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I posted this information before, but in response to Bob Edwards
letter dated May 4th, i thought i would reiterate.
I thouroughly recommend the the following company for purchasing
gold and refining your scrap.
Kahan Jewelry Corp.
36 West 47th Street, Suite 308
New York, New York 10036
(212)719-1055
fax (212)719-1055
For purchasing fine gold the have two rates: for puchases of 1 kilo
(32.15 fto's) the price is $1.50 / oz over the 2nd London PM Fix -
for purchases under 1 kilo (ie. 5oz, 10oz, 15oz) they charge
$5.00/oz over 2nd London PM Fix - This is much less than Bob's
reported 2% ($6.22 at todays price) and a MAJOR point in Bob's
comparison is his use of spot price.
if you a buying gold on spot than you are most likely pay a large
premium over that suppliers price - WHY? - Because nearly everyone
somewhat large in the gold selling business is hedging their
position - meaning they do not own there gold per se. They buy or
sell enough gold each day to return their position to even -
therefore they don't take the risk of gold jumping up over dropping
the next day and taking a big loss.
they buy their gold on the 2nd London PM Fix - this is the
international standard for pricing gold - the price comes out here
in USA around 10-10:15 am. All sales between banks are done at this
price. The SPOT price is (assumingly) the current (at that instant)
buy or sell price at a particular trading venue (New York
Commodities Exchange). Generally, the SPOT price will be higher
during the day than the 2nd London Fix was. But more important is
the fact that you have no way of verifying if the spot price is
lower or higher. All Major quote services are time delayed by 20 min
or more - if you want even halfway "REALTIME" quotes it will cost
hundreds a month.
and in response to the particular dealer BOB mentioned selling
Krugers for $2 over gold - first i will say not a bad price,
something you can get on the street fairly common. But i have a few
.... ... 'problems' with this bit. First, it is ridiculous to
believe someone saying "i've made enough money, you make the rest".
As i said before, anyone who is a somewhat large dealer is hedging
their position daily so they alreading locked in any profit the day
they aquired the Krugers (ie. they paid less to the person selling
the krugers to them than they were selling their gold for that day).
2nd - i could never deal with someone with a variable (moving)
mark-up. i need to know my cost so that i can add my value to the
product (ie labor), add my markup and know i'll make a profit. i
can't be spending all my time finding a deal for my raw components,
thats not the career i chose. not to say that if an attractive
situation arises i don't spend a few minutes making it work. But i
need consistancy. i can't spend my time trying to calculate todays
casting alloy formula because today i bought Eagles instead of
Kruger's.
i don't mean to necessarily dissuade anyone from doing what they
need to survive - if buying coins works for you, more power to you.
Just be sure to be honest while you try to determine the true cost
of each choice.
Lastly, not that i think it is a major problem generally but i will
metion it here because it is appropriate. Be carfull when buying
coins if you are not expert and don't trust you dealer implicietly.
It is possible and i have come across counterfiet gold coins - the
where Krugers and the alloy was a perfect match - only problem was
the gold content was about 21.5 kt - So be carefull - just another
reason i prefer seal, comex-acceptable kilo grain bag. of course
even then you need to make sure the bag hasn't been tampered with
-but its not a perfect world after all.
Andrew Goodell
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