Reviewed by Isaac Kahan, Owner ·
By Isaac Kahan, Owner, Bullion Trading LLC
Gold can double and investors still lose money when they paid far more than the metal was worth on the day they bought. Gold’s London price averaged about $1,940 an ounce in 2023 and first passed $4,000 on October 8, 2025, according to the gold price history we keep. That is a doubling, and a buyer who paid a big enough premium going in, then sold back to a dealer below spot, could still come out behind. I’ve seen it happen at my counter.
| Key fact | Figure |
|---|---|
| Gold, 2023 average (London price) | About $1,940 an ounce |
| Gold first above $4,000 | October 8, 2025 |
| Hypothetical round trip, 100% premium | -$120 (-3%) on $4,000 paid |
| Same doubling, 3% premium | +$1,820 (+88%) on $2,060 paid |
| Typical premium on 1 oz gold coins, November 7, 2026 | 2.0% over the Ask |
| Gold IRA fees, four custodians, $50,000 account | $215 to $610 a year |
| Rosland Capital | Chapter 11 filed July 2, 2026; plan of liquidation dated October 28, 2026 |
I’ve spent years buying and selling precious metals in New York, and one customer has stayed with me. He was a very nice gentleman who needed to sell metals held through a precious-metals IRA because he urgently needed money. I first warned him that taking a distribution could create taxes and, depending on his age and circumstances, an early-withdrawal penalty. Then he showed me his purchase invoices.
The invoices didn’t clearly show how his purchase prices compared with the price of the metal. So we worked backward: we looked up the spot price on each purchase date, then compared what he had paid with what he could get by selling. Metal prices had risen a great deal, and he had still lost money: in the end he received less than he had originally paid, before storage and account fees were even counted. I no longer have his invoices, so I can’t give you his numbers, and the examples below are not his purchases. I suggested he ask his original seller for a buyback quote. His reaction suggested he already had. I wasn’t trying to embarrass him; I felt terrible for him. He came back several times, selling the same original investment a little at a time.
The lesson I took from him: the price of gold and the return on your gold purchase are two different numbers.
Video transcript
I want to show you something. This is a one-and-a-half-ounce silver coin from the Solomon Islands, made by PAMP. It’s a real silver coin, but here’s what many buyers do not realize. Just because a coin is unusual or beautifully made, that doesn’t mean you’ll recover the premium you paid for it when you sell.
I remember a gentleman who came to my office needing to sell precious metals from his IRA. He showed me his original invoices. When I compared what he had paid with the metal prices at the time, it was heartbreaking. The market had gone up substantially, but his investments had not performed the way he expected.
Here’s the lesson. The value of the metal and the price you pay for a particular item are two different things. If you pay a huge premium up front, gold or silver can rise dramatically and you can still lose money when you sell, especially after buyback spreads and IRA fees.
Before you buy any precious metal, ask the dealer two questions. How much am I paying over spot? And what would you pay to buy this item back? Because buying the right metal at the wrong price can still be a bad investment.
How can gold double and you still lose money?
An investor can still lose money on a doubling when the premium paid going in, plus the dealer’s discount on the way out, is bigger than the gain. The example here is hypothetical and does not represent that customer’s transaction. Say spot gold is $2,000 an ounce, and a buyer pays $4,000 for a one-ounce product: a 100% premium. Gold then doubles to $4,000. A dealer paying 3% below spot offers $3,880. Gold has doubled, and the buyer has lost $120 before custody, insurance or transaction costs.
A premium that high is not typical for ordinary bullion; I chose it to make the arithmetic plain. Run the same hypothetical doubling for a buyer who paid 3% over spot, $2,060, and the $3,880 sale is a gain of $1,820, or 88%. The 3% below spot is a hypothetical buyback rate for this example: it is not our rate, and it is not a guaranteed one. Our buy prices for gold coins are posted every day on our gold buy list, and on November 7, 2026 our premiums page showed a typical 2.0% over the Ask for one-ounce gold coins. Buy prices differ by product and change through the day.
Ask for two numbers before you buy anything: the all-in price, and the dealer’s buyback price for that same product today. How far spot has to rise before that buyback price reaches what you paid is your break-even.
Why specialty coins are hard to value
A specialty coin’s resale price depends on what buyers will pay for it, not on its design, its issuing government or the name of the mint. Among that customer’s holdings were unusual 1.5-ounce silver Lady Liberty coins, made by PAMP and issued by the Solomon Islands. They contain real silver: 1.5 ounces of .999 fine silver each, worth 1.5 times the silver spot price. Without his records I can’t say what premium he paid for them. What a buyer has to understand is how much they are paying above that, and what a dealer will offer when they sell.
We carry the PAMP 1.5 oz Silver Lady Liberty ourselves, so I can show you our side. Our buy prices are posted every day, and the same buy list, on its silver page, shows what we pay for the 1.5 oz Silver Lady Liberty. The design added nothing to the buy price: it is paid for its silver like almost all our other silver coins, bars and rounds. Collector premiums can be far larger, as our piece on collectible coin premiums explains, and on modern graded coins they can vanish at resale, as our piece on MS70 graded Silver Eagles shows.
Why published prices matter
A published price lets you compare a product with spot before you commit, and some precious-metals websites don’t give you one. Some promote a phone consultation instead of showing prices you can compare. That alone doesn’t prove anyone did anything wrong. But before you buy, ask for a written all-in price, the spot price at that moment, the percentage premium, and a same-day buyback quote.
At Bullion Trading we publish our selling prices, our buy prices and the spread between them, item by item, so a buyer can see the round trip before paying. Advertising and endorsements are not a substitute for that. Our guide to the gold premium trap goes through what a fair premium looks like by product.
Is a gold IRA worth the fees?
In my view, often not, and I generally discourage physical-gold IRAs. The custodian, storage, insurance and administrative costs come due every year, and they may outweigh the IRA’s benefits when you could buy physical gold and hold it yourself.
The two tax regimes work differently, so it helps to keep them apart. Gold you hold yourself pays no interest or dividends, and its rise generally isn’t taxed until you sell. The IRS then treats the gain as a capital gain, and “Net capital gains from selling collectibles (such as coins or art) are taxed at a maximum 28% rate,” according to IRS Topic 409. Since gold you hold yourself isn’t taxed year by year anyway, it is fair to ask whether tax-advantaged IRA space is best used for gold rather than for investments that produce income.
An IRA is taxed on different rules, and they can be an advantage depending on your circumstances. Under IRS Publication 590-B, “Distributions from a traditional IRA are taxed as ordinary income,” apart from any part that came from nondeductible contributions, while distributions from a Roth IRA “aren’t taxed as long as you meet certain criteria.” Withdrawals before age 59½ generally carry an additional 10% tax unless an exception applies. Which works out better for you is a question for your tax adviser.
IRA bullion also has to meet the fineness rule in section 408(m) of the tax code (certain U.S. coins, such as the American Gold Eagle, qualify under the statute itself) and sit with an approved custodian, and administration, storage and insurance costs come out of the return every year. On a $10,000 account, $250 a year in fees is 2.5% of the starting balance, every year; that is a hypothetical, not a fee quote. When we compared four custodians’ published schedules in October 2026, they came to $215 to $610 a year on a $50,000 metals IRA, as our gold IRA guide explains.
None of this means a metals IRA has to lose money. An IRA that bought widely traded bullion at an ordinary premium shares in a rise like this one, less its fees. What hurt the customer I described started with what he paid going in; the account’s fees came on top.
What the Rosland Capital case shows about dealer risk
A buyback promise is only as good as the company making it. Rosland Capital filed for Chapter 11 on July 2, 2026, and on October 29, 2026 it filed a plan of liquidation dated October 28, 2026, according to the case docket kept by its noticing agent, BMC Group. We went through the filing in what went wrong at Rosland Capital. Nothing here suggests that the customer above bought from Rosland or that Rosland caused his losses.
Five questions to ask before you buy gold
- What is the all-in price, in writing?
- What percentage above spot is that?
- What would you pay to buy it back from me today?
- Is this a widely traded bullion product, or a collectible whose resale premium is harder to predict?
- What are all the custody, insurance, transaction and exit costs?
The right asset at the wrong price
I believe in gold, and I’m not telling anyone to stay away from it. The lesson from that customer is not to overpay for it: you can buy the right asset at the wrong price. Before you buy, ask what you’d get if you had to sell tomorrow.
Isaac Kahan, Bullion Trading LLC
Editor’s note: This article draws on a real customer’s experience. Identifying details have been left out to protect his privacy. We no longer have the customer’s invoices; the numerical examples are hypothetical and do not represent his purchases. This is general education, not individual tax or investment advice.
About the author
Isaac Kahan is the owner of Bullion Trading LLC, a precious-metals dealer at 20 West 47th Street in New York’s Diamond District. The company was established in 2008 and is part of the Kahan family’s business on 47th Street, which dates to 1968. Bullion Trading is licensed by the NYC Department of Consumer and Worker Protection as a secondhand dealer (license #1304378-DCA).
Sources
- IRS, Topic 409, Publication 590-B and tax on early distributions; 26 U.S.C. § 408(m).
- Published IRA fee schedules of GoldStar Trust, STRATA Trust, The Entrust Group and Equity Trust, read October 19, 2026.
- In re Rosland Capital LLC, No. 2:26-bk-16650 (Bankr. C.D. Cal.), docket nos. 1 and 248, via BMC Group and PacerMonitor.