How much mark-up will I pay for gold and silver bullion?

The physical gold and silver markets can be confusing to new investors because of the wide range of prices for the same product. For example, one well-known company advertises one ounce gold bullion bars at spot price, while a second company charges $29 over spot and a third company asks for $50 over spot price per ounce. Similar situations arise when researching gold bullion coins and silver bullion products. This begs the question, “what is a fair mark-up for gold and silver bullion?”

The type of product plays a large role in the cost over spot that an investor will pay. Bullion bars cost less than bullion coins because the cost of manufacturing coins is higher. The majority of coins are produced by government-sanctioned mints so when buying coins it is important to remember that the cost over spot is not the same as the mark-up; gold and silver dealers do not buy coins at spot price so the mark-up for the consumer will be slightly less than the premium over spot.

The mark-up for silver bullion and gold bullion moves with supply and demand. A bullion product with high supply and low demand will carry a relatively low premium while a popular product in short supply will cost more. A larger purchase will usually lower the investor’s price and asking about large-volume discounts never hurts.

The bullion dealer that you choose will play a significant role in the mark-up that you pay. Some firms buy network advertisements and pay celebrities to endorse their brand; such firms will likely deliver your metals as promised but you will almost undoubtedly pay more than is necessary. Local dealers may seem to have low prices but their inventory is often very limited. Investors who want more than a couple thousand dollars worth of precious metals and who want to avoid celebrity-endorsed retailers should search out a reputable discount dealer. Large-volume discount dealers allow investors to choose from a wide variety of bullion products while at the same time keeping the mark-up for gold and silver bullion as low as possible.

Call the Gold Silver Help Desk today at 1-800-394-3337 if you would like recommendations for a firm that sells discounted gold and silver or if you need the name of a dealer that is local to you. Additionally, we encourage first-time investors to complete our Gold & Silver Investing Tutorial, available below, before finalizing any precious metal purchases.

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