Understanding What is Secondary Market Bullion: A Comprehensive Guide

Whether you're a seasoned investor or new to the precious metals market, understanding the ins and outs of buying and selling on the secondary market is crucial. In this article, we'll explore everything you need to know about secondary market bullion, from what it is to how it can fit into your investment strategy.

What is secondary market bullion?

Secondary market bullion refers to precious metals, such as gold, silver, or platinum, that have been previously owned and are now available for sale by individual investors or dealers. These metals were originally purchased from a primary market, such as a mint or authorised dealer, and have since entered the secondary market due to various reasons, including the owner's desire to liquidate their investment or the sale of estate collections.

When buying secondary market bullion, it's important to understand that the condition of the items may vary. Despite not being 'fresh off the mint,' these products carry the same intrinsic value as primary market bullion. Secondary market bullion can offer unique advantages, including potentially lower premiums and a wider variety of products.

Reasons to Consider Secondary Market Bullion

Investors turn to secondary market bullion for a variety of reasons:

  • Cost Savings: Secondary market bullion often carries lower premiums than new, uncirculated items, making it a more affordable investment option.
  • Rarity and Variety: The secondary market can be a treasure trove of rare and discontinued products, appealing to both collectors and investors alike.
  • Intrinsic Value: No matter how many times it has been traded, the precious metal content of secondary market bullion remains unchanged.

The Value of Secondary Market Bullion

The value of secondary market bullion is fundamentally tied to its precious metal content. Regardless of their condition or age, secondary gold bars and coins, for instance, contain the same amount of gold as when they were first minted. Their value is directly linked to the live spot price of gold on the primary market. The same applies to secondary market silver coins and bars, whose value is anchored to the live spot price of silver.

Benefits of buying secondary market bullion

There are several benefits to consider when buying secondary market bullion. Firstly, purchasing from the secondary market can often result in lower premiums compared to buying directly from a primary market. This is because secondary market bullion is typically sold at a price closer to the metal's intrinsic value, without the additional costs associated with production and distribution.

Secondly, buying on the secondary market provides investors with a wider selection of products. While primary market offerings may be limited to newly minted coins or bars, the secondary market offers a variety of vintage coins, rare pieces, and unique bullion items that may appeal to collectors and enthusiasts.

Additionally, buying secondary market bullion allows investors to acquire larger quantities of precious metals at a more affordable price. This can be particularly advantageous for those looking to diversify their portfolio or accumulate significant amounts of bullion over time.

Differences between primary market and secondary market bullion

Understanding the differences between primary market and secondary market bullion is essential for making informed investment decisions. In the primary market, precious metals are sourced directly from mints or authorised dealers and are sold as newly minted coins or bars. These items come with a guarantee of authenticity, purity, and quality, as well as a higher premium due to production and distribution costs.

On the other hand, secondary market bullion consists of previously owned items that have entered the market through various channels. These pieces may have been in circulation, part of estate collections, or sold by individual investors. While secondary market bullion may come with a lower premium, it's important to carefully evaluate its condition and authenticity before making a purchase.

Trustworthy Dealers of Secondary Market Bullion

When it comes to buying and selling secondary market bullion, trust and reputation are paramount. Jaggards, with its 60 years of industry experience, stands as a trusted dealer in the market. We utilise advanced XRF technology to meticulously test every piece of bullion we buy back, ensuring the highest quality and authenticity.

At Jaggards, we maintain stringent standards when purchasing secondary market bullion. Each item is thoroughly inspected to ensure it is in resale condition. Brand and purity are key considerations in our evaluation process. We prioritise bullion produced by LBMA good delivery brands, with a purity of 99.95% platinum, 99.99% gold, and 99.9% silver and above. Additionally, we carefully assess the condition of each piece, looking for signs of tampering and aiming for near-mint condition with minimal wear such as toning or milk spots. These natural reactions from metal oxidation are acceptable and often add to the appeal for investors.

Our range of offerings includes products from esteemed international mints such as ABC Bullion, Perth Mint, PAMP Suisse, Argor-Heraeus, Royal Mint, among others. These products, available in sizes ranging from 1g to a substantial 5 Kg, boast purity levels of 99.9% and 99.99%, assuring customers of their value and weight.

With over 60 years of continuous operation, Jaggards has built a legacy of trust with its customers in the secondary market. Our commitment to customer service, transparency, and adherence to high-quality standards makes us a reliable choice for investors seeking secondary market bullion.

Pricing and premiums for secondary market bullion

Pricing for secondary market bullion is influenced by various factors, including the metal's spot price, the item's condition, rarity, and demand. Typically, secondary market bullion is priced closer to the metal's intrinsic value, without the additional costs associated with production and distribution that are present in primary market bullion.

The bullion premiums for secondary market bullion are generally lower compared to primary market bullion due to the absence of these additional costs. However, premiums can vary depending on the specific item, its condition, and its desirability among collectors and investors. Rare or vintage coins, for example, may command a higher premium due to their scarcity and historical significance.

However, it's crucial to strike a balance between getting a fair deal and ensuring the authenticity and quality of the bullion you're purchasing.

Storing and protecting your secondary market bullion

Once you've acquired secondary market bullion, it's essential to have a plan for storing and protecting your investment. Precious metals should be stored in a secure and controlled environment to minimise the risk of theft, damage, or loss.

Benefits of Jaggards' Secure Vaulted Storage

No matter the amount, your bullion is worth protecting. At Jaggards, we offer a unique concierge secure storage service when purchasing through us. Let Jaggards manage the entire process from start to finish without you having to worry at all.

Fully Allocated Storage: Jaggards provides fully allocated storage to all accounts. This means that the exact bars, coins, or rounds you purchase are the exact physical products you have allocated to your name and will receive if/when you withdraw.

Concierge Service: We do all the heavy lifting and remove any risk for our clients by moving all metals to and from the secured facility at no risk to you.

Fast & Easy Buy Backs: You can easily resell your stored products to Jaggards at competitive rates. We buy them back instantly and apply no commission fees. We then wire the amount to your bank account.

Our client's goods are securely held in perhaps one of the most secure facilities in Australia. All of our client's precious metals stored with Jaggards are covered by complementary insurance for complete peace of mind.

Is secondary market bullion right for you?

Secondary market bullion can offer unique advantages to both seasoned investors and newcomers to the precious metals market. The ability to buy at potentially lower premiums, access a wider variety of products, and accumulate larger quantities makes secondary market bullion an attractive option for diversifying investment portfolios or acquiring precious metals.

So, whether you're looking to expand your precious metals portfolio or dip your toe into the market for the first time, the world of secondary market bullion offers exciting opportunities.

It’s time to start exploring new opportunities! Visit our current secondary market bullion products here and make sure to follow us on Facebook and Instagram as we post new daily opportunities and showcase our secondary market finds. Feel free to communicate directly with us on social media to secure your secondary bullion!

Secondary Market Bullion FAQs

  1. What is Secondary Market Bullion? Secondary market bullion refers to previously owned or circulated precious metals, such as gold and silver bars, coins, and rounds. These items are often traded or sold by investors and collectors in the open market.
  2. Is Secondary Market Bullion as Valuable as Newly Minted Bullion? Yes, secondary market bullion holds the same intrinsic value as newly minted bullion. The value is primarily based on the weight and purity of the precious metal, regardless of whether it is brand new or previously owned.
  3. Why Should I Consider Purchasing Secondary Market Bullion? Purchasing secondary market bullion can often provide cost savings compared to buying newly minted products. Additionally, it offers the opportunity to acquire unique and rare pieces that may no longer be in production.
  4. What Should I Consider When Buying Secondary Market Bullion? When purchasing secondary market bullion, it's important to consider the condition, authenticity, and reputation of the seller. Look for reputable dealers who provide detailed information about the products they offer.
  5. Are Secondary Market Bullion Products Guaranteed for Purity and Weight? Yes, reputable dealers ensure that the secondary market bullion they sell is tested for purity and weight accuracy. It's essential to buy from trusted dealers who assure the product's authenticity and quality.
  6. What Are the Advantages of Selling Secondary Market Bullion? Sellers of secondary market bullion can benefit from potential appreciation in value, especially for rare or sought-after pieces. Additionally, selling secondary market bullion can offer liquidity and a quick way to convert the investment into cash.
  7. Can I Include Secondary Market Bullion in an SMSF Account? Yes, secondary market bullion can be included in a Precious Metals SMSF account.
  8. What is the Potential for Secondary Market Bullion to Appreciate in Value? Like any investment, the potential for appreciation in value of secondary market bullion is subject to market conditions, rarity, and demand. Certain rare or historic pieces may appreciate significantly over time.
  9. How does the spot price of silver affect bullion prices? The price of silver bullion, including bars, rounds, and coins, is directly influenced by the spot price of silver, which is subject to change based on the interplay of supply and demand. This dynamic pricing ensures that the value of silver assets is always aligned with the latest market conditions.
  10. Why is silver considered more affordable than gold? With $200, one can acquire over 4 ounces of silver, providing a more accessible entry point into precious metals investment compared to gold, where the same amount would yield just over 1 gram. This affordability makes silver an attractive option for both novice and seasoned investors looking to diversify their portfolios.