Why a Gold Dealer Can Go Bankrupt Even When Gold Prices Are Soaring

If you’ve been paying attention to precious metals news lately, you may have noticed something that sounds backwards: gold and silver prices went on a historic run, and yet dealers have still been going out of business. It seems like it shouldn’t be possible. If the stuff you sell keeps getting more valuable, how do you end up broke?

Here’s the piece that’s easy to miss: prices didn’t just go up and stay up. They went up sharply, then came back down. Both of the dealers we’ll talk about below got themselves into trouble on the way up — taking customer money and making delivery promises they couldn’t keep at the price the customer paid. When the price then dropped, it didn’t fix the problem. It made it worse, because now the company was also sitting on a pile of obligations at prices well above the current market. The rise created the exposure. The fall exposed it.

If you’re new to buying physical gold and silver, understanding this one issue will help you avoid a lot of heartache — and possibly a lot of money.

A Real Example: Rosland Capital

In July 2026, Rosland Capital — a Los Angeles-based dealer many people recognized from its television ads — filed for Chapter 11 bankruptcy and began liquidating. According to court filings, the company listed somewhere between $1 million and $10 million in assets against $50 million to $100 million in liabilities. Its revenue had also been sliding for years, dropping from around $151 million in 2021 to under $100 million in 2025.

Gold climbed from around $1,500 an ounce in 2023 to a peak near $5,620 an ounce in January 2026, before pulling back to around $4,175 by early July. During the run-up, Rosland’s cost to actually acquire and deliver the metal it had already sold kept climbing right along with the market. If a customer paid for gold at one price, and Rosland didn’t get around to buying the actual metal until weeks later at a higher price, the company lost money on that order — every time. That gap, repeated across a large backlog of orders, left Rosland with a $49 million deferred revenue balance and an $11.8 million buy-back list it couldn’t cover. The eventual pullback in price didn’t rescue the company; by then the backlog and the cash drain had already done the damage.

To make matters worse, sales commissions of 15% to 35% of gross profit were reportedly paid out to reps as soon as a customer’s money came in — even if the order was later canceled or never delivered. Sit with that number for a second: if the person who picked up the phone was making 15 to 35 cents of every profit dollar, the company itself needed to be making at least that much on top of it just to break even on the sale, before any of the risk described above even entered the picture. That math has to come from somewhere, and it comes out of the price the customer pays. High commissions and high customer premiums tend to travel together.

Meanwhile, the cash from those commissions went out the door immediately, while the obligation to deliver metal sat on the books, growing more expensive by the week.

This Isn’t a New Story

If this sounds familiar, it should. The same basic problem sank a much smaller, but well-known, bullion dealer over a decade earlier: The Tulving Company.

Tulving shut down in March 2014 owing roughly 1,000 customers about $40 million. In 2011, the company had claimed $25 million worth of silver inventory. By the time it collapsed, that inventory was worth less than $50,000. Independent researchers who dug into the case afterward found that Tulving held a trading account with a futures broker, and the pattern of the collapse looked less like ordinary hedging and more like the company was betting on which direction gold and silver prices would move — the dealer’s version of gambling with customer money. Hannes Tulving, the company’s owner, later pleaded guilty to wire fraud for taking customer orders he reportedly knew the company couldn’t fill.

Two very different companies, two different eras, and the same underlying mistake: take in customer money, promise delivery at today’s price, and don’t actually lock in that price by acquiring the metal or hedging it right away.

A Useful (and Important) Comparison: The Hunt Brothers

You may have also heard of the Hunt Brothers, the Texas family that built an enormous silver position around 1979–1980. It’s worth mentioning here for comparison, though the situation was different in an important way, and we don’t think it’s fair to lump them in with the dealers above.

The Hunts drove silver from around $6 an ounce in early 1979 to nearly $50 an ounce in January 1980, using leverage — money borrowed from brokers and banks — to build their position. Nothing about that was illegal at the time. What changed the outcome was that the exchanges tightened margin requirements and, by most accounts, banks and lenders made a decision to stop extending further credit to the Hunts. That’s a fair question worth asking on its own: why did the rules change, and whose interests did that serve? Regardless of the answer, once that credit line closed, the Hunts faced margin calls reportedly totaling $100 million to $135 million they could no longer meet, and when they defaulted, silver collapsed to $10.80 an ounce on March 27, 1980 — “Silver Thursday.” It took a roughly $1.1 billion bank rescue package to contain the fallout.

The mechanical similarity to Rosland and Tulving is this: a large, unhedged position built during a rising market can turn catastrophic once the market turns or the rules around it change. But the important difference is whose money was on the line, and how it got there. The Hunts were using their own borrowed money, taken on legally, in a bet that stopped working once financing was pulled out from under them. Rosland and Tulving were using customer funds — money paid in advance by ordinary people expecting delivery of metal, not knowingly signing up for exposure to a company’s trading position. That’s a meaningfully different situation, and it’s why we’re not putting the Hunts in the same category as the two dealers above — we just think the underlying lesson about unhedged exposure is one worth drawing from both.

Hedging vs. Speculating: The Difference That Matters

Here’s the plain-language version of what went wrong in all three cases, and what a well-run dealer does differently.

When you buy gold or silver from a dealer, there’s usually a gap in time between when you pay and when the dealer actually acquires the physical metal to send you. During that gap, the market price can move — in either direction. A responsible dealer closes that gap immediately: the moment your order comes in, they offset it, typically through a hedge in the futures or spot market. That way, whether gold goes up or down $50 an ounce before your metal ships, it doesn’t matter to the dealer’s bottom line. They already locked in their cost the moment they took your order.

A dealer that skips this step is, whether they call it that or not, speculating. They’re betting that prices will move in their favor, or at least stay put, before they have to go acquire your metal. Most of the time, that bet is invisible — nobody notices, because prices don’t move enough to expose the gap. But in a market with the kind of swings gold and silver have seen recently, that bet can go bad very quickly, and very publicly, on the way up or the way down.

What This Means for You as a Buyer

You’re not in a position to see a dealer’s internal hedging practices just by looking at their website or reading their ads. But there are a few practical things you can do:

• Ask directly how quickly they hedge or acquire the actual metal after you pay. A dealer with nothing to hide will have a clear, immediate answer.
• Ask how their sales staff are paid. A large commission isn’t just a cost to you — it’s also a clue about how much room the company is building into the price to cover that commission, and what else that pricing might be masking.
• Be wary of delivery promises that keep slipping. Long or vague delivery windows are often a sign a dealer doesn’t actually have the metal, and is hoping to acquire it later at a price they can still afford.
• Look at how long the company has been in business, and through how many market cycles. A dealer that’s weathered previous gold and silver booms and busts without a delivery or bankruptcy problem has, at minimum, proven their model survives volatility in both directions, not just calm markets.
• Understand that “lowest price” isn’t the same as “safest.” Both Rosland and Tulving built customer bases in part on being aggressive on price. In both cases, that pricing model turned out to be connected to how the company was managing, or not managing, its risk behind the scenes.

None of this means physical gold and silver are a bad investment — the metal itself did exactly what you’d expect during these run-ups and pullbacks. What failed in these cases wasn’t the metal. It was the business model wrapped around it.

Where We Stand

We’re not writing this from the outside looking in. CMI Gold & Silver has been in this business since 1973, through the Hunt Brothers silver squeeze, the 2008 financial crisis, and every gold and silver cycle since. Our brokers are non-commissioned. Nobody here is paid based on how much they can talk you into buying, or how aggressively they can price an order — which means there’s no built-in incentive pushing prices higher just to fund a payout on the other side of the sale. When an ounce comes in or goes out, we offset it. We may not make as much on any single trade when the market happens to move in our favor afterward, but we’re also never gambling with the money you send us. That’s the trade-off, and it’s one we’ve been comfortable making for over 50 years.

If you were a customer of Rosland Capital or Tulving, whether recently or years ago, and you’re still sorting out what to do next, we’re happy to help — no pressure, no sales pitch. You had the right idea buying physical gold and silver. You just ended up with the wrong dealer. That’s not something you need to feel bad about, and it’s not something you have to untangle alone.

This post is for educational purposes and reflects publicly available bankruptcy filings and news reporting on the companies mentioned. It isn’t investment, legal, or tax advice.

The post Why a Gold Dealer Can Go Bankrupt Even When Gold Prices Are Soaring first appeared on CMI Gold & Silver.

Source: https://cmi-gold-silver.com/why-a-gold-dealer-can-go-bankrupt/