How much over spot is considered normal?

[Atag90]

Hello everyone!

I'm new to investing in silver and was just wondering, how much over the spot price is considered normal? On go-to-silver, I calculated the price to be 32-37% above spot when buying in quantities of 25 or higher. Is that considered normal or a rip-off?

Any help would be greatly appreciated. Thanks for your time.

[Norskgeld]

Cost of 1oz coin is about £20.54

Spot Price is about £11

That's almost a 100% mark up.

20% of that is VAT which means an almost 80% premium (inc p&p)

Yes it's normal (actually 37% is a bargain)!!! and yes it's a rip off...buy gold Sovereigns.😀

[Atag90]

If that's normal (and a rip off), how is silver a good investment? Will the price of silver even go up 37% in 30-40 years when you're ready to retire?

[Mark10110]

10 minutes ago, Atag90 said:

If that's normal (and a rip off), how is silver a good investment? Will the price of silver even go up 37% in 30-40 years when you're ready to retire?

its not really about if the "price will go up" its about will the dollar/Euro/GBP value go down?

judging by every fiat track record through all history.... yes.

stacking silver is more about preserving value rather than leaving it in a bank while inflation makes the chomp or the milky bar go from 10p to 30p in 7 years. 

 

I want a lot of chomps when i retire.

[Atag90]

I see, that makes sense now.

So how much over spot is considered too much? 

[Mark10110]

I am not an expert in how the economy works but from what I can try and gather, because some countrys currency is failing they are buying USD which is giving the impression that the dollar is getting stronger and makes it look like gold and silver are going down in price.

I am only a student in economics so if there is anyone here that can correct me and point me in the right direction please let me know.

[mr-dead]

if you dont like high premiums buy low premium, VAT free gold.  Legal tender coins are also capital gains free.

Sovereigns can be picked up 3.5% over spot:

https://www.hattongardenmetals.com/buy/

 

[Mark10110]

1 minute ago, Atag90 said:

I see, that makes sense now.

So how much over spot is considered too much? 

how much over spot is too much? thats subjective. Some people pay anything like a 500% premium on a coin because of its design/limited edition etc. 

You can get gold and silver pretty close to spot on forums if you are quick in the silver trading threads.

@arshimo2012 sells silver sometimes as bullion not too much over spot.

But to answer your question of how much over spot is too much? Depends on who you ask

[Atag90]

1 minute ago, mr-dead said:

if you dont like high premiums buy low premium, VAT free gold.  Legal tender coins are also capital gains free.

Sovereigns can be picked up 3.5% over spot:

https://www.hattongardenmetals.com/buy/

 

Yeah, I was thinking about just getting gold instead. I would ideally get a bit of both though.

[Blockhead]

Depends on the weight, number produced, finish and numismatic characteristics of the silver. On single brand new 1 ounce items from the UK that were chosen just for their price and nothing else I would expect to pay maybe 20% over spot after delivery included. 

If I were buying a single 1oz silver coin or bar and just wanted the cheapest I could get then I'd be looking at second hand silver to avoid vat on the full price of the item and maybe even seek out items with blemishes to get rock bottom prices. 

And presumably buying bulk 1oz items in the way I described will save you even more. Then there's buying from the EU to avoid vat altogether - buying bulk will help to reduce the potential increased shipping costs. 

1kg silver bars are probably the lowest premium that's commonly available. You can usually find a brand new bar in this size for a fair bit less than £500 delivered based on prices over the last few months. 

[Norskgeld]

14 minutes ago, Atag90 said:

If that's normal (and a rip off), how is silver a good investment? Will the price of silver even go up 37% in 30-40 years when you're ready to retire?

I retire in about 9 years and I stack gold as a method of protecting the value of my money. 

The premium on gold is much lower than on silver and no VAT.

I really don't expect to "make" any profit at all just not losing value would be a result.

In 9 years you can guarantee "money" will be worth less than it is now.

Yes, the gold price might drop also but it is a risk I am prepared to take and I'm having fun buying coins.

The only silver coins I would consider buying are graded and slabbed numismatic coins.

Bullion silver doesn't interest me at all as an investment.

[Abyss]

Done some calculations on current spot rates for GBP/EURO/Silver worked out that silver 16.5% premium over spot

Cheapest 1oz capital gains tax free exempt from VAT coin 1 oz silver BRITANNIA 2018 from Goldsilver.be https://goldsilver.be/en/1-oz-30-gr/1558-1-oz-silver-britannia-2018.html

Silver price in GBP £10.992 oz

EURO GBP 0.90096

1 oz silver BRITANNIA 2018 from Goldsilver.be €14.61 works out at £13.16 spot silver price £10.992 = 16.5% over spot. Work out percentage on gold using the same 1 oz BRITANNIA 2018 2.5% over spot

Excluding currency conversion and shipping costs.

[Atag90]

I calculated my 32-37% based on 25-100 1oz coins including shipping but VAT free. 

[SilverGentleman]

Out of interest, does anyone know of any good websites where one can buy Silver bars in Europe? It is something that I think the Americans do much better and also have a larger variety of them, which does make me kinda jealous.

But to answer your question @Atag90, as someone who only started stacking a few months ago, I try to find government issue bullion coins that are within 20-25% over the spot price, depending on the website of course (if there is coin I like on one website which isn't available on another I will bite the bullet for the difference in cents). Anything that exceeds that ratio is a 'luxury' purchase to me, which I don't do very often or buy a lot of. For example, I just bought the Tiger and Dragon coin from the Perth because I have the previous coin and would like to continue that collection, so I am willing to pay a high premium for it.

The main thing here is to figure what you want to do (primarily collect coins or stack weight) and figure out your budget to do so.

 

(Edited some spelling mistakes)

[Lowlow]

On 05/09/2018 at 14:55, Atag90 said:

Hello everyone!

I'm new to investing in silver and was just wondering, how much over the spot price is considered normal? On go-to-silver, I calculated the price to be 32-37% above spot when buying in quantities of 25 or higher. Is that considered normal or a rip-off?

Any help would be greatly appreciated. Thanks for your time.

There are two basic ways to think about it.

1) Spot + a premium = final price

2) Physical market - Spot = premium

Those seem like they are saying the same thing, but they are different ways of thinking.  Basically the spot market and the physical market have nothing to do with one another in the short term, but tend towards each other over the long time.  Example, when the spot price falls rapidly, the premium on coins goes up ... but all that really means is that the physical price stays the same, and as spot falls, it APPEARS as if the premium is going up because nobody wants to sell their physical for spot anymore.  The markets effectively become disconnected.  That's the meta of it.

Per item prices also vary.  Obviously nice stuff is higher in price, things that take more time and energy to make, are packaged better, are prettier, more rare, take more labor to make, etc, demand a higher premium over spot.  But again, all that really means is they cost more, which obviously they do, and that can be expressed as a premium over spot but in some cases may have absolutely nothing to do with the spot price.  Old/ancient coins, for example, have value that has absolutely nothing to do with the price of silver, nobody cares what the price of silver is when they are buying a silver coin with Nero's face on it from 50AD.  The price of silver content (it's melt value is unimportant).

So ... yeah, it depends on what it is.

Silver rounds in quantity tend to be about 1$us/oz over spot or so

90% junk silver tends to be about 1.50$us to 2$us/oz over spot depending on the coins.

90% mercury dimes tend to be about 2.50$us/oz over spot or there'bouts

Fancy silver rounds might be 3-5$us/oz over spot, with super fancy ones being even higher

Etc, etc ...

Until you get to jewelry with gems, etc, which can be so much over spot that spot isn't even the main component of the price anymore.

[CadmiumGreen]

...and it is good to have @Lowlow back with valued insightful perspectives!

[Lowlow]

On 06/09/2018 at 12:45, SilverGentleman said:

Out of interest, does anyone know of any good websites where one can buy Silver bars in Europe? It is something that I think the Americans do much better and also have a larger variety of them, which does make me kinda jealous.

 

For us (Americans) silver and gold are treated the same way in terms of taxes, and as I understand it that is not true in Europe, and I think that accounts for the difference.  Yes, you can buy silver in Europe, but I think you pay full VAT on that.  Gold bullion, on the other hand, is as I understand it not subject to VAT, and that has had the effect of distorting the European precious metals market in a way that has not happened in the United States.  It's simply not as economical for Europeans to stack silver as it is for them to stack gold because they are paying a tax on silver.

[Iamdeadboy]

Today I paid 21.56 per coin for a tube of Maples... So 2.56 over spot did I get hosed?

[vand]

On 05/09/2018 at 19:55, Atag90 said:

Hello everyone!

I'm new to investing in silver and was just wondering, how much over the spot price is considered normal? On go-to-silver, I calculated the price to be 32-37% above spot when buying in quantities of 25 or higher. Is that considered normal or a rip-off?

Any help would be greatly appreciated. Thanks for your time.

32%+ over spot is much more than I would want to pay on most coins.

For current year BU stuff there really is no reason to pay more than about 15-20% imo.

You may think that a more expensive coin is only another $2-3 in premium, but over thousands of coins that adds up to a lot of extra Oz.

 

 

I know that you can look to recoup the premiums by selling on the secondary market, but that is also a bit of a further discussion. If you are stacking then at least a good proportion of your stack should be purely for weight.

[Attilio]

On 05/09/2018 at 21:51, Atag90 said:

Yeah, I was thinking about just getting gold instead. I would ideally get a bit of both though.

I think that's wise,both have their advantages.

[Attilio]

On 15/09/2018 at 01:44, Lowlow said:

For us (Americans) silver and gold are treated the same way in terms of taxes, and as I understand it that is not true in Europe, and I think that accounts for the difference.  Yes, you can buy silver in Europe, but I think you pay full VAT on that.  Gold bullion, on the other hand, is as I understand it not subject to VAT, and that has had the effect of distorting the European precious metals market in a way that has not happened in the United States.  It's simply not as economical for Europeans to stack silver as it is for them to stack gold because they are paying a tax on silver.

That's because you are a citizen of your country,we are subjects. 

[Groundup]

Anyone got a simple equation to work out premium over spot, without delivery. Thanks.

[vand]

8 minutes ago, Groundup said:

Anyone got a simple equation to work out premium over spot, without delivery. Thanks.

100* (Coin price / Spot price )-1 

I know, I know, mathematical genius.

 

[Groundup]

36 minutes ago, vand said:

100* (Coin price / Spot price )-1 

I know, I know, mathematical genius.

 

I should have said in percentage

[vand]

1 hour ago, Groundup said:

I should have said in percentage

add a % sign at the end!