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View Full Version : What's up with Kitco gold buyback prices - all below spot?



neophite
04-26-2017, 01:44 PM
I noticed this trend for a while - they were dropping buyback prices

Fair enough - it's a free market, traders can do whatever they want

However, it reached the ridiculous proportion at our esteemed host: now ALL 1 Oz coins, not just bullion are below spot, that includes AGE, Buffalo, ML

There got to be an explanation - otherwise it means Kitco had stopped buying from public as other major vendors now have much higher prices

Guide
04-26-2017, 02:25 PM
However, it reached the ridiculous proportion at our esteemed host: now ALL 1 Oz coins, not just bullion are below spot, that includes AGE, Buffalo, ML

There got to be an explanation - otherwise it means Kitco had stopped buying from public as other major vendors now have much higher prices

I bet they buy from the public and sell to elemetal (ntr metals). elemetal just told dealers that for a few weeks they will pay dealers below spot, they do not care what it is, everything goes to the scrapper. Something about being forced to do an inventory of all the metal they have so they cannot buy any.

AnotherDave
04-26-2017, 02:34 PM
I noticed this trend for a while - they were dropping buyback prices

Fair enough - it's a free market, traders can do whatever they want

However, it reached the ridiculous proportion at our esteemed host: now ALL 1 Oz coins, not just bullion are below spot, that includes AGE, Buffalo, ML

There got to be an explanation - otherwise it means Kitco had stopped buying from public as other major vendors now have much higher prices

Hmmm. Maybe they think they will get more fiat that way.

Customer Care
04-27-2017, 02:28 PM
The answer is much less convoluted than one would think. Gold's uptrend throughout the year so far has caused quite a bit of selling/profit taking to take place at the retail level. Since Kitco's buyback prices are normally among the highest in the market, a significant proportion of this selling was directed our way, causing a surge in inventory. Temporarily lowering our bids across the board is the fastest and surest way to ensure the influx of bullion slows down. Rest assured, once this passes, our buyback pricing will return to normal.

motocat
04-27-2017, 03:47 PM
I noticed this trend for a while - they were dropping buyback prices

Fair enough - it's a free market, traders can do whatever they want

However, it reached the ridiculous proportion at our esteemed host: now ALL 1 Oz coins, not just bullion are below spot, that includes AGE, Buffalo, ML

There got to be an explanation - otherwise it means Kitco had stopped buying from public as other major vendors now have much higher prices

Yes, they are not that good. Maybe they have to much bullion* -- and need more fiat digits? My LCS -- will buy the 1 oz plat American Eagle back for some 20 USD units more -- and that's in cash, discreetly. Good thing we have choices. (I've found Kitco is better when it comes to buying and their pools -- never sold to them for this reason, did not notice what customer care mentioned above, but could be wrong).

*Edit -- reading the post above again, that seems to be the case

blitzdude
04-27-2017, 07:04 PM
The answer is much less convoluted than one would think. Gold's uptrend throughout the year so far has caused quite a bit of selling/profit taking to take place at the retail level. Since Kitco's buyback prices are normally among the highest in the market, a significant proportion of this selling was directed our way, causing a surge in inventory. Temporarily lowering our bids across the board is the fastest and surest way to ensure the influx of bullion slows down. Rest assured, once this passes, our buyback pricing will return to normal.

Wouldn't a "surge" in inventory translate into lower premiums on the retail side to correct this imbalance?

Customer Care
04-28-2017, 11:02 AM
Please take this from a purely theoretical standpoint, since you can imagine our internal operating procedures aren't free to share, but logically, lowering premiums wouldn't make sense unless sales were abnormally low. Sales have remained stable, and the market as a whole does not show lack of demand. It is much more cost effective to reduce inflows in the face of excess than to increase sales number, but cut profits, by selling cheaper. Additionally, a surplus of inventory assumes higher costs of operation due to storing, insuring and managing all of the excess stock, therefore cutting margins in such a situation, especially in an industry where they are already slim by default, would be a questionable business strategy.

maxwellsilverhammer
07-23-2017, 07:56 AM
Please take this from a purely theoretical standpoint, since you can imagine our internal operating procedures aren't free to share, but logically, lowering premiums wouldn't make sense unless sales were abnormally low. Sales have remained stable, and the market as a whole does not show lack of demand. It is much more cost effective to reduce inflows in the face of excess than to increase sales number, but cut profits, by selling cheaper. Additionally, a surplus of inventory assumes higher costs of operation due to storing, insuring and managing all of the excess stock, therefore cutting margins in such a situation, especially in an industry where they are already slim by default, would be a questionable business strategy.

now that is a very good answer - thank you