When dealing with precious metals, learning how to sell silver at spot whenever possible can make your investments much more profitable. In fact, this is the goal for all prospective and engaged collectors and investors. The Dean of Wall St., Benjamin Graham, even went as far as recommending you buy [securities] at least 30% below their intrinsic value. Ideally, therefore, you can buy silver under spot prices and sell it at least at spot.
That's the first part of the equation; buying your investment cheap. Here I am going to talk about learning to sell silver at spot prices.
Understanding How to Sell Silver at Spot
In this article, I am focusing on a few recommendations on how to sell silver bullion for spot or above. Why? As I alluded to above, you never want to buy silver bullion - even the new stuff - with more than a small premium over spot. Step two is therefore to make sure you don't get ripped off when selling or refining silver. The challenge for many people is that the risk of getting duped is high.
There are a plethora of dangerous dealers and gold/jewellery buyers who will try to convince you to sell at non-transparent rates. These rates are usually a great deal for the buyer, but truly unfair for the seller. The structure of the 'traditional' precious metals industry often disenfranchised the retail investor and collector. This comes as first unfair advantages and second, bullion market manipulation.
The first part of selling silver at spot is understanding that dealers and other buyers are under no regulatory or otherwise obligation to buy at a set price. This creates problems for misinformed sellers working with bellow-board buyers. On the other hand, some say this loses sight of the big picture. In fact, some gold buyers without great access to equipment and information are taking a much higher risk of buying fakes.
Furthermore, dealers may even pay above spot for rarer bullion such as old Englehard bars. Should we bar dealers from being able to do so? There are many factors involved in setting the price, and for some silver coins, weight is only one factor. Other to consider include numismatic value, rarity, and the specific Mint from which it was produced. Needless to say, the debate over how to bring about best practises in the precious metals community is long and complex.
Research the Competition to Sell Silver at Spot
Those of us looking to sell silver at spot need to account for all the factors that determine the metals' actual price. Precious metals are a cut-throat market, and online bullion dealers represent one of the best outlets for selling silver. Because it is so easy to find a long list of online dealers, you can compare silver prices with little effort.
You can also use online tools to get a comparison done for you. Long story short, online bullion dealers are a great way to buy from companies with low-cost access to silver. Just remember to be careful and do your homework. One way to only buy from trustworthy dealers is to check who has been around for at least a few years with good testimonials.
Before we get further into how to buy silver at spot, let's discuss the background on what determines your spot price in the first place. As the Perth Mint explains, there are two markets which determine the price of silver.
Over-the-Counter Prices Are Set in Relation to the Spot Price
The over-the-counter "OTC" market involves interactions done on a one-to-one basis between traders. That includes the purchase and sale of bulk silver between corporate entities. These buyers and sellers often work from London and other vaulting locations such as Switzerland. Likewise, individual investors buying from online bullion dealers offering their own price, in relation to the spot price, are OTC participants.
The Perth Mint describes this as an “opaque market." Some dealers, like Global Bullion, are focused on creating a more transparent buying and selling process. Since prices are effectively set on a second-to-second bases, there is little on which to accurately price silver. As a result, the everyday point of reference in everyday over-the-counter dealings is the spot price.
Most of us therefore rely on gold and silver by a globally recognized business such as Reuters or Bloomberg. They base their pries on the big banks, which update price based on major trades.
Look to Futures Exchanges As Projections of Spot Price Growth
Futures contracts are public exchange contracts that determine the price of silver to be delivered in the future. The spot price is often implicated in these dealings because it is used as the price point for futures speculation.
Futures contract movements affect the spot price and it is reflected in COMEX prices. At the end of the day this is a rough estimation of the value of silver determined by banks. Many dealers use this to measure the price of 1 troy oz. of silver, and futures offer equivalent prices for other weights.
The Thick of It: How to Sell Silver at Spot Price to a Dealer
It is generally rare that dealer will budge on their set price for buying silver coins, buying silver bars and/or jewellery. So your best bet is to contact dealers and ask if they will buy at spot. Global Bullion, for example, regularly buys certain products back at spot or just under spot. Some of the best ways to sell at spot price to dealers is as follows.
Selling in Bulk is a Great Way to Sell Silver at Spot.
You can offload a silver bars collection to reputable bullion dealer for a price close to spot. These dealers normally take those bars and sell them at a premium over spot, profiting the difference. If the demand is high enough, they may even be willing to pay over spot.
Another Way to Sell Silver at Spot is to Find Silver with a Little Numismatic Appeal
Your all set if you have silver with high numismatic value (like one of these Top 10 silver coins to buy). A dealer knows they can get a much higher price for rarer coins, and thus will not blink at buying such an item off you at spot price.
This will also apply to more unique products (that either had limited run circulation like the Royal Canadian Mint Kraken or products from a manufacturer like Johnson Matthey that doesnt produce new bullion anymore)
If its a less minted size, that also helps (like a 2 oz, 20 oz, or 50 oz bar)
Selling to dealers means can mean competing with Mints and making professional relationships with people across the world. In little time, a collector or investor is rewarded with higher premiums than for example, pawn shops or jewellery buyers. This works for bullion because dealers buy silver from you at or Learning how to sell silver at spot.
I'll finish on two final points. First, remember make sure to keep your silver in the best condition to sell it at spot. Second, it all comes down to putting reasonable research into what you own and approaching a reasonable amount of buyers to compare your payout, at least the first few times.