Why does Physical Silver cost more than the Silver Spot Price?  

If you are doing research on silver and whether you should be selling your silver now or holding on to it you are probably going through the countless silver bullion dealer websites and you might have noticed how the bullion products that offered on these websites are often sold at a higher price than the spot price of silver. You might be thinking that if new products are priced this high when you sell silver bullion Melbourne your own bullion should be above spot price but that isn’t how it works.

Any reputable silver bullion dealer posts live silver prices on their site. These might be based in U.S dollars or in their local currencies. The physical bullion industry in the industrialised nations is very competitive. With Australian silver bullion dealers, the silver bullion products that are available are priced per troy ounce but there are smaller fractionalised silver bullion coins, rounds and bars. It is possible to buy silver bullion at a couple of percentage points above the spot price of silver in Australia. The price of buying silver bullion is impacted also by the cost of refining the silver after mining, manufacturing the silver product, minting and marketing and warehousing the silver. Having said that, it is also important to highlight the fact that the price of silver coins is more than that of bars. You need to understand why this is the case so you can understand what it takes to get optimal returns. Still as an investor, you cannot ignore the high returns you stand to get when you hold silver for a long time.

For Example, let’s say you bought a 100 oz silver bullion bar for $2,000. Let’s say the price of silver goes up by 10% a year and you hold on to the silver for 10 years then your $2,000 investment will have grown to $6 727,5.

As a silver investor, it also helps to understand what your Return On Investment or ROI will be. This is a measure of the profit or loss made in proportion to the amount originally invested. This can help you make a good decisions when it comes to making silver investment decisions.

When you sell silver bullion Melbourne the bullion products will yield a sale price at or below the spot price. A lot also depends on the type of silver bullion product and the silver mint hallmark. For example, The silver sale price (also known as the bid price) you will get you will get when you sell a 1oz Silver Kookaburra will be more than what you might get for a generic 1oz. Silver round.

The price of silver operates differently during specific market conditions. For instance, when the markets are calm the price of gold bullion products hovers over the silver spot price. That is if you are buying but when you are sell silver bullion Melbourne in calm market conditions yo can expect a bullion dealer to give you a price that is near or slightly below the spot price. However, there are some silver products that you can almost always expect to yield sales prices that are higher that the silver spot-price. For instance, The Silver Eagle American coins and the Maple Leaf Coins from Canada always fetch prices that are above the spot-price of silver.

When it comes to investments like silver bullion making a profit from what you have by selling can depend a lot on your timing. Are the markets calm or volatile? Silver is very volatile compared to gold. So, it’s not common for the silver market to stay on one spot. But if you are a seller, it is better to wait for the calm. Don’t sell your silver until you absolutely need to or have to. At the end of the day, whether you sell now or later or never depends on you and what your financial goals are. That’s the most important thing to keep in mind when every expert and economic guru can tell you what their calculated guess says you must do but ultimately it’s your silver – sell whenever you feel the time is right for you.