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Which silver is best to buy when price is so low?


intelinside

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I noticed that paying the premium on silver eagles is so large a percent of the cost of the silver content

 

 

like american silver eagle-- spot at $14:

if you're paying $17 each and the spot price is $14 then you're paying $3 over spot (21.4% over spot)

if the spot price was $50

if you're paying $53 per ASE then the its only 6%. 

So maybe when prices are high its better to buy Coins, and when silver spot price is low its better to buy bars?

 

So you can get a lot more silver at the cheap prices with bars and larger amounts ...this is assumiing the price will go up a lot on silver

10oz bar from random company is about $160 each spot on that is $140 (just using round number) so youre paying $20 over spot (14.28% over spot)

 

So you can't buy as much silver because the premiums youre paying are ruining your spending power?

 

Is my math right or what do others think?  I'm kind of a newbie

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Welcome.  You do pay a higher premium on Government minted coins, that's for sure.  The Government Mint workers have to be well payed after all.  That being said, I buy silver eagles on rare occasions when certain dealers have a sale on them.  Just have to keep your eyes open for them.  And since you can usually get some of the premium above spot back on eagles when you sell them,  if you pick them up on sale, they can then be a decent buy.  Best bang for the buck though is going to be private mint generic bars and rounds.  Those can easily be found for one fifth of the premium you would normally pay for a silver eagle.  And like anything else, bulk matters.  Buy in bigger size or larger quantity, and typical the premium added will be a lower percentage over spot.  My strategy has been to just check various dealers every week to see what they have on sale, and pick up whatever appeals to me at the time.

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I don't think there's really a right or wrong because it comes down to personal preference, but I do think that if you're primarily a stacker then its important that your stack has a large base of low premium silver that you are happy to liquidate without too much effort if and when you think the time is right. This is easier to do when spot price is bumping around near the bottom as most of us hope it is right now, so take advantage of the current situation. I think its more difficult if you start out buying higher premium coins and then try fill in the base of your stack later on, when prices might have moved higher. Building the pyramid from the base up is always easier and makes more sense.

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8 hours ago, intelinside said:

I noticed that paying the premium on silver eagles is so large a percent of the cost of the silver content

like american silver eagle-- spot at $14:

if you're paying $17 each and the spot price is $14 then you're paying $3 over spot (21.4% over spot)

if the spot price was $50

if you're paying $53 per ASE then the its only 6%. 

So maybe when prices are high its better to buy Coins, and when silver spot price is low its better to buy bars?

So you can get a lot more silver at the cheap prices with bars and larger amounts ...this is assumiing the price will go up a lot on silver

10oz bar from random company is about $160 each spot on that is $140 (just using round number) so youre paying $20 over spot (14.28% over spot)

No, the premiums don't change the rule to buy low and sell high. Don't buy anything when silver is at $50.

The reason Eagles seem to have a $3.00 premium whatever the spot price is that the US Mint sells them to its Authorized Purchasers for exactly $2.00 over spot per coin. The volume purchased doesn't matter – a firm could order 100,000 Eagles and it's still $2.00 over spot per coin.

You shouldn't be paying $160 for a 10 oz bar right now. You can get new ones for $153-156 from places like Silver.com and SDBullion.com. You have to buy from the cheapest dealers. Don't overpay for metal.

Good bars right now would be Royal Canadian Mint, Sunshine, Perth, Royal Mint (British) and A-Mark.

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Remember this: Buy low, sell high. The premium on eagles can be re-cooped when selling. Bars will normally sell for around a dollar under spot. Eagles will sell for anywhere between .50-$3.00 over spot depending on the buy sell spread at the point of sale. Phone first. If the price is rising it will be closer to the three dollar point and if its falling its closer to .50. Been there done that. Right now the premium bars like Johnson Matthey and Engelhard are the same as the generic bars so there is no reason not to get them. Keep your eyes open for sales, shop around. Last week JM bullion had the 2018 ASE for $2.39 over spot...

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Wow I'm surprised such great advice overall on this forum.  I can tell the experience ya'll have. Thanks.  

For now I'll lean towards the cheaper bullion like 10 oz bars, i'd like to pick up some ASE if I can get hem cheap so i'll be keeping eye out

I like some of the premium bars like these 10 oz ones that look like aged or 'poured silver bar look' like Scottsdale and SIlvertowne poured 'loafs' but they're like $170+ per 10 oz vs what I'm seeing $160 for other bars..t I'm guessing I wouldn't get that premium if i resell it in future or do you think i would?

I also like the Monarch Precious metals MPM silver at about $170/10 OZ bar

I just don't want my 'over spot price' to eat into my spending power now if i end up buying more bulk silver.  Like if I'm paying way over spot then just by common sense i'd be 'buying less'

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You won't get such a large premium back on Silvertowne bars. They're usually the cheapest bars at a lot of dealers, since they're ugly and poorly made. You might get a premium on Scottsdale bars – they're more prized, but also people have more concerns about fakes. A number of fake Scottsdale bars have been floating around, probably from China. Just look it up on YouTube.

I'm not sure on Monarch. More broadly, all of this depends on who you envision selling to in the future. You won't even get spot if you sell these bars to a local coin shop, since they have to sell them at a profit at at least spot. The only way to get your premium back is if you sell to an individual, maybe from a forum like this one. eBay commissions will eat your margin if you sell there and silver hasn't increased in price.

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Thanks bimetallic. I think I'm just liking certain brands over others.  I'm trying to keep buying and building my silver stack right now. mainly I'm going to buy 10 oz bars I think they give the most bang for your buck.    

 

The ASE I see are like $3 over spot right now because I'm only buying 2-20 at a time.  Not mass amounts buying at a time so I don't get those good $2 over spot premiums.  If I do end up seeing some lower over spot prices i'll buy some silver eagles cuz I do like them.

 

I actually just bought some Scottsdale bars on eBay from the Scottsdale account... so I hope they're real

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15 hours ago, intelinside said:

Thanks bimetallic. I think I'm just liking certain brands over others.  I'm trying to keep buying and building my silver stack right now. mainly I'm going to buy 10 oz bars I think they give the most bang for your buck.    

 

The ASE I see are like $3 over spot right now because I'm only buying 2-20 at a time.  Not mass amounts buying at a time so I don't get those good $2 over spot premiums.  If I do end up seeing some lower over spot prices i'll buy some silver eagles cuz I do like them.

 

I actually just bought some Scottsdale bars on eBay from the Scottsdale account... so I hope they're real

I'm publishing my price comparison article this week. You'll see that you can get new ASE for around $2.50 over spot from some dealers.

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On 11/12/2018 at 16:40, HelpingHands said:

When spot is low you could be better buying cheap bullion as you get a lot of weight for your fiat.

When spot is high you're probably better buying numismatics that won't lose too much value if spot crashes.

 

18 minutes ago, Bimetallic said:

I'm publishing my price comparison article this week. You'll see that you can get new ASE for around $2.50 over spot from some dealers.

Thanks I'll check that out bimetal

On 11/12/2018 at 20:13, STONE said:

Remember this: Buy low, sell high. The premium on eagles can be re-cooped when selling. Bars will normally sell for around a dollar under spot. Eagles will sell for anywhere between .50-$3.00 over spot depending on the buy sell spread at the point of sale. Phone first. If the price is rising it will be closer to the three dollar point and if its falling its closer to .50. Been there done that. Right now the premium bars like Johnson Matthey and Engelhard are the same as the generic bars so there is no reason not to get them. Keep your eyes open for sales, shop around. Last week JM bullion had the 2018 ASE for $2.39 over spot...

True buy low sell high as the main mantra.  This is good advice for long term... I don't want to get too excited as I have silver fever at the moment....it's just so....pretty :)

On 11/12/2018 at 16:40, HelpingHands said:

When spot is low you could be better buying cheap bullion as you get a lot of weight for your fiat.

When spot is high you're probably better buying numismatics that won't lose too much value if spot crashes.

@helpinghands simple and makes lots of common sense thanks I'll be following this in back of mind at all times for my stacking.

 

 

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6 hours ago, intelinside said:

So bullion from palladium and platinum are they sold under spot usually?  Like in the US where can u sell precious metals that are not silver/gold?  Does it make sense to invest in small amounts if you can't get spot when you resell?

I don't think any metal normally sells at spot from retail dealers. Spot is the price in formal high-volume trading on commodities markets. I think COMEX uses 100 oz bars as the trading unit – someone correct me if I'm wrong. To get metals at spot, you need to find a sale or promotion. I've heard some PM dealers will sometimes offer their house silver rounds or bars at spot as part of a promotion. I've never seen it for platinum group metals though.

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Don't we Brits just love the exchange of info from fellow USA stackers, debating the dollar over premium prices they have to fork out etc when we have to do our outmost to avoid a tax premium of 20%. Not only can our USA cousins buy cents over spot they can often get free delivery as well , not to mention the many second-hand coin shops where you can really get a bargain and not be screwed as we are over here.

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6 hours ago, Pete said:

Don't we Brits just love the exchange of info from fellow USA stackers, debating the dollar over premium prices they have to fork out etc when we have to do our outmost to avoid a tax premium of 20%. Not only can our USA cousins buy cents over spot they can often get free delivery as well , not to mention the many second-hand coin shops where you can really get a bargain and not be screwed as we are over here.

Hah! Is there any effort to reform the laws in Britain? Currencies and bullion shouldn't be taxed. That's just sound economics.

We Americans might have to start paying sales taxes on bullion in some states because of a recent Supreme Court decision about sales tax in ecommerce. Some states exempt bullion, and some don't. Of course sales taxes here are usually in the 7-8% range, depending on state, county, and city. We don't have any national sales tax or VAT, but I'd take a VAT if it replaced all income taxes. I don't know how you Brits manage to prosper with high VATs and high income taxes.

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6 minutes ago, Bimetallic said:

Hah! Is there any effort to reform the laws in Britain? Currencies and bullion shouldn't be taxed. That's just sound economics.

We Americans might have to start paying sales taxes on bullion in some states because of a recent Supreme Court decision about sales tax in ecommerce. Some states exempt bullion, and some don't. Of course sales taxes here are usually in the 7-8% range, depending on state, county, and city. We don't have any national sales tax or VAT, but I'd take a VAT if it replaced all income taxes. I don't know how you Brits manage to prosper with high VATs and high income taxes.

Thanks guys for the responses.

I actually bought constitutional quarters for under spot today with ebay buck stacking and stacking my 2% credit card.  It was barely below spot once I bought but that was based on a 10% ebay credit so not 'real' cash.  And the shipping was free.  I just ordered 120 90% quarters! $30 face value of constitutional silver a little under spot!

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5 hours ago, Bimetallic said:

 I don't know how you Brits manage to prosper with high VATs and high income taxes.

Not sure the word "prosper" is the right description for many of us, more like "survive" these days.
Prosper is for those who have been able to buy a house 30+ years ago or come into inheritance.
Property prices and rents are now taking a huge chunk out of taxed earnings, not to mention extortionate commuting costs for those who need to take a train into work.
If you are in a good job in the USA your lifestyle and disposable income will be a quantum leap above the equivalent over here.

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Thats intersting to see the 20% VAT and other perspectives from around the world.  Thanks for sharing everyone.  I'm super digging this stacking.  I'm actually looking to buy gold fractionals... I like Indian heads from pre 1933 US,  gold sovereings, swiss, and french coins.  I really like the US Indian heads though I guess it's a nostalgia thing...

 

I don't want to pay much over spot but I've also nticed pre 1933 is that much more than American gold eagles... kind of surprised by that. 

 

A coin that's 100 years old is not much more valuable then a modern 2018 gold coin even when you compare the gold content.  I think I'd rather go with the old one for the history alone!  Does anyone collect older gold coins vs the new maples, brittanias, and eagles?

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7 minutes ago, intelinside said:

A coin that's 100 years old is not much more valuable then a modern 2018 gold coin even when you compare the gold content.  I think I'd rather go with the old one for the history alone!  Does anyone collect older gold coins vs the new maples, brittanias, and eagles?

Over here we find that early Victorian sovereigns and half sovereigns especially shield-back can fetch a nice premium.
 

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  • 3 weeks later...

I picked up a lot of 10 oz silver bars and I seem to get the most bang for your buck and can get most Quarters pre 1964 for about Spot price or just a little more

I also really like Pre 1933  gold I got a couple Indian heads in 2.5, $5, and $10 price.

I notice the fractional pre-1933 Liberty heads are very low premiums over spot  I'm thinking of picking some up before gold goes up too high.

I think gold will go up a lot of the stock market corrects further lower in the next year...but we'll see

I wonder guys, is it hard to sell pre 1933 golds and European/British/mexican gold during gold bull markets?  Is it easier in the US to just sell modern American gold eagles?

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If you are stacking for weight only and coins (not bars) that are instantly recognisable, buy the predominant coin in your country of residence....in your case, the American Eagle. If you can get sovereigns at or near spot, you might be able to squeeze  a small premium out of them in The US when you sell (all things being equal re spot price) as they are a bit more “exotic” ( Did I really just use that word to describe something from The UK ?!)...

 

In a bull market, all things gold spot price based will rise in nominal terms.....just make sure you know how and where you will sell. Testing the waters by developing relationships with forum members here, for example or dealers in your area by buying and selling will do wonders for trust and the odd good deal both ways.....

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I'm a newbie here... but personally, I have a bit of a silly way of looking at (read: justifying/rationalise) this expense...

I like to think that because it's legal currency with a face value, I avoid CGT, but it's balanced on paying a similar markup at purchase. Which really means, that if all goes well what I'm doing is pre-paying CGT but on the thin end of the wedge. It's not, i realise these things have a price to make, but it takes the sting off a bit, thinking of it like that.

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