MARKET LOSS POLICY

When investing in precious metals such as gold, silver, platinum, or palladium, it's important to understand how pricing and returns are affected by the fluctuations of the global market. One key element of buying and selling bullion is the Market Loss Policy, which protects dealers and ensures fairness in transactions. Below, we explain what a market loss policy is, why it matters, and how it works.

What Is a Market Loss Policy?

A Market Loss Policy is a standard practice in the precious metals industry that protects both the buyer and the dealer from the financial risks associated with sudden price fluctuations in the bullion market. It applies when an order is locked in, typically over the phone or online, and then later canceled, returned, or not paid for.

Once a price is locked, the dealer enters into a corresponding hedge or commitment to honor that price, regardless of market changes. If the customer later backs out and the market has moved against the original price, the dealer may incur a loss. The Market Loss Policy holds the customer responsible for this difference.

Why Is It Necessary?

Precious metals prices can be volatile, changing minute by minute based on global economic indicators, geopolitical events, and supply-demand dynamics. To protect against potential financial exposure, dealers hedge or source metals at the time an order is placed and the price is confirmed. If the customer fails to complete the transaction, the dealer could suffer a real monetary loss.

The Market Loss Policy ensures accountability and discourages speculative or non-serious ordering. It also allows legitimate buyers to lock in pricing with confidence, knowing that their transaction is backed by a secure and structured process.

How the Market Loss Policy Works

Here's a breakdown of how the policy typically applies:

  • Locked-in Orders: Once you confirm an order for bullion, whether buying or selling, the price is locked based on current market rates.
  • Cancellations or Failures to Pay: If you cancel the order, fail to complete payment, or return bullion for any reason, the dealer will determine the market price at the time of cancellation or return.
  • Market Loss Calculation: If the market has moved unfavorably (e.g., the price of gold drops after you lock in a higher purchase price), you may be charged the difference as a market loss.
  • Market Gains: If the market moves in your favor, most dealers do not credit the difference to you. The policy is designed to cover losses only, not to reward speculative gains.

  • Example Scenario

    You place a purchase order for 10 ounces of gold at $2,000/oz, totaling $20,000. Once you confirm an order for bullion, whether buying or selling, the price is locked based on current market rates.

    A few days later, before completing payment, you cancel the order.

    The market price at the time of cancellation is now $1,950/oz.

    The dealer must now sell that gold at the lower price, incurring a $500 loss.

    Under the Market Loss Policy, you are responsible for covering the $500 difference.

    Important Notes for Customers

  • Always be sure before you buy. When you lock in a price, it is considered a binding agreement.
  • Understand the risk. Committing to a price means you share in the market risk if you cancel.
  • Consult before selling. The same policies typically apply to customers selling bullion to dealers, if you lock in a sale price and cancel, you may owe the difference if the market moves.

  • A Market Loss Policy is not meant to be punitive, but protective, for both buyers and sellers. It ensures that once a transaction is agreed upon, both parties are held to the same standards of fairness and financial integrity. We encourage our customers to ask questions, seek clarification, and proceed with confidence, knowing the policy is in place to create a reliable and stable trading environment.

    For questions about our Market Loss Policy or to discuss a bullion transaction, please contact our team, we're here to help.

    Our market loss policy applies to Bullion only. The term “Bullion” is used to describe Gold, Silver Platinum or Palladium coin(s), bar(s) or round(s) which closely follow spot prices and have little or no Numismatic value.

    When buying from Rinkor Rare Coins, LLC, once we have issued a Sales Order confirmation number, you have entered a binding contract. Due to a fluctuating market, the transaction price is locked-in and may not be cancelled, and any corresponding Market Risk is transferred to you.

    All cancelled Sales Orders, whether due to a default in payment or any other act committed by you that requires a cancellation, are subject to a $35 cancellation fee as well as any incurred Market Loss. Any Market Gain on the cancellation will be kept by Rinkor Rare Coins, LLC. A Market Loss will be incurred when the price of the precious metal falls below the price you agreed to purchase. Should this happen, you will be charged the difference between the original purchase price and the price at the time of cancellation. This amount plus the $35 cancellation fee will be deducted from the original payment method or charge to the credit card on file.

    The following terms have the following meanings in the Market Loss Policy.

    Bullion

  • The term “Bullion” is used to describe Gold, Silver Platinum or Palladium coin(s), bar(s) or round(s) which closely follow spot prices and have little or no Numismatic value.
  • Market Gain

  • The term “Market Gain” applies to Sales Orders cancelled by Rinkor Rare Coins, LLC. Market Gain occurs when the cancelled Sales Order is greater than the original agreed upon sales price.
  • Market Loss

  • The term “Market Loss” applies to Sales Orders cancelled by Rinkor Rare Coins, LLC. Market Loss occurs when the cancelled Sales Order is less than the original agree upon sales prices.
  • Numismatic

  • The term “Numismatic” refers to the study or collection of anything used as a medium of exchange.
  • Market Risk

  • The term “Market Risk” refers to the risk of losses in positions from movements in market variables like prices and volatility.
  • Precious Metal

  • The term “Precious Metal” refers to Gold, Silver and Platinum along with other rare, naturally occurring metals of high economic value.
  • Unit Price At Time Of Confirmation Unit Price At Time of Cancellation Quantity Difference Market Loss or Gain Incurred Fees
    $30 $25 20 -$5 per unit ($25-$30) x 20 = -$100 $100 + $35
    $30 $35 20 +$5 per unit ($30-$35) x 20 = +$100  $0
    Product added!