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Old 06-06-2012, 12:05 PM   #1
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New to collecting

Hey guys, I'm new to Precious metals collecting and really like silver. Gold is too expensive for me. I have a question and maybe you can point me to a previous post which discussed this. I see silver is $29.00 +/- per troy oz. but everywhere I look, it seems there is about 10% to 15% added to the current value. Other than something like old coins and items of intrinsic value, why would a 1oz. ingot sell for $35.00 vs. the $29.00 current value?
Thanks for the help.
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Old 06-06-2012, 12:23 PM   #2
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Welcome!


You asked a very broad question with a long full answer.

Short answer:
The "Spot" price is the price to buy what is called paper silver such as the ETF stock SLV. The price for physical silver is a tad higher.

On top of that you have the premium for the collectabiliy of that individual piece (one reason why a bar of silver is usually cheaper than coins), the premium that dealer is charging you to make a profit, and shipping/insurance/ect.
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Old 06-06-2012, 12:45 PM   #3
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Originally Posted by benjamen View Post:
Short answer:
The "Spot" price is the price to buy what is called paper silver such as the ETF stock SLV. The price for physical silver is a tad higher.

On top of that you have the premium for the collectabiliy of that individual piece (one reason why a bar of silver is usually cheaper than coins), the premium that dealer is charging you to make a profit, and shipping/insurance/ect.
+1 above.

I am relatively new as well to "stacking." I discovered that buying in larger quantities reduced the "premium" placed on purchases.

I've bought my PM's via tulving.com.
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Old 06-06-2012, 12:45 PM   #4
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Hi Mark, welcome to the forum.

Yep - the premiums over spot vary for different forms of silver usually in the following tiers:
  • 90% (aka "junk") silver
  • generic (private mint) bars/rounds
  • popular private mint bars/rounds (Englehard, Johnson Matthey, etc.)
  • government mint coins
  • numismatics (graded coins sold for "collector value")
Most products also have a premium when selling back to a dealer. The spread between the buy/sell premiums is usually fairly similar (except for numismatics IMO).
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Old 06-06-2012, 12:50 PM   #5
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My supplier for Junk silver had their premiums go up recently due to reduced supply. The premium is relative to the available supply, and the dealers expected deliveries of whatever it is you are buying.
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Old 06-06-2012, 01:11 PM   #6
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Thanks guys.
I'm more interested in silver as an investment. Silver bars vs. coinage and the like.
I sort of thought that limited editions of certain strikings could inflate the price, and I'm sure there's a "brokerage" fee connected, too. We all have to make a profit.
I guess my biggest concern now would be investing, say $300.00 in 10 oz of silver, going to sell it at market value ($290.00 +/-) later on, the buyer offering me only $290.00 (current market value) and I say, "Wait; what about my $10.00 brokers fee?". And he says, "Tough, I can't help what you pay in brokerage fees".
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Old 06-06-2012, 01:15 PM   #7
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I see now. If I was trading silver as a commodity, the "spot" price is what I'd be trading with, but the physical silver itself is going to be a little higher.
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Old 06-06-2012, 01:32 PM   #8
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I'll pay the premium on physical over paper all day long... it's worth it to have the physical stack in your possession.

Plus, it's a good reason to buy a new boat.

http://www.pmbug.com/forum/f9/why-th...ccidents-1027/
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Old 06-06-2012, 01:49 PM   #9
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Mark,
All gopod answers above. I personally no longer buy the generic bars, and stick to junk and sovereign silver. They have proven themselves to be more trusted and therefore more fungible.
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Old 06-06-2012, 02:06 PM   #10
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Welcome Mark from me as well. You are taking up the best hobby in town!

You can buy gold in 1/10th oz sizes for about $190.00 each (Gold Eagles), I just bought another one yesterday (along with a couple of 1 oz Eagles).

***

The Bearing is now "hating on the cops" because they busted me for rolling through a stop sign ($179 fine, careful ancona...), so I retaliated against the system by buying GOLD.

/rant off
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Old 06-06-2012, 02:34 PM   #11
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DC,
That really sucks.
1/10 oz GOLD for rolling a stop sign.


GOD BLESS OUR TROOPS!!!
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Old 06-06-2012, 11:55 PM   #12
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Congrats on deceiding to get into the game and welcome to the forum. Keep searching the forum pages for some other great advice like when and how to be making your buys. You are not the first person new to the PM game that has come here for advice so there really is A LOT of good advice.

I agree with "the Bearing" gold is expensive, but even if you just buy a few fractional gold pieces (they make things like 5 gram bars or 1/10th oz coins/rounds), it is good to diversify.
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Old 06-07-2012, 04:04 AM   #13
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Hey guys, you forgot to share one of the most important tips to our new enthusiast: GET BOATING INSURANCE!
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Old 06-07-2012, 07:49 AM   #14
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Originally Posted by mike View Post:
Hey guys, you forgot to share one of the most important tips to our new enthusiast: GET BOATING INSURANCE!
Well, I just hope my Automobile insurance does what they're supposed to do. My car caught on fire a few weeks ago and I'm still waiting on Allstate. We'll see.
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