Thursday, September 22, 2005


The True Price Of Gold: Part Three-Silver

Today this blog looks at transaction costs for silver. In this case 100 ounce bars. At the Kitco site, they show silver spot at $7.36 and quote a price for a bar at $806. The web site doesn't say, but lets assume they pay shipping. This could be an issue because these bars are heavy, let me tell you!

So I call a dealer in Phoenix. The lady informs me they are paying $715 for 100 ounces this afternoon. This is more like my experince in the past, being offered under spot for my metals. I can remember that the discount on silver was higher than gold in the 1980's as well. Perhaps this is because silver is more volatile in price.

So there is a $91 dollar difference in the sell-to-buy price today, that is an 11.2% haircut right off the bat. And I am looking at least an hour drive each way, maybe more.

One big drawback to silver is the weight I mentioned before. If you want to invest a few thousand dollars, it will take up a lot of space and you will need a heavy duty carry-case. That said, I profited more from silver in the past because it does move more in price. Don't let the past year or two fool you; gold and silver can trade sideways for months and years.

In the next part of this series, I will look at gold alternatives, such as e-gold. Please check back often as I intend to post regularly about precious metals, currencies and the markets they trade in.

Funny you should write about Silver.

I've been thinking a lot about Gold's ugly little sister. Sooner or later some one is going to ask her to the prom.

I'll be in AZ a few more times this year. Where do you buy from?
I guess this is the hardest question because trust is a big issue.
In Arizona the best price will be in Phoenix. I have never found any one buyer or seller to have the best price everytime. I always had to call around.
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