Gold and Silver Premium. Don't get ripped off.

 Hey there friends.

Well, if you haven't noticed, premiums on silver is through the roof. Basically, people aren't selling their silver, silver production has fallen, and the industrial sector is sucking up as much of the silver as it can get it's hands on. Just about everything from electronics to medical tools/supplies use silver. Thus the supply and demand have really kicked in.

If you haven't checked, the AVERAGE PREMIUM for silver rounds is about 25%. Spot price is around $25 but you'll be hard pressed to find anyplace to buy for less than $32. If you want American Silver Eagles, you're going to be paying around 80% premium. Average price for 1 silver eagle is about $45. Now many may think that that is disgusting; and it is. But what is REALLY DISGUSTING, is companies like KITCO are totally RIPPING YOU OFF. They will sell you a Silver eagle for $45, but if you want to SELL them a Silver Eagle, they will pay you LESS THAN SPOT. About a dollar less. And even less for silver rounds. That is a major ripoff. I definitely recommend NOT purchasing anything from KITCO. They are one of the worst ripoffs.

Now; some companies like SDBullion isn't too bad. Their Silver eagles are sill a little high, around the $44 mark, but you can get Silver Rounds for $29-$30 for a 1 ounce round. That's still a 20% markup, but it's tolerable. 

This brings me to the main point of this article. As you can see, when they buy back silver, almost everyone gives you around spot. No matter if it's a silver eagle or a generic 1oz silver round. So why in the world would you buy a silver eagle and HOPE and PRAY that the price of silver makes it to $45-$46 just so you can BREAK EVEN???? They are going to giver you about the same price for eagles as rounds; so you might as well save yourself a lot of money and buy generic rounds. 

Gold on the other hand is different. Gold is mainly used for investments and jewelry. Many people think gold if very prominent in electronics and such. It's not. It's used very little. Silver is actually the best electrical conductor there is. But because silver doesn't have much industrial use, the premium on it has not moved much at all. The spot price of gold, as of this writing, was right at $2005 an ounce. To buy a 1oz gold american eagle, they can be found for about $2105. Believe it or not, a $100 premium is NORMAL. That's only a 5% markup. Britannia, South African Krugerrand, Austrian Philharmonic, etc. can all be gotten for about $2085 for a 1oz coin. That's only about a 4% premium. 

So, my suggestion is, if you have some silver now, but you still want to buy/trade your fiat currency for precious metals, BUY GOLD. If you can buy 1oz eagles, maple leafs, philharmonics, etc. definitely buy 1oz coins. If you really can't afford a one ounce and you're looking to buy 1/2 ounce...... Well, don't. You'll be back at that 25% premium again. 1/2 ounce will cost about $1250. If you're going to pay a 25% premium, then you might as well buy $1250 worth of silver rounds. At the $31.25 for a round (That's 25% premium included), that's 40 coins (2 tubes) of silver.

So..... if you're itching to buy, get 1oz gold coins at 4-5% premium markup, or generic silver rounds. at 20-25% premium mark up. Stay away from fractional gold and stay away from government mint silver like american eagles, maple leafs, etc...

CYA
SE