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:
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
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
Market Gain
Market Loss
Numismatic
Market Risk
Precious Metal
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 |