When you are making any investment – in gold, silver, platinum, or anything else – will you be able to sell it? And will you be able to sell it for the most money possible?

Your ability to sell an investment and to sell it for a good price is defined as liquidity. 

Here are two stories that show that liquidity is a more critical consideration than you might realize. 

• John had bought an old MGA – a nice British sports car that he “should” have been able to sell for $18,000. That’s what similar cars in similar condition were selling for. But John was also in a hurry to raise money because his son was starting college and John needed funds. So John ended up accepting an offer for only $12,000 for the car from a ready buyer. 

• Marjorie had invested in a nice American painting. Similar paintings by the same artist had sold in auctions for more than $20,000, but when she wanted to sell it, she accepted an offer for only $10,000 after waiting for months for someone to make an offer for it. 

• Peter had invested in some gold and silver bullion bars that were worth $8,000 at current trading prices. But when he tried to sell them, the most anyone would offer for them was $6,000. He decided not to sell, but to wait until people were willing to pay more. 

Fair Market Value

“Fair Market Value” is defined as the price that someone is willing to pay for what you have. Another part of the definition of it is that the seller is not under pressure to sell. In an ideal situation, something will be sold for Fair Market Value when a sincere buyer is willing to pay the current market price from a seller who is under no excessive pressure to sell. 

So we see that John, in the example above, was not able to sell his MGA for what could be defined as a fair market price. The same was true for Marjorie, who had some need to sell her painting. 

Appraised Value and Comparable Prices

But that estimate is theoretical. It assumes that you will be able to find a buyer who is willing to pay that price. If you cannot find a buyer like that, you will probably have to sell your Reed & Barton for less. You will have to sell it for “what the market will bear,” which is another way of saying fair market value. And fair market value can fluctuate according to many factors. If many similar items are available now, that could drive down the price you can get. Recent sales of similar items will affect the prices you can get too. If something like what you are selling just sold for a low price at an auction, for example, you (like Peter in the example above) might have to wait until prices rise.

What This Means for Precious Metal Investors

• Don’t assume that you will be able to sell your investments for a top price. Just because that gold ring has been appraised for a certain sum doesn’t mean you can sell it for that price on the open market.

• Question the value that sellers place on what you are buying. Just because a seller wants you to pay a certain price for anything does not mean you can then sell it for the same price. 

• Do your own research and determine what any investment is worth. Recent auction sales are one handy tool that you can review to get a closer idea of fair market value.

Which Precious Metal Investments Have the Best Liquidity?

In other words, which investments are you most likely to be able to sell at all, and for the highest prices?

Here at Specialty Metals Smelters and Refiners, we are very big believers in investing in gold, silver, and platinum scrap, for two reasons:

• You can quickly and conveniently liquidate your holdings in scrap. When you are ready to sell, call Specialty at 800-426-2344, and in most cases, you can process your scrap quickly and get paid for it. There is no need to put your items in an auction and wait for a buyer to appear.

• You can liquidate your scrap holdings for current trading prices. There is nothing subjective about it. There is no buyer out there waiting to lowball you and pay deflated prices for what you have to sell. 

Which Forms of Precious Metal Scrap Are Best to Invest In?

Simple answer! Just invest an hour reading the posts we have made over the years on this blog. You will find a wealth of information about gold scrap, silver scrap, and platinum scrap in their many forms. 

Precious Metal Scrap Is Your Better Investment

Call Specialty Metals Smelters and Refiners at 800-426-2344 to learn more. 

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