Why would someone offer 6% over spot for gold?

Deft Tones · Dec 4, 2016

Expecting hyper-inflation?

I don't understand. I had a Cuban man with a very thick accent and his family stop and ask me a few questions as I was loading up my gear after a park hunt this past summer. One of his last questions was do I ever find gold?

I do.

He flips me a business card with his name and number and says, "You call me first, you sell. I pay you 6% over spot."

I was like, OK! And he sped off.

So I sold a few items to him a month later. He was true to his word.

Now what I don't understand - what's his angle? :dontknow:

It's been nagging me ever since.

Jason in Enid · Dec 4, 2016

wierd. Maybe hes got some con-game going and he needs real gold that cant be traced back to him purchasing it? Dunno, just a guess.

crj1968 · Dec 4, 2016

Why not just ask him?

smokeythecat · Dec 4, 2016

Natural gold, especially in nugget form, always commands more than spot price.

Deft Tones · Dec 4, 2016

crj1968 said:
Why not just ask him?

1. Business is business. I don't ask to many questions. The less I know the better.

2. I can barely understand him. His 7 or 8 yr old kid had to help translate a few things. The wife never spoke.

kcm · Dec 4, 2016

1) What kind of business is he in?
2) What kind of car was he driving?

It's also possible that he makes jewelry that contains the natural gold, and can therefore afford to pay a premium. Have a friend over on GPEX whose wife makes jewelry by fusing natural gold between two layers of glass. It's pretty impressive!

But I think it's a bit too soon to be planning for hyper-inflation in this manner. ......It IS too soon.....isn't it?!?!?

boogeyman · Dec 4, 2016

If he's got good contacts in Cuba, he might just be able to flip the gold he paid +6% for high enough to make a good profit. Look at simple things there. Crankshaft bearings used $60 plus each! That would be my guess.

Deft Tones · Dec 4, 2016

smokeythecat said:
Natural gold, especially in nugget form, always commands more than spot price.

These were refined gold. 14k and a few 18k jewelry pieces. I haven't been itching to sell, just was like, OK, sucker! Guy was thrilled!

Am I the sucker? Am I missing something?

Deft Tones · Dec 4, 2016

kcm said:
1) What kind of business is he in?
2) What kind of car was he driving?

It's also possible that he makes jewelry that contains the natural gold, and can therefore afford to pay a premium. Have a friend over on GPEX whose wife makes jewelry by fusing natural gold between two layers of glass. It's pretty impressive!

But I think it's a bit too soon to be planning for hyper-inflation in this manner. ......It IS too soon.....isn't it?!?!? View attachment 1388005

His business card was a bit odd. Name and number only. Strange but not extremely uncommon in my experience. Like a personal contact card.

It was a nice current model Lexus sedan. He had some thick gold chains on his neck and wrists that I remember thinking too bad he didn't lose those items in the park. He seems like a nice enough family man, but who knows?

We closed the deal at the local cafe. I think when he first approached me in the lot he was coming from the neighboring church with his family. They were dressed nice and that was my impression from the direction they drove.

kcm · Dec 4, 2016

Were they in decent enough shape to restore? Maybe he restores found jewelry to resell at a higher cost.

Wow, that IS a strange situation. But, as it is now, you know of nothing wrong, illegal or immoral, so I'd say go for it. ...Maybe the guy is a prepper and buying up any and all PM's he can. :dontknow:

Deft Tones · Dec 4, 2016

kcm said:
Were they in decent enough shape to restore? Maybe he restores found jewelry to resell at a higher cost.

Wow, that IS a strange situation. But, as it is now, you know of nothing wrong, illegal or immoral, so I'd say go for it. ...Maybe the guy is a prepper and buying up any and all PM's he can.

Yeah they were 2 nice 18k chains(one with a damaged clasp and another with a broken link) 1 normal wear 14k plain band womans ring. Nothing too fancy.

I can't figure a criminal angle. So restoration is something I hadn't considered....maybe. :thumb_up:

Jason in Enid · Dec 4, 2016

Deft Tones said:
Yeah they were 2 nice 18k chains(one with a damaged clasp and another with a broken link) 1 normal wear 14k plain band womans ring. Nothing too fancy.

I can't figure a criminal angle. So restoration is something I hadn't considered....maybe.

That's a good point. Jewelry sells for a lot above the spot value, so he could be repairing and flipping these for an easy profit.

Honest Samuel · Dec 4, 2016

Make sure that the money is real. Good hunting and good luck.

ARC · Dec 4, 2016

He can repair clean and double his money... and still be selling at a fraction of retail.
elsewhere... where he is from.

Think about it...
To buy finished jewelry from a jewelry manufacturer is far more expensive to purchase...
for him to buy that same jewelry from elsewhere would cost him more than "scrap".

Manufacturers of jewelry never deal / sell the products they make for "spot"... or even near that... ever.
They have more than spot invested by far.

ARC · Dec 4, 2016

I might also add...
In case many of you do not know... a silver ring for example...

1 dollar worth of scrap silver... $8 - 10 dollars at any market.

Gold is harder to sell for steeper prices... but if you have the clientele IE: a shop... etc.

NEVER scrap jewelry unless it is lame. IE : Broken... One earing... Dated... etc.
But...

We all have done it I am sure... I have as well many many times.

ECS · Dec 4, 2016

AARC said:
I might also add...
In case many of you do not know...

What is the going rate on bezoar stones?

ARC · Dec 4, 2016

ECS said:
What is the going rate on bezoar stones?

Why ? did you pass one ? :P

JoeDirty · Dec 4, 2016

We had a guy in town a few years back buying and selling coins gold silver and stuff, I bought some from him but he was a rip off artist. He would miscount a lot and other things but always told people he paid more. If you buy a 1 oz. gold piece you would generally pay $100 over spot. That is the average so do the math. Always weigh your jewelry and go to an online calculator to figure the actual gold weight and price. This will give you a ball park figure on the value. I like to sell stuff on Ebay. I do well their.

kcm · Dec 4, 2016

I've often seen these big ads for "We Buy Your Unwanted Jewelry". I normally just assume it's because they are melting it down and purifying it. But that really is an idea - why melt a piece of jewelry where there is nothing wrong with it, other than needing a good cleaning? Maybe an old or rare piece? Or maybe a simple broken-clasp fix??

As I've said, I've never been a jewelry guy. But it has always struck me as a little strange how so many of these places have popped up over the years. I don't know what they typically pay, but I would guess it can range from just below to just above spot at most of them. Problem is, trying to figure out which places are good to their customer-suppliers and which places aren't.

Jason in Enid · Dec 4, 2016

kcm said:
I've often seen these big ads for "We Buy Your Unwanted Jewelry". I normally just assume it's because they are melting it down and purifying it. But that really is an idea - why melt a piece of jewelry where there is nothing wrong with it, other than needing a good cleaning? Maybe an old or rare piece? Or maybe a simple broken-clasp fix??

As I've said, I've never been a jewelry guy. But it has always struck me as a little strange how so many of these places have popped up over the years. I don't know what they typically pay, but I would guess it can range from just below to just above spot at most of them. Problem is, trying to figure out which places are good to their customer-suppliers and which places aren't.

None of those places buy for spot, they are rip-off artists on par with pawn shops.