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Gold and Silver Auction: Buying at a Steep Discount

Updated on December 17, 2011
Today's winner
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Having Fun and Saving Money

I have found a new way to buy gold and silver at a deep discount. It is an auction site called Commodity Auction. This is an interesting and unique way to buy gold and silver at a steep discount. The picture in this HUB is actually one of today's winners. I placed some bids on this, but did not win. As you can see a Gold Australian Rabbit that is 1/20 of an ounce of gold sold for $3.87. The value of this coin is approximately $85.

Before you question how in the world or why in the world would someone sell gold for this cheap you have to understand the nature of the auction, which I will explain in this HUB.

How the Auction Works

Several items of gold and silver are placed on this site for a bid. This is apparently a gold/silver dealer placing these items for sale as you cannot place your items for sale. You can only buy from this site.

You first register which opens a free account for you. Then you purchase bid tokens. They come in different size bundles, but each bid cost .75 cents. Every time someone bids on an item some time is added to the clock giving others more time to outbid you. Each bid is costing you .75 cents so strategy comes into play with this site.

Once you are the winner you pay the amount, $3.87 in the case of the picture I posted, plus shipping fees. You are now the owner of the gold or silver that you have purchased.

How Can They Sell For This Cheap?

Don't be confused by the $3.87 price that the gold coin sold for. In essence there were 516 bids for this item. Each bid cost .75 cents. Therefore the dealer made somewhere around $387 for an $85 coin. But how much do you pay? It really depends on how many times you bid.

Is this a successful business model? I would say absolutely. From the owner of the site's standpoint they are able to sell their gold/silver at a premium over the spot price. But from a person who is disciplined they can buy at a cheap bargain.

The Strategy

Realizing that it is going to cost you .75 cents every time you bid, it would seem to make sense to me to wait until the final run-up of the price is made. This would be within the last few minutes of the trade.

Let's say you are willing to make 20 bids to win this item. This would cost you $15 in bids + the $3.87 for a total cost of $18.87 (plus shipping). You are still buying this item at a 77% discount from the spot price. For a person who is disciplined you can acquire a substantial amount of metal at a great price.

Click here to be taken to the site: Commodity Auction

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