Gold trading
2006-12-02 02:19:42 · 1 answers · asked by Voyager 1 in Business & Finance ➔ Investing
My local gold dealer buys and sells gold bars/coins with ~$20/ounce spread. Does anyone know how this business is run, how the dealer makes his money while hedging his risks with the volatile prices going on? His is a small operation, so I don't think he is using the futures markets.
2006-12-02 02:23:51 · update #1
If you were buy coins from him, and then the next day you turned it around he'd give you a lower 'bid' price even if the market didn't move. But also, if he is smart, he knows when the price is low and is a buyer from wholesale or the government. So, when it is high, he is making a lot of money. This isn't a big money maker, unless he is a middle man for a bank, or other that sells to him near cost.
2006-12-02 07:34:14 · answer #1 · answered by Ryan W 2 · 0⤊ 0⤋