How the Gold Market Actually Works (2025 Guide)

00:00:00.000 | - Gold has captivated people for centuries,

00:00:02.980 | whether as a hedge against inflation, a shiny keepsake,

00:00:05.920 | or a means to turn a quick profit.

00:00:08.080 | But there is more to gold than meets the eye.

00:00:10.040 | From Costco selling gold bars that fly off the shelves

00:00:12.920 | to people who score massive profits

00:00:14.840 | on limited US mint drops,

00:00:16.720 | the modern day gold market is so full of surprises.

00:00:19.720 | In today's episode, I'm joined by Trey Benedict

00:00:22.120 | who knows the ins and outs of this market

00:00:24.280 | and is the founder of Pure,

00:00:25.880 | one of the biggest places to buy and sell gold online.

00:00:29.000 | We're going to break down the myths and realities

00:00:31.320 | of gold investing, the dynamics of spot pricing,

00:00:34.240 | and how you can navigate and profit in this market.

00:00:37.100 | I'm Chris Hutchins, and if you enjoy this episode,

00:00:39.440 | please share it with a friend or leave a comment or review.

00:00:42.080 | And if you want to keep upgrading your life, money,

00:00:44.160 | and travel, click follow or subscribe.

00:00:46.540 | Trey, thanks for being here in person early in the morning.

00:00:52.160 | - Yeah, thanks for having me and glad to be here,

00:00:55.080 | you know, before everything gets crazy, so.

00:00:57.520 | - Yeah, yeah, we're doing this early

00:00:59.000 | 'cause the gold markets.

00:00:59.900 | But I guess let's start with the gold markets.

00:01:02.320 | How big is the gold market?

00:01:04.160 | - The gold market's pretty large.

00:01:06.520 | So you've got like your, you know, larger like central banks

00:01:10.120 | which is like, you know, obviously governments

00:01:12.680 | trading around gold to hedge their currencies

00:01:15.360 | as well as reserves.

00:01:16.820 | Then you've kind of got like the market makers,

00:01:19.840 | which is like, you know, your JP Morgans

00:01:23.280 | and like, you know, hedge funds and stuff like that

00:01:26.600 | of the world.

00:01:27.440 | And then you've got kind of more of like this like

00:01:30.320 | retail segment as well that's really kind of adapted

00:01:33.160 | in this last like, you know, 30 to 40 years

00:01:35.800 | since they've actually made gold legal to own in the US

00:01:40.120 | since the 70s.

00:01:41.120 | So it's kind of like, you know, there's this expanded market

00:01:44.040 | but if I had to put like an actual number on each,

00:01:47.720 | you know, the large markets, like in the trillions,

00:01:50.240 | like it's quite a lot, like there's a lot of gold

00:01:52.720 | in just the overall market.

00:01:54.620 | And then the market makers, you know, obviously

00:01:56.800 | are kind of in the billions area.

00:01:58.480 | And then like our retail sector for like gold bars

00:02:01.160 | is around 55 billion.

00:02:02.720 | So, you know, it kind of depends on which segment

00:02:05.680 | you're looking at.

00:02:06.520 | - Okay, and good backup.

00:02:07.560 | So gold was not legal before the 70s.

00:02:10.080 | - Yeah, so gold was outlawed in 1933

00:02:15.080 | when the currency of the US changed from actual gold coins

00:02:21.760 | to what we now have as like, you know,

00:02:24.020 | federal reserve currency.

00:02:26.420 | So treasury notes kind of replaced what used to be

00:02:29.700 | like a gold backed currency.

00:02:31.260 | And then the first bullion coins were the Krugerrand

00:02:34.100 | and the Krugerrands from South Africa.

00:02:36.020 | So I know a lot of people kind of, you know,

00:02:38.740 | used to buy those and you still see them nowadays.

00:02:41.300 | But then the US started wanting to play a little bit more

00:02:43.700 | in that market and they realized how much money

00:02:45.700 | South Africa was making.

00:02:47.060 | So they produced the gold eagle

00:02:48.780 | and production started in 1985.

00:02:52.200 | But the first actual US gold coins since the 30s

00:02:57.120 | was these things called like an arts medal.

00:02:59.440 | So they literally, you'd send the post office

00:03:01.840 | like 30 bucks in the mail and they'd send you back

00:03:03.800 | like an ounce of gold.

00:03:05.040 | And so that was like the first adaptation

00:03:07.240 | to, you know, retail investors getting involved

00:03:10.160 | in the United States.

00:03:11.080 | But the gold eagle seemed to be like quite a hit

00:03:14.660 | and it's still kind of like the top coin around the world

00:03:18.920 | for people who are buying like retail investments.

00:03:21.600 | And then they also introduced like the buffalo as well,

00:03:25.480 | which is a 24 karat gold coin.

00:03:27.600 | So the buffalo is quite a pure gold coin

00:03:32.600 | is to compete with the Canadian maple leaf.

00:03:35.720 | And it's pretty successful and it's like launched.

00:03:39.440 | So the US has done quite a good job

00:03:42.600 | of getting into the retail sector market, so yeah.

00:03:45.960 | - For those on audio, we'll get into a little bit

00:03:47.720 | of my recent foray into gold,

00:03:49.200 | but I'm holding a buffalo and a few other coins here.

00:03:51.840 | Why do you think people are buying these, right?

00:03:53.520 | Is it to own gold?

00:03:54.840 | Is it collector's items?

00:03:56.240 | Is it speculation?

00:03:57.600 | - Yeah, so I think there's a couple,

00:03:59.800 | also a couple different types of people that buy them.

00:04:02.360 | I think, you know, the first off is kind of your,

00:04:05.000 | like I'm scared of the government taking away like,

00:04:08.760 | you know, currency and like, you know,

00:04:11.320 | the dollar going down,

00:04:13.120 | which is not something I personally subscribe to,

00:04:16.040 | but like, you know, I can understand

00:04:18.040 | why people would be hesitant

00:04:20.580 | and why it could cause some anxiety for some people.

00:04:23.680 | So, you know, having some sort of tangible like asset,

00:04:27.320 | whether that be like, you know, collectible or art

00:04:29.920 | or something to hold a store of value,

00:04:32.000 | I think that's one kind of area.

00:04:34.080 | And then I think the other thing is, you know,

00:04:36.560 | obviously gold is kind of like on a massive run

00:04:39.820 | the last like year and a half ish or so.

00:04:43.080 | And I think, you know, general heightened like tensions

00:04:46.680 | with the election and like in kind of like politics

00:04:50.480 | and just like overall around the world,

00:04:53.120 | like people have seen gold as like a place to, you know,

00:04:56.520 | park a little bit of extra investment cash.

00:04:59.800 | So I think people would typically go for physical gold

00:05:03.320 | just 'cause it has a premium over like, you know,

00:05:06.200 | buying like just, I mean, you know, the regular ETF,

00:05:09.880 | but you could obviously just go buy an ETF

00:05:12.880 | and get the same exposure.

00:05:14.160 | So I think it's just kind of choice there,

00:05:16.200 | but obviously there's some collectability and some coolness

00:05:19.240 | of just like holding some gold in your hand.

00:05:21.720 | So I think it's always cool to be like,

00:05:22.960 | oh, you know, it's like a gold bar.

00:05:24.480 | So it's like, that's a fun thing for all that.

00:05:27.000 | So, yeah.

00:05:27.840 | - Though full disclosure for people listening,

00:05:30.880 | in my idea, a one ounce gold bar that costs,

00:05:34.320 | you know, 2,500 plus dollars,

00:05:36.480 | depending on where the price is when this comes out,

00:05:39.400 | always seemed like it was gonna be a lot.

00:05:42.440 | And then I picked it up and it's like, you know,

00:05:45.520 | the size of like 10 playing cards, right?

00:05:47.520 | Like, and that's in the plastic case,

00:05:49.600 | out of the plastic case, it's like two postage stamps wide

00:05:52.480 | and like a quarter of an inch high.

00:05:54.520 | So I just, I had this idea when I went to Costco

00:05:57.480 | the first time and bought a gold bar and I thought,

00:06:00.080 | oh, I'm gonna have this big gold bar and bring it back home.

00:06:02.760 | And my wife was like, well, make sure people don't see you

00:06:04.560 | carrying it around the parking lot.

00:06:05.960 | And I was like, yeah, it fit in my pocket by like,

00:06:08.560 | you know, it's smaller.

00:06:09.400 | It's about the size of a credit card.

00:06:10.840 | - Yeah, and I think people often get like confused

00:06:14.960 | of how dense gold is.

00:06:16.920 | Like it's quite a dense metal,

00:06:18.360 | even when you compare it to something like silver,

00:06:21.560 | palladium or platinum, like it is much, much smaller.

00:06:25.680 | Like an ounce of gold is just like, it's heavy.

00:06:28.200 | You can like feel it in your hand.

00:06:30.200 | And sadly we don't have a kilo bar here,

00:06:33.080 | but kilos are interesting.

00:06:34.840 | If you were to have a cell phone made out of gold,

00:06:36.840 | that's basically what a kilo would feel like,

00:06:39.000 | but it's quite heavy.

00:06:40.120 | Like you feel it and you've got some heft to it.

00:06:42.520 | - So you mentioned you're 22.

00:06:44.200 | I imagine most people are thinking someone who loves gold

00:06:47.320 | and is, you know, thinks about it a lot is closer to 75

00:06:50.920 | or 80 than 22.

00:06:52.240 | How did you get into this?

00:06:54.000 | - Yeah, so I got into this basically because of my dad.

00:06:57.480 | He's kind of likes buying and collecting,

00:07:00.480 | you know, different stuff.

00:07:01.960 | And he introduced me to coins when I was a kid.

00:07:05.480 | I used to go to coin shows in North Carolina.

00:07:07.720 | That's where I was originally from.

00:07:08.960 | We describe them now as like redneck coin shows.

00:07:11.480 | Like you go and there's like a whole bunch of like,

00:07:13.400 | you know, people you'd see like from like places

00:07:17.200 | you've never heard of.

00:07:18.160 | And they just have all these coins in front of you.

00:07:19.960 | So I would always look for Chinese coins,

00:07:22.160 | but he was interested in buying gold.

00:07:24.560 | This was like a bit after the 2008 recession.

00:07:27.280 | So like, obviously I think there was some like,

00:07:30.120 | you know, fear and anxiety in his mind

00:07:32.040 | on like how to like keep, you know, assets stable.

00:07:35.160 | But like, I think, you know, he always wanted to kind of,

00:07:41.400 | you know, include me in what he was doing.

00:07:43.520 | And so I was able to figure out very quickly

00:07:46.080 | that you can make a lot of money on coins.

00:07:48.120 | And so I would just start flipping Chinese coins

00:07:50.880 | back to China.

00:07:51.720 | And it was super fun and, you know,

00:07:53.560 | made a lot of money as a kid.

00:07:54.720 | - So out of curiosity, making a lot of money as a kid,

00:07:56.680 | what is that like?

00:07:57.520 | Tens of dollars, hundreds of dollars?

00:07:59.120 | - I would say like my biggest score as a kid was like,

00:08:02.600 | I made like 10 grand off of a coin

00:08:05.160 | that I had bought for like 400 bucks.

00:08:07.800 | And so I was like, probably in like seventh grade.

00:08:11.960 | And I had bought this like Franklin half dollar,

00:08:14.840 | just like basically generic silver coin.

00:08:17.800 | And it was graded already.

00:08:19.360 | So it was in like one of the holders that, you know,

00:08:21.560 | PCGS or NGC are like grading companies.

00:08:23.880 | Same as sports cards, you can get them certified

00:08:26.800 | and have like a specific number attached to it.

00:08:29.560 | And so I was able to get that number up,

00:08:31.560 | upgraded pretty quickly by like, you know,

00:08:34.440 | using different techniques

00:08:36.000 | that restoration people would use.

00:08:38.360 | So I was pretty good at doing like what they would call

00:08:41.200 | just coin restoring.

00:08:42.720 | So I'd be able to identify, get it re-graded

00:08:46.200 | and then be able to sell it again.

00:08:47.600 | And that was, that's kind of like a specific path

00:08:50.400 | that a lot of people do in the coin industry

00:08:52.640 | to make like a lot of money.

00:08:54.280 | So you can do that at higher volume or lower volume,

00:08:57.040 | depending on like, you know, your budget.

00:08:58.760 | - And that's allowed.

00:09:00.240 | It's not like a gray area.

00:09:01.600 | - It's like a, you know, you don't go around telling people

00:09:06.120 | like you're like a coin doctor.

00:09:08.640 | You go around telling people like, hey, you know,

00:09:12.640 | like I'm a coin dealer and like I have nice coins

00:09:16.600 | and here they are.

00:09:17.440 | So like, you know, the results kind of speak for themselves,

00:09:19.700 | but obviously you're not gonna like disclose

00:09:22.320 | all of this information of how you've done it to people.

00:09:24.960 | And so that's kind of like the trade secret, I guess,

00:09:27.760 | to like why some coin dealers are better

00:09:30.200 | than other coin dealers.

00:09:31.360 | But that's particularly with rare coins.

00:09:33.360 | I think, you know, generally like the other stuff

00:09:36.520 | is more of bullion, which is boring to them.

00:09:40.320 | That's kind of like how they perceive bullion

00:09:42.880 | in this realm.

00:09:44.160 | - Maybe cover the difference there.

00:09:45.480 | There's bullion and how does that market compare?

00:09:49.420 | What are the different aspects?

00:09:50.800 | - So most rare coin like collectors

00:09:54.080 | would describe them as numismatists.

00:09:56.080 | Like they are the collectors of rare coins

00:09:59.120 | and bullion sort of branches into numismatics

00:10:03.280 | and the fact that there are coins that are bullion

00:10:06.760 | that happen to become rare.

00:10:08.560 | Like, you know, a gold buffalo could become rare

00:10:11.320 | if the mintage is low and that's happened.

00:10:13.280 | Like some gold eagles are worth like, you know,

00:10:15.660 | two to three times their spot value

00:10:17.440 | just because they're rare and people collect them.

00:10:21.320 | But modern markets are a little bit different

00:10:23.320 | in the fact that, you know, a lot of them have to be graded.

00:10:26.480 | They have to be like, kind of have that stamp of approval

00:10:30.240 | that they're like a 70.

00:10:31.720 | A 70 is like the perfect grade.

00:10:33.760 | But for rare coins, it's very rare

00:10:36.640 | that you would see anything above a 67.

00:10:39.500 | Like a 67 is like quite a nice rare coin.

00:10:43.560 | And rare coins, you're usually not traded

00:10:45.360 | upon their spot value.

00:10:46.920 | People really just don't care.

00:10:48.600 | Like, you know, you could have a $20 St. Gaudens,

00:10:52.520 | which is essentially the equivalent

00:10:54.640 | to a gold eagle these days.

00:10:56.260 | But it could trade very rapidly differently

00:11:00.400 | than a gold eagle does just because, you know,

00:11:03.920 | the eye appeal and like the scarcity,

00:11:08.320 | as well as just like, you know,

00:11:10.680 | people may like it better than the other one

00:11:12.960 | so they pay more.

00:11:13.780 | So I think it's more unique into that fact.

00:11:15.600 | So it's hard to kind of quantify

00:11:19.720 | why someone would want to pay more for the gold value.

00:11:24.400 | But I think it's just like, you know,

00:11:26.680 | as there is with art, like people will pay more

00:11:29.400 | just because they like it.

00:11:30.400 | - Now, when it comes to actual gold,

00:11:32.660 | similarly, there's no intrinsic value, right?

00:11:35.680 | This isn't an income producing asset, but it has a value.

00:11:40.240 | How is bullion and gold kind of more broadly

00:11:44.200 | than just rarity and coins valued and priced?

00:11:47.440 | - The first thing that people look at is like,

00:11:49.960 | is it denominated?

00:11:51.360 | Like, you know, is it an actual coin or is it a bar?

00:11:56.000 | So I think for, you know, a buffalo and an eagle,

00:11:59.080 | they're actual $50 coins.

00:12:00.800 | So they have a little bit more use case in people's mind.

00:12:05.040 | - Now, obviously I paid way more than $50,

00:12:07.200 | but worst case for this buffalo,

00:12:09.480 | I can take it to the US government,

00:12:11.800 | you know, or a bank and get $50 from it?

00:12:13.480 | - Yeah, I mean, theoretically, you could go to Taco Bell

00:12:16.240 | and buy some tacos with it.

00:12:18.600 | But I think that would cause some problems

00:12:20.840 | if you tried to do that.

00:12:22.000 | I don't think, there's like random YouTube videos out there

00:12:26.000 | of, you know, people being like provocative,

00:12:27.880 | trying to like turn in their gold at, you know,

00:12:31.560 | some random fast food and it just doesn't work out.

00:12:33.920 | But I think that, you know, generally people start

00:12:36.920 | from like who's, who made the coin or bar.

00:12:41.280 | And so, you know, for bars, that's like the assayer

00:12:44.480 | versus the coins, the mint.

00:12:45.920 | So you just wanna be able to make sure

00:12:48.720 | it's like a reputable assayer mint.

00:12:51.080 | And obviously like, you know, the United States men

00:12:53.600 | and Pamp Suisse are like quite reputable

00:12:56.560 | and so their name brand.

00:12:58.040 | But yeah, I think, you know, people generally look for,

00:13:02.240 | is it like a government coin?

00:13:03.640 | And then if it's not, is it a reputable assayer?

00:13:06.440 | - An assayer is the person who creates the bar?

00:13:09.200 | - So an assayer is a person who refines

00:13:11.400 | and actually produces that bar.

00:13:13.560 | So for Pamp Suisse, it's Pamp Suisse.

00:13:16.400 | Like they are the assayer and refiner.

00:13:18.320 | So on every bar, you can see kind of like

00:13:21.440 | who is the actual assayer of that place.

00:13:24.400 | So on the back, there'll be a signature of that assayer.

00:13:28.360 | Not exactly sure who it is,

00:13:29.880 | but there is a certified assay on there.

00:13:32.920 | - Ilana? - Yeah, Ilana.

00:13:34.720 | Shout out Ilana. (laughs)

00:13:36.480 | But yeah, so you can kind of generally see like,

00:13:40.960 | you know, is it reputable based upon that?

00:13:44.320 | And then from there, it's, you know,

00:13:46.440 | like just choice of design.

00:13:49.080 | So people kind of look and they're like, you know,

00:13:51.240 | what is the design that I like?

00:13:53.120 | And, you know, what will hold the most value?

00:13:55.640 | That's kind of the question I always get

00:13:57.480 | from people who are like quote unquote investors in gold

00:14:00.320 | is like, what will always have the most resale value

00:14:03.200 | in the future?

00:14:04.200 | And generally the more kind of premium products

00:14:08.280 | like Pamphortunas and Buffalos and Eagles

00:14:12.040 | kind of have that like extra added value.

00:14:14.840 | Like you're always gonna be able to get

00:14:16.880 | like a certain value, like pretty close to the spot value

00:14:20.880 | if you hold one of those compared to OPM metals,

00:14:24.240 | like that's a random brand that's like unaccredited now.

00:14:27.880 | And you're not gonna get very far over the spot value.

00:14:30.720 | Like essentially that's gonna be melted down.

00:14:32.640 | But premium product like, you know,

00:14:34.520 | Fortunas and Buffalos are always gonna have

00:14:37.160 | like the value of the gold

00:14:39.240 | plus maybe a little bit of premium value

00:14:41.400 | just because there is that like inherent resale.

00:14:43.800 | - And the value of the gold,

00:14:44.840 | talk a little bit about spot price

00:14:46.440 | and how that market works.

00:14:47.560 | - Spot price, it kind of is a little bit different

00:14:50.520 | than your general like, you know, stock trading hours.

00:14:55.440 | Like it's similarly follow.

00:14:57.640 | So every Sunday at 3 p.m. PST.

00:15:01.360 | So that's kind of when the like, you know,

00:15:03.440 | market opens in our eyes.

00:15:05.320 | So overseas, you know, there is gold trading starting then.

00:15:09.080 | So people who are like very serious about, you know,

00:15:12.560 | the market and following it will be kind of

00:15:14.760 | at their computers like ready to go at 3 p.m. on Sunday.

00:15:18.920 | And so you have 3 p.m. on Sunday,

00:15:21.480 | 24 hour trading all the way until Friday at 3 p.m.

00:15:25.520 | So it's quite some time that you, you know,

00:15:28.240 | you have to be kind of involved in the market.

00:15:30.680 | So, you know, in the middle of the night,

00:15:33.560 | the whole spot price could move up or down,

00:15:36.240 | you know, 50 to $60.

00:15:37.960 | And you would never know until you'd wake up in the morning

00:15:40.120 | unless you're like, you know, trading overnight.

00:15:42.000 | But I would say the larger like physical traders

00:15:45.640 | are fully hedged.

00:15:47.360 | Like they have zero risk to the market or very little risk.

00:15:51.560 | So they're trading on what we call the premium.

00:15:54.480 | So the premium is just basically like our positive

00:15:56.760 | or negative markup on the actual physical items themselves.

00:16:00.160 | So like buffalos are like, you know,

00:16:01.560 | between 2% to 3% premium right now.

00:16:03.680 | And fortunos are like between 15 to $30 premium.

00:16:08.640 | So essentially, they're always trying to make a spread

00:16:12.200 | upon, you know, like what that premium is

00:16:15.920 | rather than the spot price itself.

00:16:17.440 | I think this is a little bit different than, you know,

00:16:20.120 | general investors like perception,

00:16:22.600 | because the general investor perception is like,

00:16:24.960 | what is my all out price that I'm gonna get?

00:16:27.920 | And you would quantify that by the spot price

00:16:30.600 | plus or minus the premium that you would have.

00:16:33.520 | So it's a little bit different between the two.

00:16:35.600 | - So someone's actually like making a bet

00:16:38.080 | that these gold buffalo coins

00:16:40.440 | are going to be worth more than spot price in the future.

00:16:44.320 | And so they're kind of not worried

00:16:47.200 | about what the spot price of gold does.

00:16:48.920 | Whereas I'm imagining a retail investor buying GLD,

00:16:52.400 | the ETF is solely concerned with spot.

00:16:55.440 | - Yes, yeah, it's like literally the opposite mindset

00:16:59.120 | between someone who is like actually a trader

00:17:01.760 | of physical metals versus someone

00:17:03.960 | who's like a retail investor of the GLD.

00:17:06.840 | The physical traders are, yes,

00:17:10.400 | they're trying to create a supply and demand market

00:17:14.600 | based upon like what the scarcity of that specific item is.

00:17:19.600 | So there are some really interesting items

00:17:22.160 | that, you know, Costco could easily offer

00:17:24.920 | that actually fluctuate quite a bit.

00:17:26.840 | We quantify those as like proof gold.

00:17:29.640 | So it's like a buffalo,

00:17:31.240 | but it's in a collector strike version.

00:17:34.160 | And so the background of the buffalo

00:17:37.360 | is actually like a high like polish

00:17:41.240 | versus this is just like,

00:17:43.040 | we would call that like a burnish strike.

00:17:44.960 | People would trade these like collector coins

00:17:47.600 | at a higher premium and they'll fluctuate quite a bit.

00:17:50.400 | Like, you know, they'll go from $200 an ounce over

00:17:54.000 | to $500 an ounce over,

00:17:55.600 | depending on like how the spot prices move.

00:17:57.400 | - For the average, you know, person who's like,

00:18:00.120 | I wanna invest in gold.

00:18:01.400 | I think it's a good hedge against inflation.

00:18:04.320 | So I'm buying gold ETF or even buying gold bars

00:18:07.120 | or you know, whatever.

00:18:09.000 | What's causing that spot price to move?

00:18:12.040 | - Yeah, it's a little bit beyond my control

00:18:16.080 | of like how I think about it.

00:18:17.640 | Like, but I think generally it's like, you know,

00:18:20.280 | economic data that comes out.

00:18:22.320 | Like nearly every like FOMC meeting,

00:18:25.720 | there's some movement,

00:18:26.960 | but I mean, that's the same in stocks.

00:18:28.840 | Like, you know, some stuff will go up,

00:18:30.600 | some stuff will go down.

00:18:32.000 | And then, you know, just like geopolitical tensions,

00:18:35.400 | like we'll kind of always have our eye on different stuff

00:18:39.640 | just to make sure that, you know,

00:18:41.120 | like whatever hedge position is open is like, you know,

00:18:44.120 | staying clear of like different events.

00:18:47.200 | So I think, you know, general market makers

00:18:50.640 | obviously are selling to like larger people.

00:18:53.880 | So they always try and mitigate risk

00:18:55.720 | by understanding all of this data.

00:18:57.640 | But to a retail investor,

00:18:59.320 | I think it may be a little bit beyond our control.

00:19:02.200 | - So it's not too dissimilar to most speculative assets,

00:19:07.080 | right? - Yeah.

00:19:07.920 | - Like Bitcoin is priced at what it is

00:19:09.680 | mostly because of supply and demand.

00:19:11.680 | - Yeah.

00:19:12.560 | - But when you said a lot of the traders

00:19:13.840 | are trading these coins, do you mean coin traders

00:19:17.680 | or do you mean like the JP Morgans of the world?

00:19:19.680 | - There are a couple larger firms

00:19:22.880 | that trade physical metals,

00:19:25.440 | like not really as much as they used to.

00:19:29.960 | Like Scotiabank used to be a pretty large trader of metals.

00:19:34.960 | And, you know, HSBC is still pretty big,

00:19:38.600 | but their access is very, very limited.

00:19:41.800 | Like they still run a physical trading desk.

00:19:43.960 | So you can call them up.

00:19:45.720 | They'll probably tell you, you know, like,

00:19:47.440 | hey, you need some enterprise account to like trade with us.

00:19:51.840 | But I mean, if you have the means to do it,

00:19:54.080 | you could possibly buy from them

00:19:56.960 | and maybe even sell to them.

00:19:58.360 | But it's very difficult now

00:20:00.680 | just because like people running physical gold desks

00:20:03.320 | is a thing of the past.

00:20:05.200 | It used to be quite large in like the '80s and '90s.

00:20:07.880 | But nowadays, like most of it's done on computers

00:20:11.120 | and warehouses that we would never know where they are.

00:20:13.800 | - And when I'm buying GLD

00:20:16.200 | or kind of something from my computer

00:20:18.920 | on my brokerage platform,

00:20:20.900 | is there physical gold somewhere?

00:20:22.680 | - Yeah, so there's a couple different types of GLD.

00:20:25.920 | There's like allocated versus non-allocated.

00:20:28.080 | So somewhere around the world in some Comex depository,

00:20:31.920 | there's probably a 400 ounce gold bar

00:20:34.640 | that is allocated to some contractor,

00:20:36.760 | 400 ounces worth of gold allocated to a contract.

00:20:39.920 | And so essentially you're buying

00:20:41.520 | right to the exposure of that bar.

00:20:44.160 | People actually enacting physicals

00:20:47.400 | and like converting contracts

00:20:49.400 | and waiting till expiry is a little bit rare,

00:20:52.580 | but I have seen particular instances

00:20:55.720 | where contracts need to be backed.

00:20:57.480 | And so if you have an opportunity

00:20:59.880 | to play at a larger gold market,

00:21:01.840 | you can end up backing contracts

00:21:03.920 | when we call it like the EFP exchange or physical

00:21:08.000 | gets like into a negative zone.

00:21:10.520 | So where the ETF price is actually higher

00:21:12.600 | than the physical price.

00:21:13.800 | There's like a certain amount of arbitrage

00:21:15.640 | where if you have physical gold

00:21:17.440 | and you can back it in large quantity,

00:21:19.680 | you can back these contracts

00:21:21.440 | and be able to help a retail investor

00:21:24.200 | be able to have that exposure.

00:21:26.500 | So generally most of them are like semi-allocated.

00:21:30.240 | So you're buying like the right

00:21:32.520 | to potential future exposure.

00:21:35.700 | So it's like, it gets a little bit complicated.

00:21:38.840 | But I mean, that's like do your own research

00:21:42.760 | on which GLD you're gonna buy

00:21:45.320 | or like what specific ETF you want to play in.

00:21:48.400 | - So the reason we got connected

00:21:50.440 | is that in the last few weeks,

00:21:51.800 | I've been just exploring this

00:21:53.440 | after going to a conference

00:21:55.160 | and listening to a talk about Costco gold.

00:21:58.240 | So I came back and went to Costco.

00:21:59.720 | I said, oh, there's this gold here.

00:22:00.920 | And I think the thing that for me kicked it off

00:22:02.840 | was the U.S. Mint had this release

00:22:05.200 | of a 230th anniversary flowing hair coin.

00:22:09.480 | I honestly have no clue what that means.

00:22:11.040 | So I'm gonna ask you to explain it.

00:22:12.480 | But I picked up a couple

00:22:14.000 | and it was almost like everyone knew in advance

00:22:18.040 | that if you could just go on the U.S. Mint website

00:22:20.060 | and buy this at 9 a.m. Pacific, you would make money.

00:22:23.120 | And sure enough, that was the case.

00:22:25.120 | Talk a little bit about that

00:22:26.640 | and how there are opportunities for regular consumers

00:22:30.800 | to invest and make money in gold.

00:22:33.000 | - Yeah, so we've been planting seeds

00:22:36.320 | for quite some time on this flowing hair gold coin,

00:22:39.360 | like probably a year in advance.

00:22:42.640 | Like this is something that we knew

00:22:45.240 | was gonna be good from the start.

00:22:46.640 | And it ended up being not as good as I thought,

00:22:49.840 | but still quite well for the people I think got involved.

00:22:52.960 | But essentially, the U.S. Mint makes commemorative coins.

00:22:57.160 | And so they try to commemorate some event in U.S. history,

00:23:01.480 | which happened to be the Flowing Hair Silver Dollar,

00:23:04.000 | which is our first silver dollar in the U.S.

00:23:07.560 | And they actually did a really good job

00:23:08.960 | on the rendition of it.

00:23:10.440 | I don't know why they picked a 230th anniversary.

00:23:13.920 | It seems kind of arbitrary.

00:23:15.840 | But the original silver dollar

00:23:20.440 | is a little bit larger of a size

00:23:23.240 | and it has edge lettering.

00:23:25.440 | But the $17.94 is one of the most expensive U.S. coins

00:23:29.200 | that you could possibly have.

00:23:31.520 | I think one recently sold for like $10 million.

00:23:34.440 | Yeah, so it's a very like esteemed coin

00:23:38.880 | in the coin industry.

00:23:40.160 | Like everyone knows that that's a really great coin.

00:23:42.640 | So when the U.S. Mint decided

00:23:45.080 | that they were gonna put that on the product schedule,

00:23:47.560 | we immediately knew like that's gonna be like really good.

00:23:51.360 | And it kind of started with the silver medal.

00:23:55.200 | I don't know if you'd bought the silver medal prior to.

00:23:58.400 | - I didn't.

00:23:59.240 | - Yeah, so they've made a silver counterpart

00:24:00.600 | which they had basically created this like lottery out of.

00:24:04.520 | And the Mint's been doing a great job

00:24:07.000 | on making consumer coin releases like limited drops.

00:24:11.720 | They've basically taken the Supreme model

00:24:14.280 | and made it for the U.S. Mint, which is amazing.

00:24:17.680 | Old like boomer collector people hate it.

00:24:21.280 | Like they hate the Mint doing that.

00:24:23.120 | But I think that it's the best way to get people into coins.

00:24:26.920 | 'Cause obviously now we're talking about it.

00:24:28.600 | It makes no sense that we would be talking about

00:24:30.960 | a limited coin release unless it was like,

00:24:34.000 | you know, it's sold out and there was a resale market

00:24:36.560 | and there was all this like hype generated around it.

00:24:39.000 | But the silver medal had this like privy mark,

00:24:41.280 | which is something that the Mint has done in the past.

00:24:43.760 | And they basically randomly put in 1794

00:24:48.080 | of these privy marked coins into the 50,000 that they sold.

00:24:51.840 | Those privy marked coins are worth like four grand now.

00:24:54.280 | The retail was a hundred dollars.

00:24:56.120 | So some people became instantly like, you know,

00:24:58.520 | could pay their rent, could pay groceries for like a year.

00:25:01.400 | Like they had all of this like excess, you know,

00:25:04.240 | consumer surplus from buying this coin for a hundred dollars.

00:25:08.200 | So I think people got really excited about the gold one.

00:25:11.320 | The sad part is they didn't do a privy for the gold.

00:25:13.960 | They're actually auctioning them

00:25:15.200 | and they're going for ridiculous prices right now.

00:25:18.520 | But the gold ended up doing very well

00:25:22.120 | 'cause the design is just, you know, good.

00:25:24.680 | Like it's just hands down, like a very nice design.

00:25:27.520 | Like, you know, a lot of coins we see come through

00:25:32.160 | the platform and when we got the first one in,

00:25:34.400 | we were like, wow.

00:25:35.920 | Like that was kind of the reaction that we had.

00:25:38.560 | And I think it's been a while since I've like

00:25:41.480 | actually liked a coin that the Mint has put out.

00:25:44.680 | So the, I think, you know, maybe just some other people

00:25:48.560 | that are more familiar with coin releases,

00:25:50.600 | like they would call this one a dud

00:25:53.840 | in comparison to the other ones.

00:25:55.320 | 'Cause in 2020, which was like what I would consider

00:25:58.360 | like peak coin market, they had released a privy gold eagle,

00:26:03.360 | proof gold eagle, and the retail was $2,000.

00:26:07.280 | And that coin sells for like 20 grand

00:26:09.880 | in a perfect 70 now.

00:26:12.240 | And they're very, very hard to come by.

00:26:15.200 | - But if you were relatively tech savvy

00:26:18.200 | sitting at your computer the day it launched,

00:26:20.000 | would it have been easy to get one?

00:26:21.560 | - Yeah, yeah.

00:26:22.800 | Like if you can buy like Amazon in two clicks, you're fine.

00:26:27.800 | Like your competition is very low.

00:26:31.080 | And I think a lot of numismatists

00:26:35.760 | that are interested in modern coins

00:26:37.440 | are likely not your most tech savvy people.

00:26:40.960 | So it's a little bit difficult to have them

00:26:43.040 | go on and buy a coin.

00:26:44.160 | So I think that's why they're probably upset

00:26:45.800 | that they had to buy them on the aftermarket.

00:26:48.120 | But yeah, it's generally like, you know,

00:26:50.880 | the process is like making an account,

00:26:53.800 | it's putting your credit card info in,

00:26:55.280 | waiting until the drop time,

00:26:57.320 | and then just going to hit buy

00:26:58.920 | and then hope that the order goes through.

00:27:01.120 | So I think it's pretty easy to be able to do that.

00:27:04.840 | - How often does the US Mint release something

00:27:07.840 | that is exciting?

00:27:11.160 | - I would say like generally once a year.

00:27:14.280 | And it's kind of at the end of the year.

00:27:16.480 | And some years you may get really lucky.

00:27:19.000 | And like, for instance, 2020,

00:27:21.360 | every single product that came out was good.

00:27:23.840 | Like every single one for like eight releases in a row,

00:27:28.000 | which just like--

00:27:28.840 | - And so they do multiple releases a year,

00:27:30.400 | but the hyped one that's exciting

00:27:32.480 | is towards the end of the year.

00:27:33.320 | - They usually do, like they have their continuing series,

00:27:37.880 | and they'll release those every year.

00:27:39.520 | And sometimes the continuing series can be like very good.

00:27:41.840 | Like I said before, like Proof Gold

00:27:43.880 | can end up being like a very good release.

00:27:47.240 | And generally that's because like, you know,

00:27:49.200 | just supply and demand, you know,

00:27:51.560 | the dealers want more supply to sell

00:27:54.240 | to their like, you know, retail customers.

00:27:56.640 | And so they want to create a market for buying these.

00:27:59.480 | But yeah, at the end of the year, around November,

00:28:02.560 | there's always kind of one coin

00:28:04.800 | that catches everyone's eye.

00:28:06.760 | And they didn't do it in 2022, which was kind of sad.

00:28:11.520 | So there was kind of like a lull period.

00:28:14.400 | 2020, 2021 were good.

00:28:16.200 | 2023 had a release that was like not as popular,

00:28:19.040 | but still did well.

00:28:20.360 | And then 2024, obviously the flowing hair coin.

00:28:23.040 | So we don't really know what's going to come in next year

00:28:25.240 | until like maybe about a month from now.

00:28:27.480 | And then I can kind of tell you like that one might be okay.

00:28:31.000 | And then we kind of need to wait

00:28:32.360 | for a little bit more info.

00:28:33.920 | But I mean, I had been writing about the flowing hair coin

00:28:37.760 | since like June, and I had had like, you know,

00:28:41.280 | mock-ups done and everything.

00:28:42.640 | And then everyone started using that.

00:28:44.600 | So I think it was, you know, really good for us

00:28:47.640 | to be able to be early on that information.

00:28:50.200 | And then we also kind of got some,

00:28:54.600 | a little bit of insider stuff

00:28:56.280 | just because we're a bulk supplier of the mint.

00:28:59.120 | So we can see kind of a little bit before the public sees

00:29:02.840 | like what, you know, the mintage is going to be

00:29:05.160 | and like what that coin might actually look like and stuff.

00:29:08.720 | And so I think it's always good to share that info

00:29:11.120 | as it comes out so people can kind of see like,

00:29:15.000 | you know, what are they actually going to buy?

00:29:17.160 | And I think they didn't release the product images

00:29:20.000 | until like two days before or something.

00:29:22.520 | So it was very strange release for this one.

00:29:25.320 | - I don't think I got into this release

00:29:27.760 | until about two days before, so I missed the whole backstory.

00:29:31.120 | - Yeah, there's quite a backstory.

00:29:32.880 | And you know, obviously like, I mean,

00:29:36.600 | our kind of drive is that, you know,

00:29:39.560 | we have to create a supply and demand

00:29:42.840 | for that specific item.

00:29:44.480 | And obviously like, you know,

00:29:46.640 | people can sell it on eBay or locally

00:29:49.440 | or all this other stuff.

00:29:50.640 | But I think, you know,

00:29:53.280 | we were trying to take like a StockX approach to it.

00:29:55.920 | And the fact that, you know,

00:29:57.520 | StockX would promote releases prior to when they come out

00:30:01.320 | ended up working quite well.

00:30:02.720 | I mean, you know, kind of on par with eBay sales

00:30:05.960 | and, you know, hopefully trying to continue that.

00:30:08.040 | So I think just having more outlets is also good.

00:30:11.920 | - So what you've done with Pure, my experience,

00:30:15.480 | I don't hold any shares, I have no equity here.

00:30:18.120 | But you started basically, as I would describe it,

00:30:22.280 | as a marketplace for buying and selling gold

00:30:24.600 | that operates a bit more like an investment marketplace

00:30:26.920 | where there's a bid and an ask,

00:30:28.680 | and you can see the order book.

00:30:30.200 | But if I remember right, I could actually see,

00:30:33.760 | I could actually sell my flowing hair coin

00:30:36.880 | before I even got it.

00:30:38.080 | - Yeah, so when we originally started Pure,

00:30:41.600 | we were actually trying to tackle this like mint problem,

00:30:45.040 | just 'cause we had bought and sold a lot of coins

00:30:47.000 | on the mint prior.

00:30:48.160 | And there really isn't a lot of liquidity.

00:30:50.000 | Like, you know, without Pure as it exists right now,

00:30:53.400 | like you could go on eBay and sell it,

00:30:55.280 | but then, you know, there's obviously complications

00:30:57.960 | with like what you're gonna do on eBay

00:30:59.800 | and a lot of people do well there.

00:31:02.600 | But we kind of started listing the Costco SKUs

00:31:07.600 | as like a ha-ha funny sort of thing,

00:31:10.800 | and it ended up working like quite well,

00:31:13.480 | because, you know, obviously people need liquidity

00:31:16.000 | for specific bars.

00:31:17.420 | And I think the other thing was that

00:31:20.480 | we were able to tackle the premium problem really well,

00:31:23.080 | 'cause most people would just define

00:31:25.200 | the gold bars as just generic.

00:31:27.120 | But, you know, the difference between a Fortuna and a Koi

00:31:29.440 | is actually, you know, like 15, 20 bucks.

00:31:32.760 | And I think that kind of makes a difference

00:31:34.280 | to a lot of people,

00:31:35.360 | considering that spot premium is like, you know,

00:31:38.520 | literally that.

00:31:39.760 | So, yeah, and then we had kind of gotten back

00:31:43.760 | to our original roots

00:31:44.980 | when we started doing the flowing hair coin.

00:31:48.060 | And it was really cool to see how the market opened

00:31:52.680 | and we kind of just let people trade from the beginning.

00:31:56.440 | And obviously like some people canceled,

00:31:59.480 | so like on the back end of things,

00:32:02.000 | like we had a couple coins live

00:32:04.200 | to be able to make sure buyers were whole,

00:32:06.120 | just so we could like play around with the market.

00:32:08.460 | But generally most people are, you know,

00:32:10.700 | pretty nice and like happen to, you know,

00:32:14.000 | follow through on their things.

00:32:15.400 | I obviously think, you know, our onboarding

00:32:18.480 | like kind of makes people like,

00:32:20.280 | "Hey, I need to be able to fulfill this."

00:32:22.760 | But yeah, we just kind of let people trade

00:32:26.000 | as they would on it.

00:32:27.720 | And just to see how it would go.

00:32:29.800 | I know a lot of people started like pre-selling.

00:32:32.640 | And so we didn't allow any pre-sales,

00:32:35.080 | but right after the release,

00:32:36.720 | if you had a confirmed order,

00:32:38.080 | we were like, "Hey, like that's fine."

00:32:40.480 | So some people got canceled,

00:32:41.960 | but you know, we made the buyers whole, so.

00:32:44.600 | - Yeah.

00:32:45.520 | And when it comes to Costco, since you mentioned it,

00:32:49.200 | this is kind of where I got into this a little bit.

00:32:53.080 | You basically, Costco is selling gold bars at checkout,

00:32:57.680 | more so on certain days of the week than others.

00:33:00.520 | And there's a pretty active market for selling them.

00:33:03.200 | So if you walk into a Costco, you could buy a gold bar

00:33:05.640 | and you could probably go on Pure and sell it

00:33:08.240 | before you even get to your car.

00:33:09.720 | - Yeah, there is quite a lot of liquidity for Costco items.

00:33:13.960 | I think to the fact that Costco may be selling more

00:33:18.480 | than they originally anticipated.

00:33:20.080 | So they've in turn kind of created this like after market

00:33:24.040 | where people want to buy these bars

00:33:26.840 | and whether that be at Costco or not at Costco,

00:33:30.120 | people need them for different, I don't know,

00:33:33.320 | different sales activities or investment activities.

00:33:36.780 | So they've really kind of put gold in this like mainstream.

00:33:40.320 | I think, obviously a lot of news outlets have covered this,

00:33:43.240 | like Costco gold is selling out in like 10 seconds.

00:33:47.040 | But generally, you could just walk into a Costco,

00:33:51.520 | I think they have like a product limit or something.

00:33:53.920 | So you can't go in and buy like all of them,

00:33:55.880 | but you could get like five.

00:33:57.440 | And the prices are quite good.

00:33:59.960 | Like I'm pretty sure they're selling them at a loss.

00:34:02.520 | Like, we get the pretty similar distribution from HAMP

00:34:07.520 | and the cost per bar is like quite high.

00:34:11.880 | So I'm sure that, obviously they have like

00:34:14.160 | whatever special deal that they're running,

00:34:15.840 | but it seems like it's like another like chicken baker,

00:34:20.520 | like hotdog situation.

00:34:22.960 | But instead it's like a $2,800 gold bar

00:34:26.320 | that they're able to push.

00:34:28.040 | But I think generally for like our community,

00:34:31.960 | it's been quite good 'cause prior to this,

00:34:36.200 | you would have like shady investment quote unquote,

00:34:41.200 | gold firms call you up and be like,

00:34:43.320 | "Hey, do you wanna liquidate your retirement account

00:34:46.560 | "into this?"

00:34:47.400 | And people are like, "Oh, that's horrible."

00:34:49.320 | So I think Costco created a really good entry market

00:34:53.560 | for people who are curious.

00:34:56.280 | And it's a familiar storm.

00:34:57.960 | - And I think if you look at the price

00:35:00.200 | you're gonna pay in Costco,

00:35:01.760 | and you look at the price you can sell on Pure,

00:35:03.960 | and this is something I've been monitoring closely.

00:35:06.640 | Just to be clear, if you go buy your Costco gold bar

00:35:12.560 | with U.S. dollar cash,

00:35:14.560 | you're not putting it on a credit card,

00:35:16.000 | you're not a Costco executive rewards member

00:35:18.200 | getting 2% back.

00:35:19.680 | You're just looking at what's the retail price

00:35:21.640 | for Costco gold,

00:35:22.880 | which in most states is not subject to sales tax.

00:35:27.200 | And then you look at the Pure price

00:35:28.360 | that you can sell it at and let's net out the fee.

00:35:31.560 | You guys charge a fee that's very reasonable,

00:35:33.640 | I think for a Costco gold bar, it's like 0.75%.

00:35:38.120 | And if you did a lot of volume, it would come down.

00:35:40.400 | And you're not gonna make money on most days.

00:35:44.640 | But Costco's executive rewards program,

00:35:48.120 | if you have the $130 membership

00:35:50.440 | instead of the $65 membership,

00:35:52.200 | you get 2% back on all your spending at Costco.

00:35:55.640 | And from watching the prices the last, I don't know,

00:35:58.960 | month or two, just personally,

00:36:01.160 | the Delta is usually within that 2% band.

00:36:04.600 | And so if you buy a gold bar at Costco

00:36:07.120 | and you turned around and sold it right away,

00:36:09.560 | that 2% Costco executive rewards

00:36:11.920 | that you pay $130 a year for,

00:36:14.320 | will close the gap on any amount

00:36:17.040 | that you might lose selling it.

00:36:18.800 | And then added bonus,

00:36:20.600 | Costco will let you pay with cash,

00:36:22.160 | with a debit card or a credit card.

00:36:23.880 | And so you get those rewards as well.

00:36:25.760 | But I think if you just forget the credit card rewards

00:36:28.680 | for a second, there's actually a profitable

00:36:30.560 | buying and selling gold.

00:36:31.680 | And then the credit card rewards would be a bonus.

00:36:33.480 | - Yeah, I think we've created a lot of tools

00:36:36.880 | like in our passing time to be able to kind of help people

00:36:41.400 | understand like where the price point lies

00:36:43.800 | compared to like what the active market is.

00:36:46.520 | And, you know, there are opportunities

00:36:48.560 | where it's just like mispriced, you know,

00:36:51.720 | like you go in and it's like $100 below where it should be.

00:36:55.640 | - And that's the case with these gold buffalos.

00:36:58.040 | - Yeah.

00:36:58.880 | - When I was looking on Costco's website,

00:37:01.880 | I joined a couple slacks then discords

00:37:04.360 | where there were Costco gold notifications

00:37:06.400 | and one popped up and said, "These buffalos are available."

00:37:08.680 | And I went in and I went and ordered five of them.

00:37:11.240 | And then I looked at Pure at the same time.

00:37:13.520 | And I was like, the price I paid at Costco was less

00:37:16.200 | than the price I could sell them for in a moment.

00:37:18.480 | Not factoring in executive rewards,

00:37:20.320 | not factoring in credit card rewards,

00:37:22.280 | I actually made money buying this coin from Costco

00:37:25.160 | and selling it.

00:37:26.000 | - Yeah, and I think it's kind of created a drop ability

00:37:29.880 | like to these releases, like people are kind of,

00:37:32.800 | you know, waiting and waiting for restocks.

00:37:35.200 | And it just reminds me of like,

00:37:37.120 | kind of like the sneaker era of like all the stuff

00:37:40.080 | where people were buying Yeezys and things like that.

00:37:42.480 | So I think it's kind of cool to see that that's came alive

00:37:47.120 | in like a different market.

00:37:49.200 | And obviously, you know, I mean,

00:37:51.480 | Costco makes a lot of money in other sectors.

00:37:54.120 | And I think that their kind of play,

00:37:56.320 | like obviously I don't know this for a fact,

00:37:58.240 | but their play is just, you know, volume,

00:38:00.360 | like how much can they sell?

00:38:01.600 | Being able to do like hundreds of millions

00:38:04.760 | worth of gold a month.

00:38:06.200 | Like they've got to be like, you know,

00:38:08.960 | top three in the industry now

00:38:12.200 | for how much sales they're doing.

00:38:13.760 | Like it's quite a lot.

00:38:15.120 | And they've kind of came onto the scene

00:38:17.160 | in a different and larger way than most other people.

00:38:21.520 | But there are some people kind of breaking into Walmart now.

00:38:23.920 | So that's good.

00:38:24.760 | - Yeah, I have seen that Walmart also sells gold,

00:38:26.520 | but not as competitive as a price as Costco.

00:38:28.800 | - Definitely not as competitive,

00:38:30.400 | but Walmart's model is a little more different

00:38:33.640 | than Costco's model.

00:38:35.320 | Obviously Walmart doesn't sell gold in store

00:38:37.720 | and Walmart's more of like, you know,

00:38:39.440 | online marketplace than anything.

00:38:41.760 | Taking cards on gold is like an incredibly risky area.

00:38:45.720 | You know, you have one person charge back

00:38:47.440 | and it's like a whole nightmare.

00:38:49.560 | So I think, you know, from our perspective,

00:38:51.600 | like we tend to stay away from that area

00:38:55.760 | 'cause a lot of people have asked us,

00:38:57.120 | why don't you just open Pure to add cards?

00:39:00.320 | And I'm just like,

00:39:01.600 | I don't wanna deal with that headache right now.

00:39:04.000 | But, you know, in larger scale like Costco, Walmart,

00:39:07.640 | like they kind of have that figured out already.

00:39:10.240 | And so they're able to kind of offer that,

00:39:12.720 | like, you know, rewards to having it.

00:39:14.840 | - And I haven't looked into this,

00:39:15.760 | but I wanna do another episode on gift card reselling,

00:39:19.600 | because I actually think there's an interesting market there

00:39:22.520 | to similarly buy gift cards that are on sale at a discount.

00:39:26.640 | And then, you know, there are places to resell them online.

00:39:29.400 | And that can also be a profitable business.

00:39:32.480 | But I often see Walmart gift cards at a pretty big discount.

00:39:37.080 | And by pretty big, I mean like 10, 12, 15%.

00:39:40.160 | And now it has me thinking,

00:39:41.240 | well, if you can buy Walmart gift cards at 15% off

00:39:44.000 | and use them to buy gold, could you get a discount on gold?

00:39:46.960 | - I think that's the loop.

00:39:48.160 | If I were to, you know,

00:39:50.040 | place a bet on why people would be buying gold at Walmart,

00:39:53.440 | I would say that that's the reason why, so.

00:39:55.360 | - Yeah, and just to be clear,

00:39:57.840 | some of these things might sound

00:39:59.320 | like it's all about credit cards,

00:40:01.140 | but buying a lot of these discounted gift cards at scale

00:40:04.920 | is actually something where you have to pay a fee

00:40:07.980 | to use a credit card.

00:40:08.820 | So when I look at a lot of these things,

00:40:10.640 | this is not a credit card points play

00:40:12.760 | for buying Walmart gift cards.

00:40:15.600 | It's actually a discounted gift card and gold price play

00:40:20.400 | that's independent of credit card rewards.

00:40:22.500 | That said, you know, I think for some people,

00:40:24.680 | the credit card rewards would be a compelling thing,

00:40:27.180 | but I actually view both gift cards and gold,

00:40:32.180 | and potentially some buying group stuff

00:40:34.280 | that I won't even get to now,

00:40:35.680 | as opportunities to find mispriced items

00:40:38.600 | at programs where either their currency,

00:40:41.720 | i.e. gift card is sold at a discount,

00:40:43.960 | or their membership includes a 2% discount,

00:40:47.520 | which full disclosure for everyone,

00:40:49.200 | is capped at $62,500 a year.

00:40:52.700 | So, you know, you can't go spend a million dollars on gold.

00:40:55.440 | - They figured out their loss for it.

00:40:56.880 | - Yeah, yeah, they have.

00:40:58.140 | One thing for people who are, maybe go to Costco,

00:41:00.900 | maybe pick up a few bars and wanna sell them,

00:41:03.140 | and go to Pure, help alleviate some concern they might have

00:41:07.440 | with what happens next,

00:41:09.220 | because presumably they've spent a ton of money, right?

00:41:12.420 | If you bought five bars, you're over 10 grand,

00:41:14.860 | and you're probably gonna say,

00:41:15.860 | "Here's a mailing label, can you send it in the mail?"

00:41:18.740 | How do people think about that aspect?

00:41:20.220 | - I think the biggest thing that we've been able to do

00:41:23.020 | is obviously everything's open under camera,

00:41:25.600 | so we'll have reports of everything as it comes in.

00:41:28.520 | We keep allocated storage of people's orders,

00:41:33.480 | which I think is another big thing.

00:41:35.480 | People always ask if a package was tampered or lost,

00:41:40.160 | is it insured?

00:41:41.480 | And we have insurance on all packages.

00:41:44.760 | We're using overnight or express mail

00:41:47.720 | to be able to make sure it's all good.

00:41:50.120 | I think a lot of people could probably take a packing lesson,

00:41:55.120 | so we may produce some videos on that,

00:41:58.300 | and be able to say this is the way

00:42:00.940 | to properly pack your items,

00:42:03.420 | 'cause I think most people think about Amazon returns

00:42:06.300 | as their only other comparison

00:42:08.260 | to when they actually go out to ship stuff,

00:42:10.740 | and sending $13,000 in an Amazon box,

00:42:15.420 | or a Chewy box, or some Huggies diaper box

00:42:19.920 | is probably a bad idea.

00:42:21.320 | Every now and then, there'll be some strange stuff,

00:42:25.320 | so I think we've gotten down that route

00:42:27.680 | of how scary can someone package

00:42:31.000 | their really expensive items?

00:42:32.920 | But I think one thing is being able to lock

00:42:37.280 | the price of the item.

00:42:40.840 | I think that's a big win for the service that we offer,

00:42:45.400 | is being able to give you the peace of mind

00:42:47.440 | that when you actually sell those items,

00:42:49.660 | that price is frozen.

00:42:51.060 | I think sometimes people get confused.

00:42:55.060 | If it goes down, then they are making money,

00:42:57.940 | but either a positive or negative loss,

00:43:01.260 | you're kind of on the hook if you don't fulfill those items.

00:43:05.140 | - Does that mean that, let's say I sold my flowing hair coin

00:43:08.940 | at $4,200, and two days later,

00:43:12.660 | before I even shipped it out, or maybe a day later,

00:43:14.860 | it's at $4,300, and I cancel.

00:43:16.740 | Am I on the hook for that spread?

00:43:18.040 | - Yeah, you would be on the hook for the spread

00:43:19.660 | at that point, because there's a buyer on the other end,

00:43:22.980 | we have to make sure that buyer's whole.

00:43:24.980 | So we would call that the market loss.

00:43:27.400 | So if you sell your flowing hair,

00:43:29.380 | and it goes up to $10,000, and you decide to cancel,

00:43:31.940 | yeah, that spread's gonna be quite large.

00:43:36.620 | Obviously, we kind of determine fair market value

00:43:41.780 | on a fair spread.

00:43:43.340 | We're not gonna just pump the prices up

00:43:46.180 | to make it look like there's a larger market loss.

00:43:49.040 | But yeah, generally, I think the biggest concerns

00:43:52.900 | come with shipping, receipt, and payment.

00:43:55.860 | And I think one thing that we're trying not to be able to do

00:44:00.140 | is be people's bank.

00:44:02.340 | That's something that I think Pure

00:44:03.900 | is trying to actively avoid.

00:44:05.660 | I think some people are trying to use Pure

00:44:08.060 | as a way to cash in gold in large quantity

00:44:13.300 | to be able to turn credit card points.

00:44:15.940 | Obviously, some people do high volume,

00:44:18.980 | but we kind of moderate accounts as they go.

00:44:22.800 | So if you're selling here and there, it's a good activity,

00:44:27.500 | but we keep a lot of close eyes on how people's activity

00:44:32.500 | are trading over time, how do they have a business set up.

00:44:37.500 | At the end of the year, what coins have they sold?

00:44:40.300 | Are those coins falling under 1099s?

00:44:42.740 | There's a lot of different aspects

00:44:43.860 | that go on behind the scenes.

00:44:45.240 | So I think, obviously, people should be aware

00:44:48.260 | of all of these when they're buying them

00:44:50.020 | and kind of understand all the different

00:44:53.260 | tax implications that have it.

00:44:55.100 | Call your CPA, make sure that what you're doing is fine.

00:44:59.040 | If you're selling it for a loss,

00:45:00.260 | make sure you're taking that loss at the end of the year

00:45:03.460 | to be able to write it off.

00:45:06.620 | So there's a lot of different things

00:45:07.740 | that you should probably consider

00:45:08.980 | before entering this market.

00:45:11.980 | - And then, obviously, there's definitely a lot

00:45:14.260 | of money laundering and fraud risk within the gold market.

00:45:18.900 | And so, from our perspective, we treat everyone

00:45:23.220 | as if we give them the blank slate to begin with.

00:45:28.140 | You go through identity, you go through a bank account check,

00:45:30.780 | and if you don't pass that, then too bad.

00:45:34.220 | We're not gonna be able to take them as a customer.

00:45:36.900 | - Yeah, I've seen everything from a guy on WhatsApp

00:45:42.180 | that you can message and sell gold to that says,

00:45:46.300 | "I don't do 1099s, I don't do ID verification,"

00:45:49.020 | to a reputable person who runs a company

00:45:52.180 | but maybe doesn't have as big of an operation as you

00:45:55.380 | and maybe does do an ID check but might not do 1099s,

00:45:59.420 | all the way to you are trying to do this

00:46:01.020 | as by-the-book as possible.

00:46:02.860 | So I think there are a lot of options out there.

00:46:05.900 | If I could just hand these to you, I would.

00:46:07.220 | I'd save me some shipping, but I'm gonna ship 'em off

00:46:09.260 | 'cause I want the experience of packing them up

00:46:11.880 | and shipping them off.

00:46:12.720 | But there are all the degrees of places

00:46:16.280 | that you can buy and sell from,

00:46:17.780 | and everyone has to choose what's right for them.

00:46:19.780 | But I did an episode on taxes with a woman

00:46:23.860 | who after that episode released as a follow-up a video

00:46:27.480 | about the taxation of credit card rewards and stuff.

00:46:30.340 | And I'm trying to do things legally.

00:46:33.220 | I'm not trying to skirt any corners.

00:46:35.220 | I'm trying to do all the things correctly.

00:46:36.940 | And so the fact that you guys are trying to do

00:46:39.260 | as much of that as possible feels like a good place for me.

00:46:43.080 | - Yeah.

00:46:43.920 | - Might not be a good place for everyone else,

00:46:45.080 | but I like to do things by the book.

00:46:47.120 | - Yeah, and I think we're still figuring out

00:46:49.200 | a lot of the logistics of how to handle

00:46:52.360 | a lot of operations as well as the financial operations

00:46:56.320 | and stuff.

00:46:57.760 | I mean, our company is a little bit over a year old,

00:47:01.320 | and we've been working on our own playbook, I guess,

00:47:05.900 | for this market because no one has really experienced

00:47:10.520 | the growth that we've had in this short amount of time.

00:47:13.460 | And obviously this has been propelled by Costco.

00:47:16.520 | We just built out a new vault.

00:47:18.200 | There's another whole aspect to the operations side

00:47:21.360 | of things.

00:47:22.200 | And so the biggest thing for me is I like to be able

00:47:25.800 | to slow things down, go through them methodically,

00:47:29.160 | understand how to do everything in the right way.

00:47:32.560 | And we err on the side of precaution.

00:47:35.860 | So if there's an issue with a bank account

00:47:40.180 | getting disconnected, we're gonna reach out to that person.

00:47:43.060 | If there's an issue with something getting tampered,

00:47:45.820 | we're gonna reach out to that person,

00:47:48.140 | and we're gonna provide as much information as we can.

00:47:50.280 | So we understand the perspective

00:47:53.340 | of what people are trying to do.

00:47:55.380 | But generally, the Costco segment of customers

00:48:01.020 | is like one part of our business,

00:48:03.260 | and we're happy to serve those.

00:48:05.740 | But we also have a whole other side of the coin people,

00:48:09.100 | the dealers, the shops, and all this other stuff.

00:48:11.900 | And the way that the two sectors do business

00:48:14.860 | is very, very different.

00:48:16.300 | The expectations are much different.

00:48:19.820 | The ability to reconcile transactions is much different.

00:48:24.820 | So I think being able to cater to both markets

00:48:28.120 | is something that we're learning to be able to do.

00:48:31.960 | But yeah, I have to keep my mind in two different areas

00:48:36.200 | when talking to different types of customers.

00:48:38.320 | - Let's jump to the other side.

00:48:39.800 | But first, real quick,

00:48:41.120 | I'll put a link in the show notes to Pure.

00:48:44.600 | Is there anything, if we put that link in,

00:48:46.840 | that someone might get?

00:48:47.840 | - Yeah, so we have a referral program,

00:48:50.960 | so hopefully we can set something up.

00:48:52.800 | - Yeah, so whatever you come up with,

00:48:54.800 | I'll put it in the show notes.

00:48:57.000 | But one of the things that I've been thinking about

00:48:59.580 | is that other side of the market

00:49:01.080 | is people whose family has gold.

00:49:05.920 | Whether those are old coins or even jewelry,

00:49:09.480 | where's the market for that?

00:49:11.520 | And I know that might not be something on the jewelry side

00:49:14.400 | that you guys participate in,

00:49:15.980 | but what advice would you give to someone

00:49:18.000 | who finds out that their grandparents or their parents

00:49:21.920 | have various kinds of gold

00:49:23.360 | and don't wanna get taken advantage of?

00:49:25.160 | - I always tell people that if they're not comfortable

00:49:28.880 | with going somewhere online,

00:49:30.000 | then go to your local coin shop.

00:49:31.640 | And I'm gonna shout out all the local coin shops here

00:49:34.400 | because I'm still a big fan of the in-person business.

00:49:39.400 | I think if you find a collection

00:49:42.080 | or you have a collection that's passed down,

00:49:44.540 | generally, on the off chance

00:49:48.840 | that there's something quite valuable,

00:49:51.160 | a local coin shop could tell you very quickly.

00:49:54.440 | I think the general stance is that

00:49:58.360 | doing research on Google and stuff

00:50:00.600 | is probably gonna lead you in the bad way.

00:50:03.280 | So I think the quickest and easiest search

00:50:06.520 | is just local coin shop.

00:50:09.600 | And then just go to whatever one has the best reviews.

00:50:13.200 | And so if you're able to decipher what items are what,

00:50:18.200 | then I think that Pure is probably a great place to go

00:50:21.160 | because then you can find your items very quickly.

00:50:23.480 | We're happy to help you if you send us photos.

00:50:25.800 | But there's a network of really good coin dealers

00:50:29.440 | and shops out there that are a part of the P&G.

00:50:34.040 | That's essentially the Professional Numismatic Guild,

00:50:36.600 | and they're all very reputable.

00:50:38.920 | They have a coat of honor.

00:50:40.200 | It's very difficult to get in.

00:50:43.080 | It's something that should be very prestigious

00:50:46.120 | to someone who's around that.

00:50:47.640 | And even in the Bay Area, there's multiple P&G dealers.

00:50:52.200 | And most of the shops we work with are on a certain level.

00:50:56.600 | So I'm happy to point someone to a shop

00:51:00.240 | if they're not comfortable with doing online experience.

00:51:04.560 | And I do think there is something tangible

00:51:06.560 | to going in and being able to actually hear someone out

00:51:11.320 | and look at other items and understand the pricing.

00:51:14.160 | I think it's a very good educational experience.

00:51:17.160 | - What about the, I was walking downtown the other day

00:51:19.160 | and I saw this giant We Buy Gold banner.

00:51:21.480 | Is that like a thing that should deter people?

00:51:23.840 | - I think that's like the worst possible place to go.

00:51:27.120 | I would compare the We Buy Gold

00:51:28.560 | to like the like check cashing places.

00:51:32.000 | Like, you know, they'll give you your payday

00:51:33.920 | like two weeks in advance.

00:51:35.520 | - Like at like 1,000% interest.

00:51:38.200 | - Yeah, you're gonna get pretty raked going through that.

00:51:43.200 | - So a lot of these coin stores in the P&G group,

00:51:46.040 | you probably can't show up there

00:51:47.240 | with a bunch of gold jewelry, right?

00:51:49.000 | They're dealing in coins.

00:51:50.520 | - I've worked in shops before

00:51:52.120 | and generally most shops also act as a jewelry shop

00:51:55.360 | and they probably have a pawnbroker license

00:51:57.600 | and they will buy scrap gold.

00:51:59.360 | But I think people expect a lot out of scrap gold.

00:52:02.240 | Obviously this isn't something you can sell on pure.

00:52:04.400 | Like we only take like assayed and marked gold.

00:52:07.080 | We're not gonna take jewelry.

00:52:09.160 | There's like way, way too much risk

00:52:11.280 | and like where it's from, what it's going on.

00:52:13.520 | So I think, you know, the protocols in a shop

00:52:15.880 | are probably the best place to go for jewelry.

00:52:20.080 | And generally they're fairly, you know,

00:52:22.680 | pretty good about like being on, you know,

00:52:26.240 | payment and as well as like, you know,

00:52:29.040 | giving you a fair price

00:52:30.600 | and giving you an assay for them and stuff.

00:52:33.120 | So, and they may even pay you more for stones.

00:52:36.440 | You know, like if you have nice like stones

00:52:38.840 | within the jewelry, I think that's also a win.

00:52:41.160 | Like they kind of act as a jewelry store as well.

00:52:44.360 | And that kind of keeps them in business

00:52:46.700 | when the coin industry is not like, you know,

00:52:48.920 | super hot like it is now, so.

00:52:50.960 | - Well, I wouldn't have thought that.

00:52:52.220 | So I'm glad you said it.

00:52:53.520 | I know that there are gonna be some people

00:52:55.560 | over the holidays find out their family

00:52:57.280 | has collections of gold or coins

00:52:59.720 | and with prices the way they've been the last year,

00:53:02.840 | I feel like people are probably gonna wanna figure out

00:53:04.880 | what that's worth.

00:53:05.720 | And so going to a reputable coin shop, great suggestion.

00:53:08.680 | Where online would you send people

00:53:11.160 | to learn more about all of this?

00:53:13.200 | - One of them is PCGS coin facts.

00:53:16.920 | That will basically give you,

00:53:18.840 | it's like a massive database

00:53:20.480 | of every US and world coin possible.

00:53:23.120 | For pricing, I always look at auctions.

00:53:25.480 | So like heritage auctions, Stacks Bowers galleries,

00:53:28.800 | those are kind of the big ones.

00:53:30.360 | And then just for like general information

00:53:34.320 | about how to become a numismatist

00:53:37.280 | is like the ANA is money.org.

00:53:40.600 | And that's kind of an organization

00:53:43.680 | that all numismatists should support at some point.

00:53:47.800 | And like, I'm a lifetime member,

00:53:50.760 | a lot of other people are lifetime members

00:53:52.720 | and there's not a lot of new members coming in,

00:53:56.240 | but I always think that that's good.

00:53:57.560 | And then obviously like, go to a coin show,

00:54:00.680 | go to a local coin shop or go to your local coin club.

00:54:05.080 | Like you'll learn a lot.

00:54:06.440 | It may be boring for some people,

00:54:08.640 | but other people might find it to be very cool.

00:54:11.000 | And you might meet a lot of interesting people

00:54:13.480 | from the bullion sector

00:54:15.400 | that have crossed over into this coin world.

00:54:17.480 | And maybe you'll be able to make money

00:54:19.400 | in the coin world too.

00:54:20.800 | - Do you think like garage sales and estate sales

00:54:23.480 | are places to--

00:54:24.320 | - I think that those have already been fairly picked over.

00:54:27.360 | But I think that generally the best place to find coins

00:54:31.560 | is just a coin show.

00:54:32.600 | - All right, this has been awesome.

00:54:34.200 | Any parting words for someone

00:54:35.880 | trying to get into the gold thing,

00:54:37.040 | things to avoid and common mistakes?

00:54:39.080 | - I would just avoid anyone who says the words

00:54:42.880 | tangible wealth or I hate the word safe haven.

00:54:47.760 | That's like a red flag to me.

00:54:49.840 | If someone calls it a safe haven,

00:54:52.240 | you should probably look the other way.

00:54:54.520 | Anyone who's like fear mongering, like bad idea.

00:54:59.080 | Like you want to be able to figure out

00:55:01.880 | who's being transparent about their activities

00:55:04.960 | and kind of telling you what they're gonna make

00:55:08.040 | as well as you.

00:55:08.880 | So people get taken advantage of a lot.

00:55:10.920 | So just keep your red flags up and just keep it going.

00:55:13.960 | - Perfect.

00:55:14.800 | All right, thank you so much for being here.

00:55:16.560 | And I'll send everyone links, collectpure.com.

00:55:20.160 | - Sweet.

00:55:21.000 | - Awesome.

How the Gold Market Actually Works (2025 Guide)

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