In this part of the Allocated Bullion Exchange review, you will see that a defining feature that really does separate ABX Global from other physical bullion providers is the sheer breadth of global coverage:
- 9 physical precious metals markets (AUD & USD)
I found this level of choice to be an important feature of the Allocated Bullion Exchange review. Anyone wanting to diversify their wealth across multiple international locations as a way to mitigate any geopolitical risks will appreciate this, because it's always the bus that you don't see that hits you.
Such global access is unrivalled - The next most global bullion provider is GoldMoney which only offers 5 locations as opposed to ABX's 9. So you can see there is a big difference in choice.
Furthermore, having such a global coverage dramatically increases the liquidity available to investors. Each market has multiple Liquidity Providers which increases the depth of trade.
One of the biggest benefits in having higher levels of liquidity available than to other sources of bullion is that the spread in price between Bid and Ask is much tighter.
For example the spread on a 1kg gold bar with the exchange vs the next smallest spreads we could find (NB. rates are always in flux so when you check the numbers may differ slightly to below):
The worst spread was 11.67% with Kitco (Hong Kong) for 100oz silver bar (numbers sourced from Bullion Capital).
What these figures mean is that if the price hasn't changed and you decide to sell your gold bullion back through ABX, you lose about 0.14% of your original money, but with the next cheapest choice, BullionVault, you lose about 1.04%.
You have 2 types of spreads:
- Created by natural market supply & demand forces
- Artificial (extra hidden fees added to the prices you see which forces the spread apart
The higher % spreads indicate artificial prices. It'll be because of these hidden fees that companies can advertise such low brokerage fees. The hidden extra revenue they get from each purchase and sale is where they make their profit. If you do some calculations on fees & prices vs spot, you will likely find that you are paying far more than you would through an ABX member like GoldVu.
The exchange doesn't create any artificial price spreads, so you know that you are getting the best priced bullion in the world. The spread that does exit on the ABX is generated by purely natural market forces.
It is my belief that no price spread should ever be artificially generated because it distorts the true price of the asset and it also basically means that you’re secretly getting screwed by the provider with their hidden fee.
Allocated Bullion Exchange Review : Summary on Global Coverage
Not much I can say for this part of the Allocated Bullion Exchange review as the numbers speak for themselves – the differences are huge!
So for its truly uniquely global nature and the incredibly tight natural price spreads, this global exchange receives top marks.