Why You Can’t Buy Silver Bullion At Spot

The silver price of gold is going up. The current spot price of silver is $29/oz. this means you should be able to buy a 1oz Australian Kangaroo silver coin for $29.00. You could start collecting silver coins and vaulting them for the future. Silver bullion is easier to price because there are no premiums that are often associated with numismatic coins. Still, if you were to buy a brand new 1oz. silver Australian Kangaroo coin you would not pay an amount that is equal to the day’s silver spot price. You can expect to pay some extra dollars in addition to what the day’s spot price of silver is.

This seems logical, right? The bullion dealer you are buying your bullion from needs to make a profit and he can only do that by finding ways to charge something more over the spot price. You might not have to pay for the artistic merits of the coins like the merits. If you are looking to sell silver bullion only as an investment you can store or sell-off when you need the money you want a good deal. Most silver investors revel in the feeling of having obtained a good chunk of precious metal at a low price. This has little to do with greed but with the particular mindset that silver buyers usually have. Most are silver stackers who have a survivalist mindset that says they have to be prepared for whatever the world throws at them.

Why do you pay more than the spot price when you buy silver bullion? It comes down to the cost of business. Dealers cannot afford to pay you spot when you sell silver bullion. It is an irrational and unsustainable way of doing business. They have overheads. They need to pay for rent, electricity, insurance, marketing, and a bunch of other things and of course, they need to make a profit at the end of it all.

So, what is a fair premium over spot price for silver bullion? The answer to that depends on what you are buying; silver bars have a low premium than silver coins. Quantity is also important. Bulk orders usually carry lower premiums. Silver bars usually have a premium that is 5- 8 percent above spot whilst coins are traded at 12 to 20 percent over spot. Silver rounds’ premiums are somewhere in between. Silver prices can also depend on the mints that made the product and the popularity of the products in the market.  When you buy silver bars and coins that are popular in the market you will find that they are also more liquid and will fetch a good price when you decide to sell.

Speaking of selling, finding a bullion dealer that has a good reputation is easy. You can find reviews on a particular dealer online and you can also turn to the Better Business Bureau. You can also look for dealers that are authorized distributors for the major mints like the Perth Mint, Royal Australian Mint the U.S Mint, and the Royal Canadian Mint. A dealer with affiliations like that will not do anything to jeopardise that relationship.

Choose a bullion dealer with a return and a buy-back policy. This is an indication that they believe in their products and service and are willing to back both up.

Silver investors are aware of the importance of having this precious metal in times of financial and economic stress. You should choose a silver bullion dealer who offers fair prices to buyers and also pays out reasonably to sellers. This combination will ensure that you are always the winner either way.

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