Silver vs Gold Bullion Bid-Ask Spreads

coastaljerseyguy

Was looking to purchase my first silver bar this week when I saw that the silver spread between buy & sell was ~ 20%. This represented the premium on all sovereign coins as well as the 'generic' bars vs the buy spot price. Thought this was too high to ever make a profit. Looking at gold, the spread was significantly less, so I bot < 1 oz Swiss gold bar.
So besides the impressive look & heft of the silver bars, any reason why so many folks here stack silver? Just want to make sure I'm not missing anything before I decide to buy some more.

Thanks
Jim

carew4me

While silver and gold historically linked as hard money their futures are on different paths.
The #1 reason I think is the potential for silver spot price to rise higher and faster than Gold as a % mainly driven by
green/Industrial/energy/medical applications.

blitzdude

Gold buyers are typically looking for a tried and true store of wealth whereas many silver stackers are merely speculators. There are also those that cannot afford the metal of kings so they stick with the gutter. I'd shop selectively at this point in time, premiums on both metals are historically outrageous. Govt issued coins also tend to move easier compared to generic bars (not to mention far less counterfeited). Something to keep in mind for when it's time to sell. Good Luck!

isaiah58

In percentage comparison: we used to pay about a 5% higher premium on silver than gold. Now we pay about a 30% higher premium. The net is silver is costing 25% more to purchase than an equal value of gold.

On paper:
Silver is stuck around 66 to 1, in 2011 it was below 45 to 1. The current excessive premiums put silver at 47 to 1 retail, to liquidate the dealers are sticking to paper value. Yet they claim they can't buy enough???? Of course supplies to them dry up because of their short sided approach.

Yet on Reddit I see post after post from excited new "stackers"

Of course the fake stuff is all over the place. People out of work have no problem buying $5 ASEs via Facebook ads and selling them on eBay as being real

coastaljerseyguy

@isaiah58 said:
In percentage comparison: we used to pay about a 5% higher premium on silver than gold. Now we pay about a 30% higher premium. The net is silver is costing 25% more to purchase than an equal value of gold.

On paper:
Silver is stuck around 66 to 1, in 2011 it was below 45 to 1. The current excessive premiums put silver at 47 to 1 retail, to liquidate the dealers are sticking to paper value. Yet they claim they can't buy enough???? Of course supplies to them dry up because of their short sided approach.

Yet on Reddit I see post after post from excited new "stackers"

Of course the fake stuff is all over the place. People out of work have no problem buying $5 ASEs via Facebook ads and selling them on eBay as being real

You're right, on the bullion sites, almost all silver is out of stock. There's 50 products and 5 in stock, and not what I was really looking to buy. Bet if they raised the buy price they would get more sellers & stock, and in turn sell more volume to make up the loss of the spread.

blitzdude

@coastaljerseyguy said:

@isaiah58 said:
In percentage comparison: we used to pay about a 5% higher premium on silver than gold. Now we pay about a 30% higher premium. The net is silver is costing 25% more to purchase than an equal value of gold.

On paper:
Silver is stuck around 66 to 1, in 2011 it was below 45 to 1. The current excessive premiums put silver at 47 to 1 retail, to liquidate the dealers are sticking to paper value. Yet they claim they can't buy enough???? Of course supplies to them dry up because of their short sided approach.

Yet on Reddit I see post after post from excited new "stackers"

Of course the fake stuff is all over the place. People out of work have no problem buying $5 ASEs via Facebook ads and selling them on eBay as being real

You're right, on the bullion sites, almost all silver is out of stock. There's 50 products and 5 in stock, and not what I was really looking to buy. Bet if they raised the buy price they would get more sellers & stock, and in turn sell more volume to make up the loss of the spread.

Be patient, the premiums always drop. And from one minute to the next 50 products out of stock suddenly becomes 150 products in stock.

jmski52

The market knows that something's up. Premiums always increase when there is uncertainty. There could be increased demand, shortages in various supply chains, or a general realization that our money is being destroyed by the Fed.

Or all three. Higher premiums currently reflect price hedging on the part of the owners of silver.

ricko

Definitely there are interesting times ahead.... and when the ride begins, it will be wild - and possibly disastrous. It could easily make the crash of '29 and the Great Depression look like a bump in the road. Cheers, RickO

metalmeister

Different times indeed. Got $ilver?