People investing in silver want to buy it for the “spot price”, which is the price of silver at the current market value without dealer premiums added. All businesses must make a profit, and if local and online dealers don’t charge above what the raw silver is worth, they don’t make a profit.
Although nearly all physical silver will sell above spot price, there are ways to either obtain the silver bullion at the spot price or limit what you pay to 1 to 7 percent over the spot price.
How to Buy Silver at Spot
In order to have the best chance of obtaining silver bullion at spot price, you need to consider a cash transaction at a local dealer. Then, it’s essential you follow the day’s spot prices on the market, such as quoted on the COMEX, and are able to negotiate the price with the dealer with confidence.
Hesitating or not being knowledgeable in silver bullion prices and transactions will give the dealer the impression you don’t know what you’re buying. It’s important to learn everything you can about silver bullion and the current price trends. The spot value of silver changes by the minute each day.
90% Silver at Spot
Local coin dealers will offer old coins and silver nearest the current spot price, and if you want to buy old coins with 90% silver alloy, take a calculator with you to calculate their worth. Many old coins minted before 1965 are 90% silver so 100 oz. of old coins will equal 90 oz. of pure silver.
If you know the current spot price and the amount of older coins you’re buying, you can come very close if not lower than spot price. When offering the dealer a negotiated price, let them know you are ready to pay with cash. That makes the deal more appealing and the price more flexible.
If you want to purchase a small amount of silver bullion, you’ll more than likely pay premiums and not be able to get close to the spot price. Buying a larger quantity will allow you to stay closest to the spot price, as dealers will give you a price break on bulk purchases.
Private vs. Government
If you look for privately minted silver bullion bars, rounds, and coins, you’ll more than likely pay much less than US Minted silver. These private mints will offer a guarantee their silver is 99.9% pure.
Look for certification through several numismatic organizations such as the Professional Coin Grading Service, PCGS or the Numismatic Guaranty Corporation, NGC. The mint will be required to abide by these organizations strict standards to produce silver bullion coins.
With all these varied purchasing options, there are other outlets to pay the spot price or much more below. It requires time and patience, but shopping at flea markets, garage sales, estate sales, or being part of a coin collection group that has regular exchanges and sales of coins and bullion often allows the buyer to obtain silver bullion items at the best prices.
Many second hand stores or pawn shops don’t keep up with the market value of precious metals. If silver takes a major jump in one day, shopping at these shops early the next day can allow the buyer to buy silver bullion before the shop owners realize the price has skyrocketed. With time and effort, silver bullion can be bought at or near the spot price making it an even better investment.