether your metals are stored in secure vault storage.
If you do have to ship your metals from your home or office to the online
dealership, the loss of privacy comes from the fact you have to drag one or more
heavy packages to the U.S. Post Office or other shipper, then deal with USPS or
shipping service staff.
One concern we hear repeatedly is whether, at the peak of the precious metals
bubble, with lots of transactions taking place, the mail or shipping staff would
begin to recognize the signs of a package that contains precious metals. Thus,
shipping your metals to the online dealer results in a slightly lower privacy
Keeping your metals in secure vault storage is the most private method
available when it comes to buying and selling precious metals. If you place an
order with an online dealership, have your metals shipped directly to a vault
storage facility, then sell from vault storage, the only people who would know
about the transaction are you and the precious metals dealership, and the party
who runs the particular vault storage facility (excluding IRS 1099B reporting
unless applicable to the particular transaction).Speed
Local - Big City – 5/5
Local - Small City – 4/5
Online – No Storage – 3.5/5
Online – Storage – 5/5Local Bullion Store–
Living in a big city gives you a huge advantage in the speed at which you are
able to sell your precious metals. An anonymous source who formerly worked for
the FBI’s anti-laundering department has told us it is easy to sell a many
dollars worth of gold and/or silver in Los Angeles within a single day, thanks
to the sheer volume of stores willing to buy gold and silver.
To illustrate our point, we did a Google search on “Los Angeles Gold Coin”
that came up with more than 100 locations.
Unfortunately, many smaller cities do not enjoy this advantage of speed, a
factor that, again, may vary from city to city.Online Dealerships – No Storage
Selling your metals into an online dealership will be the slowest way to sell
your precious metals and can take up to a month for you to receive your
currency. The reasons: (1) the dealership must first receive your metals, which,
depending on your shipping method, may take as long as two weeks. (2) The
dealership then confirms that what you sent matches its records. (3) Then the
dealership makes its book entries and sells the metals. (4) Lastly, the
dealership sends you the check or wire in payment for your metals, which can
take an additional few days. The entire sales process will most likely take
between one and half weeks and or longer.Online Dealership – Storage
The great thing about selling to an online dealership when your metals are
held in secure vault storage is that the transaction is very fast. The online
dealership can confirm via a third party that you possess the amount of metals
you are trying to sell in your storage account. Thus the transaction is simple
and fast, and often a wire payment can be issued the same day or the next day.
Payment by check can be FedEx’ed to you overnight.Price
Local - Big City – 3.5/5
Local - Small City – 3/5
Online – No Storage – 4.5/5
Online – Storage – 5/5Local Bullion Store-
One advantage of living in a big city is that there is a lot of competition
between local bullion stores. Often, you can get a very good price by just
calling around. One of the easiest things to do is gather a list of some local
dealers. Call several and ask them what price they are paying for your form of
metal. Do this with at least three different dealers.
A smaller city will have fewer bullion stores and thus less competition, so
you might not get top price. But keep in mind, your local bullion store still
has to compete with dealers online. So their prices should not be completely out
of line.Online Dealership -
The upside for selling to an online dealer is you will most likely get a
better price than by selling to your local bullion store, mainly due to
economies of scale. Typically, online dealers deal in a national marketplace,
sometimes even international. This allows the online dealership to pay you more
dollars for your ounce of metal.
Keep in mind if you are shipping your metals, you will most likely have to
bear the cost of the shipping and insurance.Other Considerations –
Below are some additional issues you should be aware of.Home Delivery -
Remember the individual who was robbed by those thugs in Canada. If you are
thinking about investing a lot of currency in gold and/or silver you may want to
think twice before having all of it delivered to your home. You may want to take
physical delivery of a portion of your gold and silver holdings, but if you own
more than 1,000 ounces of silver or 25 ounces of gold, you should seriously
consider vault storage.Vault Storage and ETFs –
WealthCycles has published an entire article dedicated to Exchange
and the potential pitfalls of investing in ETFs. If you haven’t read it we hope
In terms of vault storage, many people expect it to be very expensive. Most
are surprised when they find out it is really quite inexpensive. GoldSilver.com
vault storage is in fact cheaper than ETF storage ---> You
can read the analysis here
Before you put your precious metals in storage, make sure to conduct your due
diligence by researching the following:
(1) Who owns the storage facility? – In general, if the dealership from whom
you purchase your metals also owns the storage facility, this creates the
conditions where fraud can occur.
(2) Who owns your precious metals? This may sound like a silly question (as
in, ‘Of course, I
metals’). Just make sure to check. Allocated storage
is a great example of a type of storage where actual
ownership of the metals is a bit tricky and may not present all the options you
think you had.
(3) How quickly/easily can you sell your precious metals from the storage
facility and get your currency? – It’s no use having your metals in a storage
facility if it takes two months to get the currency once you have sold.
(4) What are the parameters or obstacles of taking physical delivery of your
metals from the vault storage facility? Can they be delivered internationally
in case you would like to relocate elsewhere?
For a more in-depth look at storage checking out our article on the subject: How to Store
Your Precious Metals
.Due Diligence – Reputation –
Your reputation is key when dealing online or locally. Make sure the place
where you go to sell your gold and silver has a good reputation as well.
When considering a local bullion store, you might want to check sites like
Yelp, Yahoo, Google Pages, YellowPages.com, or other local review sites.
To research an online dealership, look up its BBB (Better Business Bureau)
rating. Also, before you do business with any dealer, make sure you do at least
some of the following Google searches:
-(Company Name) review
-(Company Name) scam
-(Company Name) experience
When doing these searches, you are looking for genuine reviews of the
companies. Unfortunately, some companies will pay marketers to go out and post
overly positive reviews for their company or to post negative reviews about
their competitors. So you really need to use your discerning eye and pick out
the reviews that seem to be genuine, written from the “person on the street”
perspective. Take all reviews with a grain of salt, of course.BBB Ratings –
When you look at the BBB ratings, don’t just focus on the company’s overall
rating. Although that’s a good place to start, you also need
to look at
the Complaint Closing Statistics. This is the section that shows how many people
brought a problem to the BBB and how it was resolved. Look at the two examples
In both of these examples, each company has an A rating with the BBB.
In example A, we see the company only has two complaints. In response to both
complaints, the company is “Making a full refund, as the customer requested.”
That’s a positive customer response, in addition to the company’s A rating, is a
sign that the company is very reputable.
In the second chart, we see the company has 64 complaints. What’s more, in
nearly half of the complaints, the company is “Agreeing to perform according to
their contract”! Essentially, this indicates the company did not do what it
agreed to do, the customer brought the issue to the BBB, and only then did the
company do what it was supposed to do. That type of response should at least be
an indicator to you that the company might be a bit difficult to work with.
When considering the volume of complaints, also keep in mind how much
business each company does. If business X has 100 customers and 1 complaint,
its complaint percentage is 1%. If business Y has 10,000 customers and 50
complaints, its complaint percentage is 0.5%. In other words, business Y would
be the more reputable company. So make sure to consider size of the company’s
business in terms of looking at the number of complaints.How you will receive the currency –
Of course, if you sell your precious metals at a local bullion store, you
should receive your payment at the time you sell. There should be no
Selling your metals online, however, is a different story. Keep the following
in mind when selling your precious metals online.
(1) Know how much currency you will receive - Never, never send your precious
metals into an online dealer without knowing how much currency you will get in
return. Always have a formal contract for how much you will be getting for your
bullion before you send it in.
(2) Know the process – When you call in to sell your precious metals to an
online dealership, it is good to know the process--if for no other reason than
your own blood pressure levels. Know how many steps it will take to complete the
sale, and about how long each step will take.
(3) Know how you will receive your currency – Is the company going to wire
you the funds or send you a check?
(4) Know how long it will take to receive payment – Know the approximate date
the funds will hit your bank account or when the check will arrive at your
We hope this How-To article has helped to illuminate some of the positives
and potential pitfalls of selling your gold and silver. We invite you to
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