Physical Silver Premiums

[jd1123]

Hey all - new member here. I'm obviously interested in investing in silver but have a few questions for the pros.

What are acceptable premiums for purchasing physical silver? I've seen it anywhere from $0.75/toz over spot for bars up to much more. What are considered "fair" , "good" and "expensive" premiums for generic bars and coins?

For some reason, I can't find this covered anywhere on google, just the dealer sites. Anyhow, thanks for the help.

 

[pmbug]

Hi jd, welcome to the forum. :wave:

Premiums vary based upon what form and quantity of silver you are buying. Government mint coins (Eagles, Maples, etc.) generally carry a higher premium than private mint products (rounds, ingots, bars). Government mint coins generally come in both bullion (uncirculated) and numismatic (proof) forms. Numismatic forms generally carry higher premiums (at least initially).

The lowest premiums are generally found for 90% silver (pre-1965 dimes, quarters and half-dollars).

As for what premium is reasonable? That's determined by the market. Shop around and see who's offering the best deal (don't forget to factor in shipping and handling as sometimes vendor hide some premium there). tulving's prices are a pretty good measuring stick IMO (though they have high minimum purchase requirements, so I don't expect dealers selling smaller lots to match them).

Around April of last year, premiums went through the roof for Eagles when the US Mint couldn't keep up with demand and dealer supplies dried up.

 

[Jetstream]

Just talked to a coin dealer yesterday who informed me there is a bit of a 'war' going on between the big 4 dealers in Canada with Maple Leafs.

Every once in awhile you can hit things on a lucky day.

 

[white&yellow999]

Welcome jd. You will certainly not regret your choice to invest in silver or any pm for that matter.

Premiums are truely based on what you buy. If you are buying silver for investment purposes I would probably stay away from the 90% silver coinage and the numismatics and stay with 999+ fine silver, although it's not a bad idea to atleast have a couple small bags of the 90% stuff around for other reasons.

Bigger bars usually carry a lower premium almost anywhere you shop. I prefer local coin shops over online dealers but to each there own. In the local coin shops where I live, the owners of the stores are willing to negotiate on premiums, give discounts for larger purchases and often times round down on the premium price to make the price an even number for easier calculation (yes it's true).

There are a couple good tools that if you check in the marketplace section of this forum that you can compare some current premiums from a few top online dealers side by side. As far as shopping around locally I can try to help you, I will give you the prices of the three local shops in my area so you can get an idea of what a local shop will probably run you.

Shop 1 - $4 over spot for ASE (only $2.50 per oz over if you buy a tube), $3 over for Maple Leafs and Other Gov't Bullion, $2 over on Englehard and JM products and $1 over for everything else, Bars over 10 oz $.75 over spot per oz.

Shop 2 - $1 over on any 10oz bars, $1.50 over for 1 oz generic bars and rounds, $2.50 over for brand name refiners and $3.50 for any Gov't issued bullion including ASE and Maples. $.50 off per oz on any purchases of one 1 once bars/rounds 10oz or more.

Shop 3 - $1 over for generic 1oz bars/rounds, $2 over for premium bars/rounds, $3 over for ASE and Maples. $.25 cents off per oz on any combination of more then 10 oz. 10 oz bars are $1 over... but if you buy a one oz to make it more then 10 oz the $.25 off discount applies.

Hope this gives you some help. Also don't forget to factor shipping if purchasing online. Be sure to shop around also continue to browse the forums for other tips on purchasing PM's.... there have been a couple first time buyers on the site before they made their purchases so we all offered some good advice on taking the plunge into metals.

 

[pmbug]

... also continue to browse the forums for other tips on purchasing PM's.... there have been a couple first time buyers on the site before they made their purchases so we all offered some good advice on taking the plunge into metals.

I tagged several of those threads for easy reference:

http://www.pmbug.com/forum/tags/buying bullion/

 

[dontdeBasemebro]

Welcome to the board!

The guys have already pretty much laid it out. I like to use APMEX as a measure of premium. They generally don't have the lowest, so I figure if it is lower than APMEX it is probably a decent deal, more than them is probably not.

Also look for coin shows in your area. I've had very good luck cutting deals. One technique that has worked well is negotiate a deal on some item, the pay in a round number. Instead of taking change, ask them to make up the change with metal. For example, say you buy a 10oz silver bar for $340. Give them $400, and then when they go to make change ask them to keep the $400 and throw in a pair of Eagles.

 

[jd1123]

Welcome jd. You will certainly not regret your choice to invest in silver or any pm for that matter.

Premiums are truely based on what you buy. If you are buying silver for investment purposes I would probably stay away from the 90% silver coinage and the numismatics and stay with 999+ fine silver, although it's not a bad idea to atleast have a couple small bags of the 90% stuff around for other reasons.

Bigger bars usually carry a lower premium almost anywhere you shop. I prefer local coin shops over online dealers but to each there own. In the local coin shops where I live, the owners of the stores are willing to negotiate on premiums, give discounts for larger purchases and often times round down on the premium price to make the price an even number for easier calculation (yes it's true).

There are a couple good tools that if you check in the marketplace section of this forum that you can compare some current premiums from a few top online dealers side by side. As far as shopping around locally I can try to help you, I will give you the prices of the three local shops in my area so you can get an idea of what a local shop will probably run you.

Shop 1 - $4 over spot for ASE (only $2.50 per oz over if you buy a tube), $3 over for Maple Leafs and Other Gov't Bullion, $2 over on Englehard and JM products and $1 over for everything else, Bars over 10 oz $.75 over spot per oz.

Shop 2 - $1 over on any 10oz bars, $1.50 over for 1 oz generic bars and rounds, $2.50 over for brand name refiners and $3.50 for any Gov't issued bullion including ASE and Maples. $.50 off per oz on any purchases of one 1 once bars/rounds 10oz or more.

Shop 3 - $1 over for generic 1oz bars/rounds, $2 over for premium bars/rounds, $3 over for ASE and Maples. $.25 cents off per oz on any combination of more then 10 oz. 10 oz bars are $1 over... but if you buy a one oz to make it more then 10 oz the $.25 off discount applies.

Hope this gives you some help. Also don't forget to factor shipping if purchasing online. Be sure to shop around also continue to browse the forums for other tips on purchasing PM's.... there have been a couple first time buyers on the site before they made their purchases so we all offered some good advice on taking the plunge into metals.

Hi White and Yellow -

This is a great post. Thank you. I have someone willing to sell generic 10oz bars to me for 0.75 over spot per ounce. Seemed like a good deal but when people say $1 over for 10 oz bars I don't know if they mean $1 per oz or $1 per bar. The numbers you've posted are all in per oz, correct?

Also I know some of the more recognizable products (such as ASEs and Englehard bars) carry a larger premiums, but probably sell for premium as well. If I buy generic silver (which seems the best in per premium) as opposed to a widely recognized mint, does this affect resale value? Specifically not the premiums, obviously ASEs will always carry one ans will demand a premium over generic products at resale. But will I have a problem convincing someone of its authenticity and weight?

Thanks for the responses everyone. This type of information doesn't seem to be easy to find and it's good to hear from other who are actively investing in physical silver.

 

[pmbug]

... when people say $1 over for 10 oz bars I don't know if they mean $1 per oz or $1 per bar. The numbers you've posted are all in per oz, correct?

It's always per troy ounce.

... Also I know some of the more recognizable products (such as ASEs and Englehard bars) carry a larger premiums, but probably sell for premium as well. ...

Generally, yes. If you are buying for investment purposes (with an eye to selling at some point in the forseeable future as opposed to buying for long term holdings / hedging against TEOTWAWKI), the spread between buying/sellng is more important than the premium on just one side of the deal. However, understand that the premiums/spread can change over time depending upon the market demand (as we saw last year around April).