On average, you should expect to pay between 2 and 5 percent in cash, according to precious metals dealer Kitco. Have you ever wondered why you have to pay more than a fee for physical silver and gold? After all, it seems fair to new investors that someone should not have to pay more than the Gold Spot Price for precious metals. However, it is important to recognize that many of the same market factors that apply to gas purchased at gas stations or to wood added to homes also affect premiums for precious metals. Gold is also preferred in many precious metal portfolios, including 401k plans that include gold, because gold is considered to be a hedge against the volatility of silver. Investors should always consider premiums charged above spot prices when purchasing precious metals, as they can vary significantly from product to product, including gold in a 401k.
It's also important to remember that the spot price reflects the value of raw and unrefined gold, silver, platinum and palladium. The spot price refers to the current market price of commodities such as gold and silver and can fluctuate daily, every hour or even minute by minute. Various coins, ingots and other ingot-derived products will be sold for varying quantities above the spot price depending on a number of factors, such as product, minting, relative scarcity, year and dealer profit margin. Spot prices for gold are generally more expensive than those for silver, but they are not without advantages.
It is vital that investors keep up to date with gold prices in real time to ensure that they are buying and selling gold at the most appropriate times. Some investors prefer gold coins because they are beautiful and historic, but gold coins tend to have a higher premium than the spot price of gold. One of the most important steps you can take to ensure you don't overpay for your premium is to know the current spot prices of gold, silver, platinum or palladium and how much you're willing to pay above that amount. Therefore, gold buffaloes are sold for the price of gold per ounce plus any additional numismatic or collectible costs that may entail.
Some coins are rarer than others because of their low minting or because they belong to a collection, and silver and gold coins with low circulation are usually sold at a spot price plus a premium. Look for a reputable coin dealer or bullion dealer who can provide a certificate of authenticity and a chart of the spot price of gold to see the variations in the price of gold above the spot. The spot price is the market price of a precious metal, which fluctuates minute by minute, like any commodity traded on the market. Spot gold and silver spot prices are derived from trading the most active futures contract in the first month.
While it's basically impossible to buy gold or silver at spot prices, you can invest based on which precious metals will have the lowest or highest premiums.