As many people have pointed out the premiums on silver are getting out of hand. For those new to buying metals a spot price is the market price of a precious metal, which fluctuates on a minute-to-minute basis. Premium is the additional cost of any precious metal above the spot price, which accounts for the costs of doing business, such as fabrication and distribution, and additional collectible valve.
So Why You Can't Buy Silver At Spot Price
The goal of any any silver stacker is to buy silver as close to spot price as possible. Have you ever really thought as to why you need to pay over spot to acquire a silver bar, round, or coin? Well I have and I'm pretty practical and understand brokers are financially unable to both buy your bullion at spot price and sell it at spot price. That's crazy and it would be an unsustainable business model. It's reasonable to believe they need to make a profit and cover overhead which includes things like mortgage, electric, gas, marketing, payroll, and insurance.
What I have seen in the past is a fair premium for bars is typically 5-8%, while silver coins usually trade for more, typically in the range of 10-20% premiums above spot. However, today it feels like premiums are getting larger. I hate to say it, but it feels like many places are starting to price gouge...
Today's price action was pretty flat today, but silver closed at $18.91. Let's use this price to calculate premiums on some of my favorite coins.
First let's look at a 2022 Eagle which for most buys will cost them $38.90. In love eagles, but right now they are carrying a whopping 105.6% premium at these prices!
Next up the 2022 Canadian Maple which is $29.90 per coin. That comes out to 58.03% premium which is far greater than that 20% I use to see.
I know coins carry higher premiums so let's look at a 1ox bar. This Apmex branded bar will cost you $27.20 or 43.76% over today's price.
Looking at these premiums you would think the price of silver is skyrocketing and demand is out of control. However, prices are tumbling and I do believe demand is high, but this high to justify these premiums I just don't believe it. We will have to wait and see if premiums ever come down. I guess only time will tell
