What is a realistic 'physical' spot price?

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pug

Member
What do you guys think is a fair and realistic percentage premium above spot for buying physical silver including delivery/pick up costs?

Physical buyers who are looking at spot price have to price in all the premiums, delivery charges, insurance etc. And sometimes all the added costs appear to add a huge cost above spot, that eats into any potential future gain in price (ie. could take years to recover).

I'll attempt to figure the percentage cost for actual delivery of COMEX: The COMEX full-size Silver contract is for 5,000 troy ounces of silver with COMEX approved 1,000 ounce bars. For $150,000 worth of silver, you'd pay a $100 delivery fee for the certificate. To remove the silver from the depository,you pay about a $25 'out charge' per bar ($125). There is a cost for the labor of moving it out of the warehouse (unknown fee). The metal then needs to be moved via armored carrier from the depository locations which are in Wilmington, Delaware and New York City area. A charge of $1500-200 to move it within NYC from the COMEX warehouse to a bank. Lets round up and call it $2200. 2200 / 150000 is 1.5%


Sources:
http://about.ag/futures.htm#.USJDG8VGSoM
http://www.commodity-trading-solutions.com/silver-delivery.html
 
Perth Mint ships silver in from London in 20 tonne lots in a sea container. I think the number would look a lot different if you used 1 tonne (32 bars, 1 pallet) as a delivery size - that would be the industry's "unit".
 
For some reason I can't edit my original posts. But I'm thinking about any size purchase for this topic.

If you order a 1000 or 2000 worth... what's a fair and reasonable physical spot price, considering that actual spot price doesn't include all the extra fees for delivery? I read one poster who said that less than spot + 8% was 'fair' for bullion. Any thoughts or suggestions?
 
Damn I need to be able to edit my posts ....

At an amount of buying a $1000 worth of physical silver bullion from a reputable dealer and including fees and delivery... the best I've seen is spot+7.5%
 
pug said:
Damn I need to be able to edit my posts ....

At an amount of buying a $1000 worth of physical silver bullion from a reputable dealer and including fees and delivery... the best I've seen is spot+7.5%
Click to expand...

I don't know where you live but if you live in an Australian major city like Sydney Melbourne or Perth you can walk into a dealer and walk out with silver for less than spot+ 7.5%
 
If I'm willing to drive 100km I can get 10oz bars at about spot+4%. But I think it's worth factoring into things the transportation cost, even if I drive myself there's gas, wear on the car and my time. Insured delivery costs about another 3% on $1000 of bullion , so the cost is more like spot+7%.
 
salty lemon said:
pug said:
Damn I need to be able to edit my posts ....

At an amount of buying a $1000 worth of physical silver bullion from a reputable dealer and including fees and delivery... the best I've seen is spot+7.5%
Click to expand...

I don't know where you live but if you live in an Australian major city like Sydney Melbourne or Perth you can walk into a dealer and walk out with silver for less than spot+ 7.5%
Click to expand...

Depends on what size silver you're talking about.

For 1 ounce pieces - i doubt it!

For 1kg blocks - sure.
 
Are you trying to stack big oz's or are you trying to shave off as much off spot so you can buy and sell for profiteering?

If it is the former, like salty lemon said, just buy from a LCS/dealer. If your nearest dealer is 100km away maybe you should try the bullionbourse or a sitesponsor.
 
oh how times have changed....it wasn't that long ago when the decision to buy was determined by how far under spot the silver was...nobody bought at spot...
 
The realistic price is when those that sold and need others to sell after them as to not fail to buy back in lower, are ignored by the latter.
 
I mainly buy coins, seldom buy bars, and with Australian coins, I created this table for my own use, I try to keep myself controlled but there are exceptions, always.

Size (oz) Premium (%)
0.5 20%
1 16%
2 14%
5 12%
10 11%
 
Weird thing, yesterday I had some lower than my target price bids running, and today a bunch newbies all overbid them with 15-20%, making them bidding more for 90% junk than 999 silver at a dealer including tax.
I would have had been barely able to purchase them, so it's not that I miss it, but it looks like some people read/hear/see a lower silver price and they decide to buy but they bid prices that are the same ones as when silver was $32.
 
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