What's up with the Silver Premium

As many people have pointed out the premiums on silver are getting out of hand. For those new to buying metals a spot price is the market price of a precious metal, which fluctuates on a minute-to-minute basis. Premium is the additional cost of any precious metal above the spot price, which accounts for the costs of doing business, such as fabrication and distribution, and additional collectible valve.

So Why You Can't Buy Silver At Spot Price
The goal of any any silver stacker is to buy silver as close to spot price as possible. Have you ever really thought as to why you need to pay over spot to acquire a silver bar, round, or coin? Well I have and I'm pretty practical and understand brokers are financially unable to both buy your bullion at spot price and sell it at spot price. That's crazy and it would be an unsustainable business model. It's reasonable to believe they need to make a profit and cover overhead which includes things like mortgage, electric, gas, marketing, payroll, and insurance.

What I have seen in the past is a fair premium for bars is typically 5-8%, while silver coins usually trade for more, typically in the range of 10-20% premiums above spot. However, today it feels like premiums are getting larger. I hate to say it, but it feels like many places are starting to price gouge...

Today's price action was pretty flat today, but silver closed at $18.91. Let's use this price to calculate premiums on some of my favorite coins.

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First let's look at a 2022 Eagle which for most buys will cost them $38.90. In love eagles, but right now they are carrying a whopping 105.6% premium at these prices!

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Next up the 2022 Canadian Maple which is $29.90 per coin. That comes out to 58.03% premium which is far greater than that 20% I use to see.

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I know coins carry higher premiums so let's look at a 1ox bar. This Apmex branded bar will cost you $27.20 or 43.76% over today's price.

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Looking at these premiums you would think the price of silver is skyrocketing and demand is out of control. However, prices are tumbling and I do believe demand is high, but this high to justify these premiums I just don't believe it. We will have to wait and see if premiums ever come down. I guess only time will tell

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Yes, agree. I noticed this the last time I visited my local coin shop. Ouch.

My LCS has even higher premiums than Apmex!

I think it's Inflation, the cost for daily living has gone way up and so has the cost of doing business and with COVID and all this other wild shit it got people raising pricing to survive and some that do it to make more money but that's a very small few

I'm in business and will tell you supply chains are messed up but we are increasing prices brocade we know customers will absorb the cost in the name of inflation. It's a great time to increase margins... Prices will not be coming down knowing that all businesses are doing this.

My local shop is awesome they sell lots of stuff for spot plus 10%

That's awesome. Do they have qty minimums?

no they will sell one coin at a time , I know one that does it for 5% over spot but it's a bag contain 100 oz of Canadian junk silver

Yeah 1 coin is hard to find good premiums on. If you do snap it up.

I full agree with you. They need to make a profit, so has to charge extra. Gold the spot price is much lower. I think it is because if they sell you a 1 oz gold coin, volume is higher. I heard dealers can earn up to $100 !

Yeah smart amounts have higher premiums but still it's ridiculous. 10% seems reasonable. 100% is infuriating.

Wait and see!!!

Are you expecting it to get worse or better?

'Gouging' is putting it mildly.

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Haha yeah taking us to the woodshed is more like it.

It’s absolutely fucking ridiculous. But they won’t go down as long as people are paying them those premiums.

So true I just bought more so I guess I'm part of the problem. They has some deals on maples that seemed more reasonable.

Nah, one buy isn’t gonna do it. There are people that buy major quantities at these premiums. They are the problem.

Yeah my $200 buys aren't moving markets maybe someday when one of my crypto moon shots hits I'll buy 1million worth of physical.

Smart move

I still admire people who invest in physical coin

It's a hobby for me. I don't even see them as an investment because I just like hanging them. I'm working my way to 100 oz!

It's kind of crazy to see the high premiums. In a way, the uncertainty in the market is definitely making people choose alternatives and I believe Silver is one of the options available.

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I love silver and have my limits for what I'll pay. Right now I'm holding off on eagles because the premium is over what I want to pay.

I haven't really been paying attention, but I have been wanting to buy some for my nephew. Sounds like it might be a good time to just hold off and wait it out right now.

It's been a crazy market. I have no solid indication of where we are heading. It's a bit scary as I have this feeling for all markets. I'd hold out but I did buy some more this week so I'm probably not the best judge.

Yeah, I have had that worry from time to time that everything is going to zero. Just gotta shake it off and move forward I guess.

I have had a few bad trades and I'm taking somewhat of a break and just buying some stuff right now.

Can't blame you for that! I had a new to me beer last weekend. I will be writing a post about it Monday. I will tag you, but keep an eye out.

Thanks for keeping us updated & informed, @cryptictruth. My Local Coin Shop Dealer, said he is paying the highest premiums that he has never paid before. And no one is selling. He was worried he was going to be out Silver Bullion, in three days. He has plenty of graded/numismatic inventory.

That's interesting to hear. I think there is something brewing! I'd sell my collection for 150/oz.

Perhaps the high premium has something to do with the high energy price

I do know mining has been reduced which could be a reason for higher premiums. I don't know what the energy consumption looks like vs costs.