We precious metals investors are always wondering about those magical situations. You know, the ones where someone figures out how to buy silver at spot. Is it really possible to buy silver at spot? Sure, you can buy old rings an so on, but what about silver bullion at spot? Is it a unicorn?
The good news is that deals to buy silver at spot exist and generally concern silver bullion. The slightly-less-good news is that these deals are hard to find in sustainable quantities.
Like any investment, patience and research are going to get you the best deals. There are two ways to buy silver at spot: second-hand, and on promotion.
Buying second-hand silver at spot involves visiting garage sales and such. The writers at Muzeum’s blog note that to make money at garage sales you need to be prepared with a game-plan. You also need the ability to haggle patiently and politely. This can be a cumbersome process involving much more time and effort than you are willing to pay out. On the other hand, it can also form a highly satisfactory part of your collecting hobbies.
Buying promotional silver at spot can be much easier. A number of online dealers - including ourselves and some competitors - occasionally promote silver at spot. For example, at the time of writing, you can buy 1 oz silver maples at spot (up to three per household) from Global Bullion. So how do you find these deals? Sign up for newsletters, stay tuned on Facebook, check out silver collectors forums, and the competition.
What is the spot price? This rapidly quoted number is simply the value of a certain amount of a commodity, as it was last traded. It is the price you get “on the spot”. So take 1 troy ounce of silver - roughly 31.1 grams - and make an offer to buy or sell it on the LBMA. If you were a “market making” bank, the offer to buy would be the “bid” and the offer to sell would be the “ask”. To be fair it’s a little more complicated than that. anyways, what’s this all for? What does it have to do with how to buy silver at spot anywhere, let alone near me?
If we understand how often prices change, we will find that a slight difference in what we pay has little bearing on the long-term success of our investment. In a 2015 article, Trent Gillies quotes Warren Buffett on not watching the market too closely. Remember that market forces of supply and demand will cause metal prices to fluctuate day-to-day. Taking a long-term buy-and-hold approach makes sure that as long as you can buy on a sustainable basis very-close to spot, you’ll save plenty.
In that respect, it is essential to know how much a dealer is charging above spot. A difference of even $0.50 per oz. of silver translates to an unnecessary $50.00 on a 100 oz silver bar. Since some precious metals dealers charge more than others, compare and contrast before you buy.
Keep in mind that shipping costs should be factored into what you’re paying. 10 oz of silver at spot with $10 in shipping is $1.00 per oz more expensive than with free shipping.
Track Market Changes – There are many handy sites that track the silver spot price on a daily basis. We’ve found that when prices don’t change for more than a few months, dealers are more likely to promote deals.
Shop Around – 10 oz Royal Canadian Mint silver bars don’t change much depending on who the seller is. Buy from a dealer you trust and who can sell the product at a low premium over spot.
Buy Bigger Bars – You won’t buy at spot, but you’ll get closer to spot with larger bars. It costs less to mint larger bars, and the savings get passed right on. So save up and invest in bulk.
There are different kinds of silver coins: collectible and bullion. We’ve researched investing in Royal Canadian Mint and US Mint commemorative and collectible coins, and concluded bullion is a better investment. The challenge is that the cost of non-bullion silver coins has much less to do with the fluctuations of spot price than fine silver bars and coins…. these silver coins derive value from the quality of the engraving, the scarcity of the model, and its general aesthetic appeal. A near mint condition rare coin made by the Royal Canadian Mint in 1931 is going to have a premium that brings it far over spot.
Fine (99.9% +) silver bars and coins do not have any of these additional qualities, and thus can be purchased as close to spot price as possible. In an ironic twist, these are also more likely to preserve value on a traditional model. You don’t need the niche collectible market to determine the value. As notes, you can get a price almost instantly on your phone.
If you’re really set on figuring out how to buy silver coins at spot, you could try our earlier garage sale strategy. Unfortunately, you’re unlikely to buy most bullion at or under spot if you don’t make it a full time job. However, you can get very close to spot.
And don’t forget, promotions do exist from time-to-time so keep searching.