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Bimetallic

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  1. You can do any amount with most ETFs and vaulted outfits. It doesn't have to be large, and you'll make a lot more money if spot climbs than you will buying retail right now. I don't know too much about VAT in the UK. Most silver is subject to VAT. I know you can avoid it if you use a vaulted service outside the UK or EU. Some manufacturers are more prestigious than others, like PAMP Suisse. One differentiator is whether the refiner is on the LBMA Good Delivery list. Those products tend to be worth slightly more than random refiners not on the GD list. It also depends on beauty and demand. GD list membership also matters for tax exemptions in some jurisdictions. For example, to be exempt in Singapore the silver has to be made by a GD refiner, or be on their list of national minted coins. Newer coins are generally worth more because they've been handled less. The general assumption when you buy current year coins from dealers is that those coins are brand new, never touched by previous owners. Prior year coins are considered "secondary market" and worth a bit less. Assuming they're not certified, you never know whether there will be scratches or other issues. (And certified or "slabbed" coins cost vastly more – the premiums with silver coins can be 100%.) Some dealers in the US have adopted a gimmick where they guarantee that a coin or tube has come straight from the mint and never been owned. They put a special seal on it or completely seal the coin in a hard plastic container. It's usually called MintCertified or MintDirect or something along those lines. They charge an extra premium for them.
  2. SIVR is cheaper than SLV, at 0.30% vs 0.50% ER.
  3. SIVR and USV are the cheapest I've found. I also recommend checking BullionVault and OneGold. They're excellent allocated vaulted outfits, and they might be cheaper than ETFs – not sure.
  4. 1. If you can afford gold coins, you can afford gold bars, since they come in similar sizes. For example, there are fractional gold coins in tenth ounce and quarter ounce sizes (and 1/20 ounce in some cases, like the Maple Leaf). Similarly, there are lots of bars in 1, 2.5, 5, and 10 gram sizes. A tenth of a troy ounce is 3.1 grams. (Premiums are higher on fractional bullion.) 2. The easiest to trade, or most liquid, are 1 oz in both gold and silver. VJ mentioned 10 oz bars. Those are only common for silver. There are 10 oz gold bars, but they cost more than $16,000 at current spot, so that's rarefied territory. They'll be harder to sell since few people can afford them, and dealers will be nervous about counterfeits (google 10 oz PAMP bar counterfeit New York). For silver, 10 oz and kilo bars are fine, but 1 oz is the most common. 3. It's a mistake to buy retail physical bullion right now, if you can even find any in stock. Premiums are temporarily insane because of an explosion in demand due to the pandemic. You'll lose money on those premiums. See my comprehensive spreadsheet of dealer premiums from before the pandemic – it will give you an idea of the norm in the US, which isn't much different from the UK in normal times, except for VAT. 4. Contrary to some on this forum, I think it's very smart to buy allocated vaulted bullion, especially now. Or gold and silver ETFs. As spot price climbs, they're almost pure profit. Right now if you buy retail physical you won't profit from an increase in spot price, because of the inflated premiums you'd have to pay. I recommend BullionVault (which has a London vault), and OneGold (a joint APMEX and Sprott venture). They have the lowest fees. BullionVault charges 0.5% commission on transactions, 0.12% per year storage for gold, and 0.48% per year storage for silver. I think OneGold is normally cheaper, but they might have increased their fees due to the surge in demand. Either one is massively better than retail physical premiums right now, as are ETFs.
  5. Major dealers are fully hedged. They don't need to be mindful of their original cost so much.
  6. HH is right about a surge in demand causing the spike in premiums, though I'm not sure what liquidity he's referring to. It's also true that a drop in spot price can lead to higher relative premiums – percentage over spot. This is because sellers need to protect their margins, starting with mints and refineries. Some mints charge a flat amount over spot, not a percentage. For example, the US Mint charges $2.00 over spot per Silver Eagle coin. This sets the floor on premiums – in normal times, the best American dealers charge a little over $3.00 over spot for a single ASE (volumes less than a tube of 20). If spot falls from $16.00 to $12.00, the $2.00 flat upcharge grows from a 12.5% premium to 16.7%. And a $3.25 retail premium grows from 20% to 27% just from that drop in spot. For low priced bullion like silver, sellers are more protective of their margins. They might decide that they need to make something like $2.00 per ounce. So when spot falls, sometimes the premiums don't change much, which makes them larger as a percentage. This's different from gold, which tends to maintain relative premiums better since there's a lot more to work with. The US Mint doesn't charge a flat fee over spot for Gold Eagles, for example – they charge 3%, so you're more likely to see premiums shrink in dollar terms when gold spot falls. Premiums don't generally increase in dollar terms when spot falls. But this fall was very sudden and happened along with a huge surge in demand for retail physical silver. I think all the major American dealers broke sales records.
  7. Bimetallic

    Lowest premium

    If you can hit 5% premium on kilo bars, that's the ticket. It should be roughly the same premium for all of your stipulated amounts because once you're in the thousands of pounds you're in low premium territory. Kilo bars are among the lowest premium forms of silver. 100 oz bars should only be very slightly cheaper per ounce. A kilo bar is 32.15 troy ounces, so it's much less than £1,000. At current spot price, you'd want to pay something like £382 for one, before taxes. Buying several at once will shave a bit off the price at many dealers. These prices aren't available right now because of the explosion in demand. Hopefully premiums will return to normal in a few weeks or months. In the US premiums on kilo bars were as low as 4% before the virus, at least at the better dealers. Your VAT will of course add a lot to the price.
  8. Hi all — Many jurisdictions exempt silver bullion from consumption taxes like VAT and sales taxes, and many don't. I'm interested in your feedback on how such an exemption should be designed. For the reasons given below, it's probably not as simple as just saying "exempt all bullion". For one thing, laws generally need to define their terms and clarify ambiguities. I'm going to assimilate all the feedback before I prepare to lobby some US state legislatures to enact or revise silver sales tax exemptions. Note that there are two rationales for exempting silver. 1) It's an investment, and we don't levy consumption taxes on investments (e.g. stocks and bonds). 2) It's a monetary equivalent, or at least similar to money, and we don't levy consumption taxes on money (e.g. currency exchange). Given those rationales, the type of silver that most merits an exemption is standard silver bullion: ungraded coins, bars, and rounds. Things get murkier when we move to graded, slabbed coins, and high premium proofs, commemoratives, limited editions, Marvel superhero coins, silver bullets, trinkets, and doodads. A lot of that stuff can be classified as collectibles and toys, and therefore the sort of consumption that economists would recommend levying consumption taxes on. However, for now I think the silver content of just about anything should be exempt. So I've landed on a formula that takes melt value and adds a premium allowance. The premium allowance would be sized to fully exempt standard bullion, while triggering tax on the increment above the allowance, if any. One advantage of this approach is that we don't have to define what is and is not standard bullion – the formula handles that for us. Examples: Let's say our allowance is 25%, so 1.25 × melt value would be tax exempt. With spot at say $18.00, anything priced at $22.50 or below per ounce would be exempt. Under normal circumstances, that would comfortably exempt ASE, the highest premium coins, in North America at least. But a graded, slabbed ASE priced at $38.00 would trigger tax on the increment above $22.50. Same with a Nuie Marvel superhero coin costing $55.00. What do you think of the melt + premium allowance approach? Can you think of better approaches? (I have some modifications designed to exempt fractional silver, which tends to have much higher premiums but is still standard bullion.) This approach would operate similarly for both sales tax jurisdictions (USA) and VAT/GST jurisdictions (everywhere else). Thanks.
  9. Bimetallic

    Silver spoons

    Hi all – Man, it's getting crazy out there. I just noticed that SD Bullion in the US is selling silver spoons now. They're selling a 500 net oz lot at $16.72 per ounce (they list spot as $14.73). Not terrible, but still higher than normal premiums for high volume 999 bullion, much less spoons. They're also selling a "MintCertified" tubes of 2020 Silver Eagles for $520.48, or $26.024 per coin. Ouch. That's a 77% premium, and that's for a tube of 20. This "MintCertified" business is a trend with major dealers in the US. They basically take a normal mint tube, slap a sticker on it, and jack up the price. Here's how APMEX describes their version, called "MintDirect": (APMEX is charging $31.73 per coin for their MintDirect tubes of 2020 ASE. That's a 115% premium...)
  10. Bimetallic

    OneGold

    Hi all – OneGold looks interesting. It's a vaulted silver product by APMEX and Sprott, with a very slick trading app (they also offer gold and platinum). It looks like they come close to BullionVault prices, but we'll find out how close below. It seems like a good way to make bank if you think silver spot is going to significantly increase – you don't have to eat the huge premiums on retail physical right now. The vault is in the US, but OneGold also offers something called VaultChain stored at the Royal Canadian Mint. So I was curious about pricing compared to BullionVault. Here's what I found. OneGold: Their buy price is $14.95 right now. Spread is 46 cents and premium is 22 cents per ounce ("or 150bps" – I don't know what that is). Storage is 0.30% per year. BullionVault: Buy price is $14.65 right now. Commission is 0.50% per transaction and storage is 0.48% per year. Note that silver Ask price is $14.48 right now according to SilverPrice.org and $14.69 according to JM Bullion. (Don't get me started on all these inconsistent spot prices for silver....) So one ounce at OneGold would cost $14.95 + 22 cents = $15.17 + storage. One ounce at BullionVault would cost $14.65 * 1.05 = $15.38 + storage. That's a surprise. I thought BullionVault would win for sure. One hitch I don't know is how storage is calculated by either one. Is it the purchase price of the metal? (Including premiums and commissions?) Or the current spot price – always changing? I have no idea, but it looks like OneGold wins. Let me know if I missed anything. Edit: Security: OneGold is insured by Lloyd's of London. BullionVault has daily third-party audits that they post. Not sure what their insurance situation is, nor am I clear on OneGold's audit situation.
  11. Hi all – I'm seeing significantly different silver spot prices from different sources and dealers. Here's what I found when I took a snapshot at 12:11 GMT/UTC today, March 26, 2020. All prices were with seven seconds of each other, and none of them changed significantly in the ensuing 30 seconds. These are all Ask prices as far as I can tell, which is the most relevant price: SilverPrice.org: $14.42 JM Bullion: $14.74 GoldPrice.com: $14.70 APMEX: $14.84 Kitco Spot: $14.54 These differences are too large. I assume they're all supposed to be COMEX prices. Something is out of whack here. What's particularly disturbing is how much higher the dealer-quoted spot price is compared to the non-dealer sources. The difference between APMEX's quoted silver spot and SilverPrice.org is 42 cents! And JM Bullion is 32 cents over. Differences that large don't make any sense, even if the quotes are a full minute or two delayed compared to SilverPrice.org or Kitco's quote. Hell, even if they're ten minutes off, it wouldn't explain a 32 - 42 cent disparity – spot didn't move nearly that much in the ten minutes prior. The reason the dealer-quoted spot is troubling is that in both cases they're much higher than the true spot price. This would make their product prices look better than they are, because the premium over spot will look smaller than it actually is... That's a problem. Do you think it's a coincidence that the dealer-quoted spot prices are higher than the correct value? Or intentional? This ties into my other post about where people are getting the silver spot price. No one seemed to know what the ultimate source was (e.g. COMEX or some other exchange). The disparities are annoying, as is the fact that it's hard to tell exactly where these different sources are getting their silver price.
  12. Hi all – I'm seeing people rationalize paying exorbitant premiums with kooky theories. There's no reason to light your money on fire by paying the current premiums for retail physical silver. If you pay $27.00 for a new American Silver Eagle, for example, that's an 80% premium over spot at the moment. You'll need the spot price to climb out of the deep hole you dug in order to ever break even on such a purchase, and it might never climb enough. In this scenario, you'd need spot to climb to $24 - $25 to sell that silver to a private party for $27, and probably $26 - $27 to sell it to a dealer at the price you paid. In the meantime, you're going to watch those premiums shrink and shrink, such that new ASEs will cost something like $22 even though spot is higher than it was when you paid $27 for ASE (normally, for an ASE price of $22 at the better dealers, like SD Bullion or Silver.com, spot will be around $18.50 or $19). The explosion in demand because of the virus caused retail physical silver premiums to explode in turn. I see people saying that the spot price and physical have "decoupled", as though this is some sort of permanent situation. That's nonsense. It's important to not be gullible when people are trying to sell you something. It would be smarter to wait for premiums to return to normal as demand normalizes. There's nothing permanent about these premiums, though they might be larger than normal for a few months given the fact that supply is going to be constrained due to mint shutdowns (e.g. the RCM is shut down for two weeks). The founder and CEO of JM Bullion was on the Silverbugs subreddit the other day explaining that they're always fully hedged re: silver spot price fluctuations, and that an explosion in demand is why premiums are out of whack (it's not due to them having to sell inventory that they paid much higher spot prices for – they're hedged). There are people in the silver stacking community who are always rationalizing paying a hefty premium, or really any price at all, based on kooky theories like that silver is going to explode any day now, and now this "decoupling" business. There's always a rationalization for everything that happens. When silver spot falls – or is stagnant – it's because of manipulation or some other conspiracy. The truth is usually simpler, and more mundane. In any case, it's not a good time to waste your money, on overpriced bullion or anything else – you might need it... If you think you need physical silver in-hand, that's one thing, but if you're buying silver as an investment or hedge, I would wait until premiums are normal so you don't dig yourself a huge hole. If you think silver is going to keep climbing, as it has for the last couple of days, you won't make any money off it by buying retail physical right now, because of the temporary premiums (unless silver punches well past its normal levels, to over $26 or so). I would just buy ETFs – they're pure profit as silver climbs, much more profitable than retail physical. If silver climbs to $20, for example, you've made no money if you bought retail physical right now, since you're paying so much that it was like spot was already $20 or more. Whereas you'd make a lot of profit on that rise if you were in an ETF, or even vaulted physical like BullionVault or Perth Mint. For example, BullionVault charges 0.48% per year to store silver, and 0.50% commission on transactions. Compare that to the 80% premium on ASE at APMEX... If you want to buy physical at some point, I recommend low priced dealers like Silver.com and SD Bullion (in North America, at least). For example, at APMEX preorders on 2020 ASE were $26.84 a minute ago, whereas at Silver.com in-stock 2019 ASE were $23.17. Much smaller hole at Silver.com. A 2020 ASE is only worth a few cents more than a 2019, not $3.67 more... But it's smart to wait. You can see what typical premiums were before the panic in my comprehensive spreadsheet. The figures are mostly from a month ago. I recorded spot in every case. Relative premiums are fairly stable across dealers – i.e. Silver.com and SD Bullion are usually the cheapest, no matter the day.
  13. Premiums are inflated now due to a sudden explosion of demand. It's foolish to pay these premiums.
  14. It's crazy to pay these premiums, and anyone who does is losing money. Claiming that there are two different silver prices is a good way to lose money.
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