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Just a quick question, the companies that buy scrap gold pay widely from 50% below spot price to as little as 5% below spot. If i was to refine my own gold I would be lucky to sell it for more than 20% less than spot price. So what do these firms do with the gold?

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Just a quick question, the companies that buy scrap gold pay widely from 50% below spot price to as little as 5% below spot. If i was to refine my own gold I would be lucky to sell it for more than 20% less than spot price. So what do these firms do with the gold?

Who pays just 5% below spot?

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Yes Hatton Garden Metals do so how do they make any profit unless they refine and hallmark themselves. Ok the ones who pay very low I can see how they pay. But what about the ones who try and pay a decent price who do they sell the gold to?

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This is a guess, but if I were them, I would offer a good (spot - 5%) price. I would then see if I got sufficient throughput which would then justify sending it in bulk to a Swiss refinery (unless that nice Mr Baird had a good deal for refining it for me) and then sell it to the Far East or India, where the highest mark-ups are. Alternatively, but much less likely, I would do my trading in new bullion and keep the refined stock for the future, when the shortage of bullion will provide an adequate profit margin.

Anyone got better ideas?

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They must do something with it, I think there is too much cash tied up to just let it sit. Its all too easy to condem these firms but they really must have a hard time moving on the gold.

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I know what they do with the coins, though. I asked the girl behind the counter if she was willing to sell me any Sovereigns if they had them. She said "Oh, no; all the coins go to Head Office".

Yes, I bet they do. What better way to accumulate Sovereigns than to buy them at 50% less than market price.

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Just a quick question, the companies that buy scrap gold pay widely from 50% below spot price to as little as 5% below spot. If i was to refine my own gold I would be lucky to sell it for more than 20% less than spot price. So what do these firms do with the gold?

50% below spot price... who is that then ;)

I think they melt it down into bars and sell it on.

Either very quickly to make a small margin (so volume is needed), or, hold on to it and risk movements in the price.

Because the price can shift quite sharply, this could be a disastrous approach if it shifts to the downside in that manner.

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They don't melt it - if they've got any sense.

They pick the bits over for anything good, like antique Silver or Gold coins or anything numismatic, the rest is simply sold on to big dealers/refiners who offer tighter spreads, and they make a hefty turn on that. If they don't need to sell it immediately and believe the price is going sharply upwards soon, they hold it as part of their stock for the day when it makes enough to be worth selling.

You can melt it and have it re-hallmarked, but there's no need. It is already hallmarked. Big dealers will melt the lot, re-assay it and then pay on the carat quality of the ingot.

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50% below spot price... who is that then ;)

yeah,let me know,I'll turn up and offer the vendor 30% below spot!!

still seems like a bargain as long as its hard currency and not bling!

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