When you create a new order to buy or sell precious metals, we communicate electronically with a network of suppliers around the world – multiple institutional dealers, mints and refiners -- to get real-time pricing for the quantity and selection you've chosen, in the region you've chosen.
We use those offers to provide you with an estimated or “indicative” price based on the average available in that region at that time.
However, when you submit your order, we will trade it with whoever offers the best execution at that time. This execution price is usually better than the indicative price, but not always.
Because of this real-time pricing model, when you place a buy order for a specific quantity of metals we require you to have a little more than the indicative price in your account (what we call an “execution buffer”) to cover the final execution price, just in case it is higher. The indicative and maximum total price with the buffer are shown before you execute your order. And your final execution price is locked during market hours and shown in your confirmation and in your transaction history. (You can also place a buy order for a maximum amount of cash, say $10,000, and we’ll buy as much of that product as possible for under that cap at current prices. Outside of a product’s market hours, only cash orders can be placed.)
Sell orders don’t require a buffer, but similarly are quoted based on the average bid, and the final price is set with the supplier offering the best execution at that time.
This marketplace approach helps us provide customers with the lowest possible transaction commissions and give them access to liquidity even when markets get volatile, much like a brokerage.