Dealer Sale Price V Spot Price

[Alymac]

Okay, this is going to be a newbie question so apologies in advance!

Is there any ready reckon over if spot price is say £15.00 what dealer will sell say a 1oz bar or coin?

I appreciate that there are differing standards and I have likely paid well over the odds for my PAMP bars which I still say are truly stunning and satisfy the scrounge mcduck in me but is there any ready reckonor on what a dealer will charge over the spot price?

Again sorry if this is a stupid question!

Ally

[BackyardBullion]

It will depend entirely on the coin/bar and also which metal it is. 

My experience says the following:

SILVER

Most now hold some small premium above spot price - often because they have "limited mintages" even if it is 100,000 or more some times!

Most of the closest to spot coins are sold as bullion coins and these tend to be the really common and not collectable coins. Kangaroos, Britannias, Maple Leaf's etc.

Of those coins the price will vary hugely based on where you buy. If you buy from the UK and just want 1 coin most dealers will sell them at about £22 per coin - so a huge bump on the spot price (40-50% some times!) But the more you buy the cheaper it gets per coin. You will never escape the 20% VAT in the UK though so the very best you will get is probably Spot +25%

If you buy from a european dealer in enough volume to negate the impact of the shipping, with a favourable exchange rate you can pick up bullion grade coins for £17 per coin which works out at about spot +12% - this is about as good as you are ever going to get. 

Silver is always going to be more expensive than spot in the UK sadly. It is not the metal you want to buy if you even think there is a remote chance you will need to sell to release cash in the short term. Selling silver back to the dealers or to ebay you will be lucky to get your money back at best (and that is if you got the best deal from europe). It is a longer term investment for sure. 

GOLD

There is no VAT on gold so you can easily pick up gold coins/bars in the UK for spot + 2% - 5% from dealers like Hatton Garden Metals, Atkinsons etc. You have to pay for postage which increases it slightly but not by much. Buying gold from Europe can be done too but since the Bexit vote the exchange rate is not in our favour and more often you can get cheaper gold from the UK. 

You will also get better release of your money from gold. If there was an emergency and you wanted to sell your 1oz gold coin - you bought it for £1,020 (spot +2%) and now you need to sell it, you will get 98% spot from most dealers and on a private sale you will probably get spot or a little above. At worse you might lose 5% but more likely is you will keep your money. 

With a silver bullion grade coin, if you bought it in the UK for £20 per coin, you would struggle to sell that privately for more than £16 per coin. Bullion dealers would offer you probably £13 per coin at best if you were lucky! So you lose £7 per coin! = 30% loss.

Bottom line is, if you buy silver and gold, try not to sell it! Operate within your budget and wait for 30 years and you just cannot go wrong!

So many people think that Gold and Silver are get rich quick schemes like the stock market - they are not, they are a preservation of wealth medium that ultimately are very low risk!

Just my two cents - anyone who disagrees with me please feel free to share and/or leave feedback - I am always learning and this is what I have learned in my first 18 months of stacking!

[morezone]

Quote

bullion grade coins for £17 per coin which works out at about spot +12% 

21% (17/14).  Usually talking ~20% mark from dealers.

Just a quick look at UK dealers you're looking at £20 min when buying a handful so you're talking around 40% from the large dealers paying VAT.  Add on postage and it's closer to 50%.

In summary, expect to pay ~20% premium on a coin (closer to 25% with postage etc) and if buying from a UK dealer, add on another 20% for the VAT.

For limited mintages and collectibles you can expect an even higher premium.