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
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% ?)
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.