Reason for spread variance?

Discussion in 'General Precious Metals Discussion' started by Sham Bolic, Aug 9, 2019.

  1. Sham Bolic

    Sham Bolic Member

    Joined:
    Jul 27, 2019
    Messages:
    103
    Likes Received:
    18
    Trophy Points:
    18
    Location:
    Perth
    Anyone know why Perth Mint spread on silver bars is 13.6% while spread on gold bars is just 5.1% - almost triple the spread!?
    And is this a constant or does it fluctuate wildly? Does it ever invert in favor of Silver?

    Thanks
     
  2. Sham Bolic

    Sham Bolic Member

    Joined:
    Jul 27, 2019
    Messages:
    103
    Likes Received:
    18
    Trophy Points:
    18
    Location:
    Perth
    what happens if the gold/silver ratio plunges form 80 to say 20 with say Silver quadrupling in price while gold stays the same (just as a theoretical example) - would the dealers reduce the spread on silver bars (i mean %age on price not per item - eg from 13.6% today to say half that - say 7% ?)
     
  3. Captain Kookaburra

    Captain Kookaburra Well-Known Member Silver Stacker

    Joined:
    Apr 15, 2010
    Messages:
    5,009
    Likes Received:
    719
    Trophy Points:
    113
    Location:
    Melbourne
    No ... The premiums are based on a mixture of fixed production costs (like stamping and labour) and %based costs like hedging and insurance. The fixed costs are naturally a higher component of silver bar spreads as a %, but if sSilver was to overtake gold, then the reverse would quickly come about.
     
    Sham Bolic likes this.

Share This Page