How to buy and sell gold and avoid the spread

Written by Andrew Henderson

Dateline: Singapore

In the internet age, buying gold is easy. Especially if you live in the United States, United Kingdom, or many European countries, gold dealers not only sell and ship directly, but gold shops are also quite common.

However, just as every business and investment should have an exit strategy, the question you should be asking yourself before you buy gold is “how do I sell gold?”

Now, I understand the idea that one day — some day — people will value how many ounces of gold they have over what the fiat currency value of that gold is. Gold in and of itself has been a form of money for thousands of years, and it is only recently that people, like those in the media, have caused a shift to thinking of everything in declining dollar terms.

There is no doubt it is important to be prepared.

That said, investing in gold is inherently pragmatic for those that understand how money really works. That pragmatism means there may come a time when you want to sell your gold or silver to invest in another asset class, like foreign real estate or an investment that qualifies you for second citizenship.

For me, one of the biggest concerns when buying gold is getting a good price. With any liquid investment, a good price is obtained by minimizing the spread between buying and selling prices.

On the buy side, that means the amount a dealer charges over the spot price. On the sell side, that means the amount a dealer will pay you under spot (or, if you’re lucky, a lower price that is at or above spot).

In a moment, I’m going to share a first-of-its-kind way to eliminate that price spread.

The best type of gold bullion to buy

When Peter Schiff spoke at my first Passport to Freedom conference, he and I discussed that we both believe buying standardized gold bullion coins from national mints is the best way to invest in gold.

That means Canadian Maple Leafs, Austrian Philharmonics and, if you insist, American Eagles.

Gold and silver “rounds” with skulls or bayonets on them, treasure from ancient shipwrecks, as well as nostalgic “pre-1933” gold coins are all extremely overpriced ways to buy gold. They are also far less liquid.

Buying some speciality round from a designer means you’ll pay a higher spread for the pleasure of looking at a skull on the back of your gold coins. Likewise, if you’re planning to internationalize your gold at some point, no gold dealer in Hong Kong or Singapore will want some piece of gold with a skull.

Similarly, I recommend avoiding special edition mint coins, like the Canadian wood buffalo or moose coins. You’re paying an extra premium over the price of the metal that may not be able to be recovered if the dealer you want to sell to doesn’t care about the limited edition.

Why is there a spread on precious metals?

My friends in Singapore explain it this way…

Precious metals and bullion products in physical form often have a higher price than the spot-price. The spot-price is the price for which someone can buy certificates or futures on the commodity exchange. It is, however, mathematically impossible — based on the paper market volume traded, for these so called paper metal products — to be fully backed by physical precious metals.

Gold and silver in bullion form is often minted into 1 oz coins or small bars ranging from 1 oz to 10 oz. It is an advanced process to melt, mint and certify bullion products with high quality and precision. Everything from design work to manually engraving stamps has to be calculated in the cost. It is therefore normal that a 1 oz coin costs more than 1 oz of the actual metal.

Since the spot price for gold is multiple times higher than that of silver, it is also normal that the premium for a 1 oz silver coin amounts to a larger proportion of the price percentage-wise compared to a 1 oz gold coin. The natural premium doesn’t change much over time and matches the cost of the minting process.

How to buy gold and silver with low to no spread

I’ve been sharing several of the best ways to buy gold and silver with minimal markup in my premium Offshore Boot Camp.

Interestingly enough, one inadvisable way to minimize your buy/sell costs is to buy your precious metals from online dealers in the United States. As with many things, competition in the US is ferocious (one of the reasons I suggest starting a business overseas), and margins on the basic bullion coins are some of the lowest on earth.

The problem comes when you want to get that gold, or especially silver, out of the Land of the Free. If you can get it out at all in the future, it will be expensive… or dangerous… or both.

For offshore gold solutions, I have long recommended BullionStar in Singapore for those getting started with less than six figures. Even if you have a six or even seven-figure war chest with which to buy gold, they are a great company.

To begin with, BullionStar stores all of your gold or silver for free for at least two years. That’s not some “introductory special” or reward for high-rollers. Anyone who buys so much as one ounce of silver can have it stored in one of the world’s safest vaults at no charge.

There are times when paying a little bit for offshore gold storage is worth it, especially when you get into large balances. But if you’re just getting started, the ability to buy one single coin and not have to worry about storage fees is a game changer.

On top of that, storage with BullionStar is both allocated and segregated. For many foreigners, it is a non-reportable way to legally own gold and not tell the tax-man.

That’s why I’ve been recommending BullionStar for two years, long before they offered to give me a free Subway sandwich for referring new customers to them.

However, free gold storage is just one of the ways Bullionstar is innovating in the market. Last year, they started offering to pay employees in gold.

And they’re also the first company I’m aware of that has a gold bar that anyone can buy with literally no spread. The buy price is exactly the same as the sell price.

That means that you could buy their 100-gram gold bar today and sell it back to them tomorrow for exactly what you paid for it. Zero transaction costs.

Of course, the price of gold will effect the buy and sell price, so if the spot price of gold goes up in that one day, you’ll make money. If it goes down, you’ll lose.

Only one type of gold qualifies for this offer, and that’s BullionStar’s own private minted 100-gram (3.5-ounce) gold bars. The bars are minted by Swiss company Argor-Heraeus and, so long as you buy ten of them, there is zero spread; otherwise the spread is a tiny 0.6% or about $6/ounce.

The beauty of BullionStar’s zero-spread gold bars is that it completely eliminates the need to earn a certain gain before you see a return. In any other investment, from gold to mutual funds to private placements, you pay fees that you can NEVER get back.

I have talked to people who actually bought gold at “X” and sold it back to the dealer at “X + 10%”… and lost money, all because the dealer charged such ridiculous fees.

What if I don’t want to store my gold offshore?

BullionStar, like any good gold and silver dealer, allows you to retrieve any gold and silver you hold in their vault, with the exception of unallocated silver and gold grams which trade at low spreads.

Any bullion coins or bars can be picked up by walking into their retail store and asking for your stuff out of the vault.

Of course, you wouldn’t be able to avail yourself of their zero-spread buy-back policy with your gold bars in your possession, but if for some reason Singapore decides to become communist tomorrow, you could retrieve your stuff.

We’ve discussed many times why I believe offshore gold storage is an important part of protecting your assets. After all, buying gold is part of any good asset protection strategy.

To learn more about BullionStar’s zero-spread gold bars, and to compare their premium on your favorite gold or silver coins, you can learn more here.

Andrew Henderson
Last updated: Mar 31, 2020 at 6:41PM

Start Your Offshore Journey Today

The Nomad Capitalist team has helped hundreds of people create and execute prolific offshore plans to help them legally reduce their taxes, become dual citizens, and live the Nomad Capitalist lifestyle of success

Start Your Offshore Journey Today

The Nomad Capitalist team has helped hundreds of people create and execute prolific offshore plans to help them legally reduce their taxes, become dual citizens, and live the Nomad Capitalist lifestyle of successWould you like to be next?

Get Our Latest Offshore Strategies

Join our email list and we’ll send our best articles, videos and exclusive content right to your inbox. 

Its Free.

Read this next..

11 Comments

  1. pabo

    “I have literally talked to people…”

    As opposed to metaphorically talking to people?

    Reply
  2. SmallGovernment

    Be wary of anything with a lockin. You should always have options when it comes to where to sell.

    Reply
  3. Ruthanne Grebin

    Really appreciate you sharing this blog article.Thanks Again. Great.

    Reply
    • Irina Loncar

      Thank you Ruthanne 🙂

      Reply
  4. Christina

    What if I bought silver/gold elsewhere can I sell to them with little spread also?

    Reply
    • Andrew William Mutyaba

      Am looking for a client who can buy Gold bars from Africa

      Reply
      • Sie sus

        Hi,
        I’m looking gold bar each 1kg total 15 kg,price good with hallmark pamps .
        Direct owner prefer.
        Thank you,
        Regards.
        Sie sus

        Reply
  5. Matt

    Rounds are often significantly cheaper than official “coins”. Unless you’re buying the speciality collectors rounds. You can get 1 oz rounds from RMC or ITB for like 70 cents over spot or less….you should probably do more research before you tell your readers to waste money on fancy offical government minted coins.

    Reply
  6. Robert Pattinson

    I would never trust anyone anywhere to hold gold or anything else of value that I’ve paid for with hard earned money.
    A fool and his money are soon parted.
    In a crisis go to the vault in Singapore if you still can, and ask for your gold. If the vault is still there?
    It has happened in Germany. An investor paid for real gold then later tried to take delivery of 500 kilograms of gold and the bank did not have it.
    He is still waiting on a Court to decide the outcome 2 years later.
    Nothing is “free.”
    Only a fool would entrust his paid for gold to a third party.
    Physical ownership is the only real guarantee.
    But hey fools. What do I care?
    Go ahead. Give your money to a vault. Here today, maybe. Gone tommorow, for sure.

    Reply
  7. Georges

    Are you interested in buying gold in large quantities fromCamero
    on?

    Reply
  8. Regen

    I have gold to sell presently deposited in a bank in Hongkong? Any takers?

    Reply

Submit a Comment

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.