Let’s admit it, gold and silver stackers, wouldn’t it just be grand to buy silver at spot price? Think about that pile of metals in your vault growing ever higher, all at the price of what silver is really worth. Eliminate the middle person—no numismatic premiums. And all the while that silver or gold keeps appreciating in value day after day, month after month, year after year.
Unfortunately, anyone who says they know how to buy silver at spot price is either lying or mistaken.
So, why can’t you buy precious metals at their spot price (melt value)? Why do you need to pay dollars over spot to acquire a silver bar, round, or coin? It’s not like you’re collecting those silver pieces for their rarity or artistic merits... It’s silver, right? Buy it, store it, sell it, make your money, and move on.
The Silver American Eagle bullion coin is sold at a significant premium above the silver spot price
Of course, everyone wants a deal. But for some silver stackers, buying silver at spot price isn’t necessarily about saving a dollar or two on an American Silver Eagle. Many are prospectors at heart, hunters in spirit. They want the “prize” of obtaining a chunk of precious metal at its spot value, without paying the extra premium. It’s less a matter of greed and more about a mindset—a particular type of outside-the-box outlook on life. There may well be a correlation between this philosophy and the fact that a significant number of silver stackers also identify themselves as survivalists, prepared for whatever this ever-changing world throws their way.
Bottom Line:
The price of a gold or silver product includes overhead costs, manufacturing costs, and labor costs—not just the melt value of the metal.
There’s No Santa Claus in Bullion
Why pay more for silver than what the bullion ticker says it’s worth? Ultimately, it comes down to the cost of doing business. Coin dealers and bullion brokers are financially unable to both buy your bullion at spot price and sell it at spot price, too. That would be an unsustainable business model—businesses need to make a profit. And what is more, they need to pay the overhead, including rent or mortgage, electric, gas, marketing, payroll, insurance, and—of course—earn some profit, too.
You may have heard the old saying, “There’s no Santa Claus in numismatics.” Of course, it’s a phrase that means you’re not just going to get a bunch of free deals in the arena of buying and selling coins. Everyone wants to earn their share. That’s why silver stackers do what they do, too. However, this is not to say you can’t find an occasional deal when buying silver bullion.
Many bullion dealers offer silver starter packages that contain 10 to 20 ounces of silver at the price of spot. Other dealers will sell a current-year American Silver Eagle at spot—or at a much lower price than fair market value anyway. But there’s a catch to such deals… They are usually one-time offers for new customers only. They’re offers that many in the business world call “loss leader specials.” The strategy behind this is to build a client base by selling silver coins or other bullion products at prices below the retail market rate. Then, once the customer is established, they’re charged the “regular” price.
This sales practice isn’t unique to bullion. You probably see it every day. Remember the Columbia House ads in the 1980s and ‘90s that sold 12 cassette tapes or CDs for a penny? How about those CD-ROMs you may have gotten in the mail years back offering 50 hours of free internet from AOL? That first-month-free rental apartment or storage unit? How about those specials at the local fast-food chain where you pay full-price for a sandwich and get a free fry and drink?
These are all types of loss-leader specials. But you can’t keep getting those free fries and drinks forever… At some point, you’re going to pay for them. And that’s the case with paying spot silver prices through an advertisem*nt. There’s no Santa Claus in bullion, either.
The notion of buying silver at spot price on the retail market is akin to a fairy tale!
In fact, if you sign up for one of those introductory deals where you get silver coins at spot, watch out. Get yourself into a contract situation of some type with one of those bullion outfits, and you may end up paying a lot more than you bargained for. Many of these companies can afford to offer these specials only because they charge much more than fair market value for their products. Remember, nothing is free! Not even silver coins.
Bear in mind that legitimate bullion dealers tend to operate on very thin profit margins. This means they have very little wiggle room to offer enticing discounts.
Bottom Line:
Deals for discounted bullion are rare, and should be taken with a grain of salt.
So, What’s A Fair Price for Silver? And Where Should You Buy It?
What is a reasonable premium over spot for silver? The answers to these questions depend on what you’re buying. Silver bars carry the lowest premium, followed by silver rounds. Silver coins generally have the highest premiums. Quantity also counts. Usually, you see lower premiums on bulk orders. Bulk usually meaning something north of 10 ounces (or units), and typically closer to 100 ounces (or units) and up.
A fair premium for silver bars is typically 5% to 8%, while silver coins usually trade for 12% to 20% premiums above spot. Silver rounds register in between those premium points. Prices can be higher or lower depending on the mint that produced the round and its popularity in the marketplace.
Of course, you get what you pay for, too. Ordinarily, the more popular bars, rounds, and coins—the ones for which you may pay a slightly higher premium—are also more widely recognized and in demand. In other words, they’re generally more liquid and more likely to help fetch you a higher price when the time comes that you wish to sell your silver bullion.
While silver bullion comes in several different forms, all of these products are priced at a premium over spot.
Finding a place that will sell you quality silver bars, rounds, and coins at a fair price isn’t hard if you know what to look for. Turn to a bullion dealer who receives high marks by the Better Business Bureau. Also, look for one that is a member of the Industry Council for Tangible Assets—a leading organization for the world’s premier bullion dealers.
You can always check out our silver and gold spot price charts for the latest precious metals prices by following the links herein.
You also want a dealer who has many inroads with the best numismatic organizations. These include the American Numismatic Association, Certified Coin Exchange, Professional Coin Grading Service, and Numismatic Guaranty Corporation. And a dealer who is an authorized distributor for the world’s major mints. These include the Perth Mint, Royal Mint, Monnaie de Paris, the Australian Mint, and of course, the United States Mint. After all, such well-affiliated dealers try hard to be the best at what they do. They are not going to want to do something to mess up their solid reputations.
Finally, make sure you choose a dealer who offers a return policy and stands behind both their products and service. Peace of mind is what silver stackers want—it’s why so many are stocking up for an emergency. Buying silver bars, rounds, and coins from a reputable dealer who offers their products at fair prices and also pays reasonable prices for the silver they buy from you is a winning combination—one in which you are always the winner. If you want to find the cheapest place to buy silver online, look no further than Gainesville Coins!
Bottom Line:
Expect to pay about 5% to 8% above spot price for bullion bars, and about 12% to 20% over spot for bullion coins.
Joshua McMorrow-Hernandez is a journalist, editor, and blogger who has won multiple awards from the Numismatic Literary Guild. He has also authored numerous books, including works profiling the history of the United States Mint and United States coinage.
More articles about buying precious metals:
Best Way to Buy Silver: A Guide to Buying Physical Silver
How To Tell If Silver Is Real
Gold and Silver Stacking: Expert Guide
How Much Is a Gold Bar Worth?
American Gold Eagle Values: How Much Are They Worth?
Caleb | 10/15/2022
More like 30%+++ over spot price amirite? ($18 spot today, good luck finding a deal under $23.50)
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TulsaSilver | 7/14/2022
I would say the coins are 20+ % over spot and only if you buy a large bulk...otherwise it is even higher. That is for ones they do not want. Maples and US are much much higher.
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John | 5/15/2022
Absolutely wrong. You are simply trying to’’bump the price’’ . I can buy silver bars and generic silver rounds for the spot price all day long. Any quantity. Big or small. From multiple dealers in my area.
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zlfskywalker | 7/1/2022
Where you live? I wanna buy those silver at spot price too, please.
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Everett | 5/16/2022
That's an incredible claim, John. You must be a very rich man by now!I would be curious to know how those "multiple dealers in your area" haven't gone out of business yet. Surely they advertise this deal to buy silver (in any quantity!) at spot price, right? The volume of orders they would receive at that price must be enormous.
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FAQs
It is almost impossible to buy silver, gold, and other precious metals at spot price because the spot price does not take into account the additional costs associated with the design, manufacture, transportation, purchase, or sale of precious metals, such as packaging, shipping, handling, or insurance.
Why do I have to pay over spot for silver? ›
You'll always have to pay a small premium, which varies based on the type of item and market conditions. Bullion premiums over spot cover the cost of refining, minting, distribution, and a profit for the dealer or dealers involved.
Can you buy silver under spot price? ›
So, how do you buy Silver at spot price? The short answer is…you normally can't. There will always be a premium involved for vendor costs, refinement costs, shipping, handling and more.
Can you buy the spot price of gold? ›
The reality is that under normal circ*mstances gold and silver cannot be bought at the spot price. The reason for this is the fact that dealers charge markups and the dealer also has a buy price and sell price spread.
How much gold or silver can I buy without reporting? ›
The answer is that there is no limit on how much gold you can purchase without reporting it. However, any sale of precious metals, including gold coins, must be reported on your tax return. So, while there is no limit on how much gold you can purchase, you will still need to report any sales to the IRS.
How much silver can you buy without reporting to government? ›
As mentioned above, to avoid the tax in the state of California, you must make a purchase of more than $1,500. This applies only to gold and silver, and only if the purchase was from one dealer.
What percentage over spot should I pay for silver? ›
Quantity also counts. Usually, you see lower premiums on bulk orders. Bulk usually meaning something north of 10 ounces (or units), and typically closer to 100 ounces (or units) and up. A fair premium for silver bars is typically 5% to 8%, while silver coins usually trade for 12% to 20% premiums above spot.
Can silver be sold for cash? ›
Like gold, silver is a valuable precious metal that you can sell for cash when needed. If you own silver coins, bars, or jewelry, selling to a trustworthy dealer can get you a sum of money to put toward a car down payment, pay for a milestone event, or invest in a different precious metal like gold.
How to buy silver without premium? ›
You can buy silver in a number of ways: ETFs, silver stocks, or physical silver bullion in the form of bars, coins or rounds. Investing in ETFs lets you avoid the high premium costs and fees associated with bullion storage.
What does over spot mean when buying gold? ›
Premium over spot indicates what the mark up is for a particular bullion product over what the current market price per ounce is for that particular metal type. For example, if Gold is trading at $2,000 per ounce on the market but the Gold coin you want is selling for $2020, then the premium is $20.
It is almost impossible to buy silver, gold, and other precious metals at spot price because the spot price does not take into account the additional costs associated with the design, manufacture, transportation, purchase, or sale of precious metals, such as packaging, shipping, handling, or insurance.
What is the best 1 oz gold coin to buy? ›
Here are 10 of the best gold coins to buy based on their uniqueness, rarity, and popularity among investors.
- Gold American Eagle.
- American Gold Buffalo.
- South African Gold Krugerrand.
- Canadian Gold Maple Leaf.
- Gold Britannia.
- Gold Austrian Philharmonic.
- Gold Australian Kangaroo.
- Chinese Gold Panda.
Gold prices are set by several banks, an oversight committee, and a panel of internal and external chair members, who calculate the figures based on supply and demand in the gold futures derivative markets and establish averages for both the spot price and the fixed price.
How does IRS know you sold gold? ›
Dealer Reporting
Under certain circ*mstances, a dealer is required to file a form 1099-B with the IRS to report proceeds paid to a non-corporate seller of precious metals. This helps the IRS determine whether the sellers have properly reported this income on their tax returns.
Does the government know if I buy gold? ›
Do I have to report my gold coin purchases to the Government ? No, there is no branch of federal, state, or local government that is interested in how much gold you might own. The U.S.
How much gold can a US citizen own? ›
Physical gold. According to the CBDT's most recent circular, men, regardless of marital status, are only allowed to possess 100 g of real gold in the form of jewelry and ornaments. Married women are allowed to possess 500 g, unmarried women 250 g, and men 500 g.
When you buy gold is it tracked? ›
Will the Government Find Out I Am Buying Precious Metals? Bullion investors like their privacy. The off-the-grid nature of physical gold and silver is one of the metals' most attractive features. They cannot be tracked electronically, and, in this age of government surveillance, that is increasingly important.
What gold coins are tax free? ›
Government-issued coins with a face value, such as American Silver Eagles and American Gold Eagles, are exempt from any sales taxes. This is because they are legal tender money and are priced based on the value of their metal content rather than any numismatic value.
How much of your wealth should be in gold and silver? ›
GuruFocus.com suggests an overall 10–20% allocation of precious metals, with silver making up a 30% share of that allocation if you're aiming to preserve wealth. “Silver and gold belong in every balanced portfolio. There's no magic percentage of silver and gold you should include,” GuruFocus.com advises.
How much silver is in $100 face value? ›
These coins were common in circulation until silver was removed from US coinage in 1965. Comprised of 90% silver, 10% copper; each dollar of face value contains about 0.715 troy ounces of silver. Packaged in canvas bags of 1000 coins ($100 face value per bag; about 71.5 troy ounces of pure silver).
Live Metal Spot Price (24hrs) May 26, 2023 at 09:46 EST
| Silver Spot Prices | Today | Change |
|---|
| Silver Price Per Ounce | $23.4 | 0.45 |
| Silver Price Per Gram | $0.75 | 0.01 |
| Silver Price Per Kilo | $752.33 | 14.47 |
They go to a bank, buy rolls of coins and then sort through them, looking for coins from certain years that contain silver. If they can find just one or two old silver coins, they can recycle them and make money. And the more coin rolls they buy, the more money they make.
Will banks buy your silver? ›
Banks usually avoid selling precious metals because of their price fluctuations. And even if a bank does sell gold or silver, their inventories typically don't measure up to the size and variety of inventory found at precious metals companies and other sellers.
Is silver hard to sell? ›
Officially Minted Silver Coins Appeal to Buyers Worldwide
Silver coins are considered the easiest to sell, since it's fairly easy to quickly liquidate (i.e., get cash for) coins.
How much silver can I legally own? ›
995 and the total purchase quantity must be 1 kilo (32.15 troy ounces) or more. Similarly, for sales of silver bars and rounds to warrant reporting, each silver piece needs to possess a fineness of at least . 999 with a total purchase quantity of 1,000 troy ounces or more.
Is it better to buy silver coins or bars? ›
Silver coins offer several advantages over investing in silver bars, such as easier selling of smaller quantities at once, higher resale value due to collectible value and rarity factors, and better protection against counterfeiting or fraudulent products.
How much over spot should I pay for gold bars? ›
On average, you should expect to pay between 2 and 5 percent over spot, according to precious metals dealer Kitco. Find a different dealer if you're asked to pay more than that, and don't get lured in by pitches for “special deals” from private mints.
Why are over spot prices so high? ›
The live spot prices move up and down in relation to supply and demand. During periods of increased demand, Precious Metal dealers may need to charge a premium that is higher than normal. This is because there are fewer sellers willing to sell Precious Metal bullion at spot price during periods of high demand.
Why does gold cost more than spot price? ›
Premiums are added onto the spot price of gold for a variety of reasons. These are usually due to the costs associated with the acquiring, and manufacturing of the metals. The gold and silver bullion dealer must also make a profit.
How much is a 1 oz gold eagle today? ›
Live Prices
| Order Value | Price | Premium |
|---|
| $ 1 - $ 136,999 | $ 2,084.31 | 6.00% |
| $ 137,000 - $ 342,999 | $ 2,080.38 | 5.80% |
| $ 343,000 - $ 684,999 | $ 2,077.80 | 5.67% |
| $ 685,000 - $ 1,368,999 | $ 2,075.18 | 5.53% |
1 more rowThe primary distinction between spot and futures prices is that spot prices are for immediate purchase and sale, whereas futures contracts postpone payment and delivery to predetermined future dates. Contango is the term you'll encounter when you see that the spot price is typically lower than the futures price.
What is the cheapest form of gold to buy? ›
Pure Gold Bullion Bars Are Cheaper Because of the Lower Premium. Buying in bulk allows you to pay a lower premium over the spot price. The same applies to silver. For this reason, gold coins generally cost more than gold bars.
Is it better to buy gold coins or bars? ›
Gold coins are known to have more sentimental value than gold bars both historically and culturally. Simply put, gold coins can be more ideal for you than gold bars if you want to invest in something with a more historical and cultural value. Again, gold coins have more collectible value than gold bars.
What is the safest gold coin to buy? ›
Consisting of 91.67 percent gold, the American Gold Eagle gold coin leads the pack of the top investment coins. It's “safe” as well, since the weight is backed by the U.S. government. In 2021, these coins were redesigned to include enhanced counterfeiting measures.
What is the most popular gold coin to collect? ›
The most traded gold coin in the world is the American Gold Eagle, which is produced by the United States Mint. The American Gold Eagle was first introduced in 1986 and has since become one of the most popular and widely recognized gold coins in the world.
What will gold be worth in 5 years? ›
Gold price predictions for next 5 years: experts' analysis
The banking group saw the precious metal trading at $2,000 at the end of 2023, accelerating to $2,075 by September 2024. A poll of 38 analysts conducted by Reuters in January was less optimistic as they expected the gold price to average at $1,890 in 2024.
Will gold go up in 2023? ›
Gold has been one of the best asset classes in 2023 so far and barring intermittent profit-booking, the yellow metal may continue enjoying investors' favour this year mainly because of the uncertainty around global economic growth.
Who is the main buyer of gold? ›
Turkey bought 23 tonnes of gold in January, making it the biggest buyer of the precious metal among central banks globally over the period. The country now holds 565 tonnes of gold, the highest level on record, according to data from the World Gold Council.
Is gold taxable when you sell it? ›
The tax that you pay when selling gold is the same as your regular income tax rate. If you held the gains on collectibles longer than a year, that rate maxes out at 28 percent.
How can I avoid paying taxes on gold? ›
If you sell an investment less than 12 months after buying it, the IRS considers it a short-term capital gain. These are taxed with ordinary income, meaning that your profits won't qualify for the special, lower capital gains tax brackets. To avoid this, sell your investments after at least one year, if possible.
Write-Off Limits for Losses
The maximum amount of loss the IRS allows you to apply to your taxable income with regard to precious metals is $3,000. If you lost more than this amount on gold you bought and then sold, the remaining losses beyond $3,000 can be carried over to the next tax year.
How much gold can I own without reporting it? ›
Many wonder how much gold they can buy without reporting it to the IRS. The answer is that there is no limit on how much gold you can purchase without reporting it. However, any sale of precious metals, including gold coins, must be reported on your tax return.
Can the US government confiscate your gold? ›
Under current federal law, gold bullion can be confiscated by the federal government in times of national crisis. As collectibles, rare coins do not fall within the provisions permitting confiscation.
Do banks check gold? ›
The way a gold loan works is: Checking the quality: When a customer approaches a financial institution for a gold loan, the first step the institution takes is to check the purity of the gold jewelry that is being considered as collateral along with determination of value of the jewelry.
What percentage of Americans own gold or silver? ›
New Survey Reveals 10.8% of The American Population Owns Gold, While 11.6% Owns Silver. A new survey highlights what the average American feels towards ownership of the precious metals.
How much physical gold should I own? ›
Consequently, conventional wisdom recommends holding no more than 10% of your portfolio in gold as part of a well-balanced portfolio. Allocating a slice of gold to your portfolio may help to hedge against inflation. That's because gold has an inverse relationship with the dollar.
When could US citizens own gold again? ›
These prohibitions were relaxed starting in 1964 – gold certificates were again allowed for private investors on April 24, 1964, although the obligation to pay the certificate holder on demand in gold specie would not be honored. By 1975, Americans could again freely own and trade gold.
Why pay more than spot price? ›
The live spot prices move up and down in relation to supply and demand. During periods of increased demand, Precious Metal dealers may need to charge a premium that is higher than normal. This is because there are fewer sellers willing to sell Precious Metal bullion at spot price during periods of high demand.
How much does it cost to buy silver over spot? ›
Monex Live Silver Spot Prices
| Silver Spot Prices | Today | Change |
|---|
| Silver Prices Per Ounce | $23.59 | -0.09 |
| Silver Prices Per Gram | $0.76 | 0.00 |
| Silver Prices Per Kilo | $758.42 | -2.89 |
You can offload a silver bars collection to reputable bullion dealer for a price close to spot. These dealers normally take those bars and sell them at a premium over spot, profiting the difference. If the demand is high enough, they may even be willing to pay over spot.
The primary disadvantage of using only Spot Trades is that you're subject to the exchange rate on the day of your payments. The day you send or receive an international payment may or may not have a favorable exchange rate for you.
Why are 10 oz silver bars different prices? ›
Obviously, the greater the weight, the greater the value of the bar. Typically, silver bars are weighed in either grams, ounces, or kilograms. These different weights provide a large selection for each potential buyer to choose from, depending on how much capital the buyer has.
What happens when spot price is higher than future price? ›
Backwardation is when the current price, or spot price, of an underlying asset is higher than prices trading in the futures market.
Will silver go over $100 an ounce? ›
Many experts in the space expect silver to perform strongly in the years to come, but don't necessarily see it reaching US$100 or more, especially given the current macroeconomic conditions.
What was the highest spot price for silver ever? ›
On January 18, 1980, silver reached an all-time high price of $49.45/troy ounce.
How much is 30 pieces of silver worth today? ›
At spot valuation of $28/ozt in 2021, 30 "pieces of silver" would be worth approximately $91 to $441 in present-day value (USD) depending on which coin was used.
How much can I sell 1 oz of silver for? ›
Live Metal Spot Price (24hrs) Jun 08, 2023 at 12:09 EST
| Silver Spot Prices | Today | Change |
|---|
| Silver Price Per Ounce | $24.38 | 0.73 |
| Silver Price Per Gram | $0.78 | 0.02 |
| Silver Price Per Kilo | $783.84 | 23.47 |
California. California sales tax is collected on specific products listed below: Non-monetized bullion consisting of copper, platinum, or palladium. Single sales of “monetized bullion”, non-monetized gold or silver bullion, or numismatic coins less than $1,500 USD.
What year was gold the cheapest? ›
In 2000 the price of gold was at its lowest since 1990, with a troy ounce of gold costing 274.5 U.S. dollars in that year.
Can I sell silver without paying taxes? ›
Tax Implications of Selling Physical Gold or Silver
Holdings in these metals, regardless of their form—such as bullion coins, bullion bars, rare coinage, or ingots—are subject to capital gains tax. The capital gains tax is only owed after the sale of such holdings and if the holdings were held for more than one year.
