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Want to learn how to buy gold below spot price? We realize that gold is a commodity that can fluctuate wildly on a day-to-day basis.
In fact, I’ve even seen it drop as much as $40 in one day, causing a mass array of headaches for many investors.
When you buy gold coins or bars from licensed dealers, you have to buy it at a little above spot price (currently set at $1,192.42 for one troy ounce of gold). However, when you sell it, you usually have to sell it below spot price.
Investors who put their money in gold spend a little extra and hope that overtime it will eventually rise so they can turn a profit when it’s time to sell.
Investors commonly use gold as a hedge against inflation. If the dollar tanks or the printing of the American dollar ramps out of control, people will pour money into gold as to not lose the value of their money.
The only problem is that the average person doesn’t know when gold will go up or down, as well as most professionals. Furthermore, most people don’t want to given that you have to purchase gold at a few dollars above its value and that it’s more difficult to liquidate than cash.
In this guide, I’m going to show you how to look for common deals on where you can get a gold coin of one troy ounce a lot less than the current spot price.
How Do We Know How Much Gold Coins Are Selling For?
One of the most reliable gold dealers in the United States is a company called APMEX. Located in Oklahoma, this company buys and sells bullion products, such as Royal Canadian Mint Coins and the Silver American Eagle Coin. With an A+ rating from the Better Business Bureau, you can guarantee that you’re getting what you paid for.
By taking a look at their website, we can get a better idea of some of the products that they offer for sale. Here’s a classic Australian 1 oz Gold Kangaroo Bullion, selling for roughly $35.00 dollars over spot price at $1,239.00
If we look at the picture we can also find out the price they are willing to buy it for, currently at $1,204.60. This means that if we were to buy a gold coin from APMEX and resell it to them immediately, we’d be taking a loss of about $35.00.
This is the point where investors look at the price of gold and decide to see if it’s worth the buy depending on the future of gold. If your research tells you that the spot gold price is going to go up at least $35 or more, it might not be a bad idea to buy a few coins.
Even if I believe that the price of gold will eventually go up, I still don’t enjoy the emotional roller coaster that goes down in my stomach from the fear of uncertainty. If gold drops just $1, I’ve lost even more of my money. That’s why we need to buy it at way below spot price.
Where and How Can We Buy Gold At a Discount?
For a real-life example, we’re going to take a look another coin sold by APMEX called the Pamp Suisse 1 oz Fine Gold Bar. Currently, they’re holding a special on Ebay where the coin sells for $1,194, just a few dollars above spot price. Not a bad deal compared to many other dealers.
It is important to look for these specials, as they’re only available for one day. Make sure to check back every once in a while to see if there are any discounts on precious metals.
Yet we can reduce this price even further by using a shopping portal. Shopping portals pay you money when you make purchases through their website. Right now ShopAtHome will give you 2% in cash back on every purchase made through Ebay.
This means we’re bring our price from $1,194 down to $1,170. We can already resell the gold for a profit at this point. Cash back usually is sent out every two months from ShopAtHome.
We can further reduce our cost by using a cash back credit card. There are currently a few credit cards that offer up to 2% cash back, so make sure to look into them before making a purchase on gold.
Adding the two discounts together means we get a total discount of 4%, bringing our actual total down to $1,146, almost a $50 dollar discount from the spot price.
They don’t charge you anything for shipping, so there aren’t any other incurring fees that you have to worry about.
Using a shopping portal and a credit card through great deals on Ebay can save you a lot of money on gold bars. However, I still want to urge a few words of caution before you make your purchase:
- Gold has the power to fluctuate rapidly. I’ve seen it go down as far as $40 dollars in just one day.
- Predicting the markets can be extremely difficult and not even the most expert investors know when the market will suddenly turn.
- If you plan on reselling the gold right away, it is possible for the gold coin to drop much lower while the gold is still shipping to you. APMEX usually gives you their metals a week after purchase.
With that in mind, I bid you all happy investing and good luck on precious metals. Thanks for reading.
My name is Jason Wuerch and I'm currently located in Madrid, Spain running a personal finance blog called Frugal For Less. My goal is to help everyone and anyone willing to make and save money through easy and simple ways that don't require much effort. Just because you're frugal doesn't mean you have to give up life's luxuries.