How can people buy Gold bars for cheaper than market price?

I've noticed places like Ebay selling gold bars at prices than less than what they sell for on the regular market, and I know that they're not selling them at a loss. Where could they be getting this gold from.

Public Comments

1. Gold is a commodity. So is toilet paper. Let's use what you know, and extrapolate to what you don't. If you go to Star Market, you can get Charmin toilet paper; they're going to have a marginally different price than Stop'n'Shop. Your corner grocer will usually sell it for even more, for the convenience of getting it nearby. You can buy the store-brand for less. If you go to Costco, you can buy it in bulk and save a lot. Or buy it in bulk at a bankruptcy auction, and you'll get it for less than the cost of manufacturing. That's how all commodities are sold, be they toilet paper, gold, or pork bellies. The price you see in the paper is the current price most people are paying, but if somebody can get a deal through a bankruptcy, foreclosure, or salvage operation, they can make a lot of money. The ideal is to buy low, sell high. If you are an inexperienced buyer of gold, then only buy gold from gold markets. EBay is not a gold market; any price you pay will probably be more than what it's worth. You have no way to inspect the goods and verify the quality; a major purchase is inadvisable. However, if you are looking at gold coins as a collector, EBay is a collector's market and can be a good place to buy a missing coin for your collection.
2. Try the commodoties market - you can buy forwards or future contracts which give you the right to buy gold or any other commodity at a pre determined price by a certain date.
3. Ebay has become a haven for scammers and rip off artists .Especially the higher priced items. Ebay works as an auction as you know most auctions start off below the price they expect to get. This gets the parties interested in the thought they could own the items. Then the price goes up. Gold has tons of buyers on Ebay. If an auction interests you watch it. If they sell a lot of that item just see where it goes. Then see the feedbacks. Some of those can be part of a scam. It isn't too hard to see the legit sellers. Deals on ebay in gold are infrequent but they do happen. Just be careful. Never buy from someone with less than a 97 rating.
4. The official gold price is fixed twice a day by 3 people in a room in the City of London. Anyone selling at below this price is losing money, given that the official price is what you could sell to a bank at. No-one likes to lose money, hence I think you can infer the sellers are a scam.