Is it possible to buy gold from African countries for way cheap price?
Quote from chief_editor on September 14, 2023, 7:33 amAs an import/export broker, the term 'way cheap' in the context of purchasing gold typically refers to a discount on the spot price. While it is possible to negotiate a 3-5% discount on the spot price, this is not typically feasible for smaller quantities, such as 1-2 kilograms, which is the range most average buyers would consider. In the gold trade, transactions often start at a minimum of 25 kilograms, with an average of around 50 kilograms. It's essential to understand that acquiring gold at significantly lower prices often involves dealing with substantial quantities.
To put things in perspective, the absolute cheapest way to obtain gold is to source it directly from mines in Africa, where prices can be as low as $24 per gram. However, this approach carries significant security risks, which necessitate the involvement of brokers. The costs can add up quickly, with brokers typically charging around $6 per gram. Taxes and additional brokerage fees can further inflate the price by approximately $10 per gram. By the time the gold reaches Europe or North America, where most buyers are located, it can cost around $48-$51 per gram when purchased in bulk.
It's crucial to note that these prices apply to dore bars, not bullion. If you refine the dore bars, you can expect a final cost of around $53-$55,000 per kilogram of refined gold, resulting in a profit margin of $2-$5,000 per kilogram when selling locally in North America or Europe.
In essence, obtaining gold at a genuinely 'cheap' price is a challenge, and the costs are reflective of the inherent risks involved in the gold trade. If security is not a concern, purchasing directly from African mines may seem cost-effective at $24 per gram, but it comes at a much higher personal cost in terms of safety and logistics.
As an import/export broker, the term 'way cheap' in the context of purchasing gold typically refers to a discount on the spot price. While it is possible to negotiate a 3-5% discount on the spot price, this is not typically feasible for smaller quantities, such as 1-2 kilograms, which is the range most average buyers would consider. In the gold trade, transactions often start at a minimum of 25 kilograms, with an average of around 50 kilograms. It's essential to understand that acquiring gold at significantly lower prices often involves dealing with substantial quantities.
To put things in perspective, the absolute cheapest way to obtain gold is to source it directly from mines in Africa, where prices can be as low as $24 per gram. However, this approach carries significant security risks, which necessitate the involvement of brokers. The costs can add up quickly, with brokers typically charging around $6 per gram. Taxes and additional brokerage fees can further inflate the price by approximately $10 per gram. By the time the gold reaches Europe or North America, where most buyers are located, it can cost around $48-$51 per gram when purchased in bulk.
It's crucial to note that these prices apply to dore bars, not bullion. If you refine the dore bars, you can expect a final cost of around $53-$55,000 per kilogram of refined gold, resulting in a profit margin of $2-$5,000 per kilogram when selling locally in North America or Europe.
In essence, obtaining gold at a genuinely 'cheap' price is a challenge, and the costs are reflective of the inherent risks involved in the gold trade. If security is not a concern, purchasing directly from African mines may seem cost-effective at $24 per gram, but it comes at a much higher personal cost in terms of safety and logistics.