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Premium Over Spot Price for Silver Bullion: Coins, Bars or Rounds

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The premium over spot price when buying silver depends on the type of silver purchased, the quantity of silver purchased, and the dealer from whom the silver is purchased.

Government issued bullion coins will carry a higher premium over spot than generic silver rounds. Quality and trust are a factor. Also, a 500 coin purchase will result in a lower premium than a 100 coin purchase. Volume discounts apply to silver, like any other commodity. Finally, a quality online bullion dealer will charge a lower premium than a less reputable dealer.

PMBull looked at the average premium over silver spot price for Coins, Rounds and Bars from 4 online silver bullion dealers to assess which factors contributed most to markup. The results are published in the tables below.

Premium Over Spot Calculation on a Typical 100 Ounce Silver Purchase:
Avg. Premium Calculation Silver Coins Silver Bars Silver Rounds
Silver Spot Price at Time of Survey 33.58 33.58 33.58
Silver Product American Eagle 1-Oz Bar 1-Oz Round
Quantity 100 100 100
Cost Per Ounce with Shipping 36.75 35.27 35.07
Premium Over Spot with Shipping 3.17 1.69 1.49
Total Cost with Shipping $3,675 $3,527 $3,507
Lowest Premium 2.96 1.36 1.24
Highest Premium 3.64 2.14 2.14
Premium Over Spot Calculation on a Typical 500 Ounce Silver Purchase:
Avg. Premium Calculation Silver Coins Silver Bars Silver Rounds
Silver Product American Eagle 1-Oz Bar 1-Oz Round
Quantity 500 500 500
Cost Per Ounce with Shipping 36.34 34.78 34.58
Premium Over Spot with Shipping 2.76 1.20 1.00
Total Cost with Shipping  $18,170  $17,390  $17,289
Lowest Premium 2.49 1.36 0.74
Highest Premium 2.94 2.14 1.44
Check out JM Bullion LLC if you are looking to buy silver bullion at the lowest possible price. Their prices are guaranteed to be the lowest and they only offer the highest quality, most popular investment silver bullion. With an easy to use, well put together web site, finding the right silver for investment purposes, at a good price, is an easy and pleasurable experience. For tips on buying physical silver and a quick reference chart for comparing prices on rounds, bars and coins, see see PMBull’s guide to guide to buying physical silver.

The Premium Range for a Typical Online Silver Purchase

Premiums between dealers and silver bullion products on a 100 Oz. purchase ranged from $1.24 per ounce to $3.64 per ounce, or $2.40 total. However, the difference in silver premium over spot was more a function of the type of silver investment than the dealer from whom the silver was purchased online.

The greatest difference in premiums for any given product for any given dealer was $2.40. The greatest difference in premiums between dealers for any given product was just $0.90.

The Impact of Premiums on an Average Total Silver Investment

In PMBull’s survey of top online silver bullion dealers, we found that for a typical 100 ounce silver purchase (approximately $3,500 at prevailing rates), the difference in total silver cost is more heavily impacted by the type of silver purchased than the dealer from which one purchases silver.

The total cost between dealers and products ranged from a low of $3,482, to a high or $3,722, a difference of $240. The maximum difference in total price between types of silver purchased was $172.00 The maximum difference between dealers for any given type of silver purchased was just $90.00.

Conclusion: Premium Over Spot Is Not as Important as Other Factors

A silver bullion buyer must first determine how much they wish to invest, then determine what type of silver bullion they wish to purchase. Buying silver bullion strictly on the basis of premiums misses many key factors that need to be considered when investing in physical.

While premiums are higher on government bullion coins, they will most certainly command a higher premium when these coins are sold, allowing one to recover back what appeared to be an excess premium.

Ultimately, the difference between dealers, and even types of silver, can be eclipsed by a single day move in the spot price of silver. Think about it. If you miss a $2.00 move in the price of silver while spending time trying to save $0.50 per ounce, have your saavy shopping skills truly been rewarded?

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Silver Premium Survey Details:

Silver Spot Price Per Ounce was $33.58 on October 12, 2012 at 5:15 PM EST.

1-Oz Silver Bars Brand Breakdown:

Gainesville: Sunshine Mint
Provident: Ohio Precious Metals
JM Bullion: Silvertowne
Apmex: Sunshine Mint

Brands used for the 1-Oz silver bars were those brands that represented the lowest cost new silver bar for each online dealer.

1-Oz Silver Round Brand Breakdown:

Gainesville: Buffalo Design
Provident: Buffalo Design
JM Bullion: Buffalo Design
Apmex: Buffalo Design

All online dealers in the survey offered 1-Oz Buffalo Design silver rounds, which were generally the lowest cost new silver rounds available.