Spot Silver & Spot Gold Price

To become familiar with precious metals, it is important to understand the spot price as a terminology. The spot price is the price for the raw commodity "Gold" or the raw commodity "Silver" as well as other precious metals. A good way to think of it is the value of the metal if it were to be dug out of the ground. When buying physical precious metals most people like to have their physcial product in some organized form such as a coin or a bar. This is where the premium comes into play. Coutries typically mint coins and that will add a premium to the coins the make. This premium is normally regulated by the government of the country. Bars are normally made by private manufacturers and there is cost involved with refining and producing the bars. A good rule of thumb for bars relates to the size of the bar. It generally costs the same amount to produce small bars as it does larger bars. This means that the premium "per ounce" is lower for larger bars.

Sale price vs. Spot Price

This is where the premiums mentioned in the above paragraph come into play. For gold coins, the premiums can seem very similar to bars relative to the metal "gold" since the premium is relatively small compared to the price of the metal itself. You may see premiums for one ounce coins & bars anywhere from $15 to $85 for bullion items. Bars are going to be toward the low end of premiums while coins from specific countries are going to be the highest. When it comes to silver, the premiums matter a bit more. Silver bars can have premiums of as low as 25c per ounce to even lower, while coins can have premiums of several dollars. Depending on the price of silver at that time, this can make a big difference when purchasing silver. Luckily, some of this premium can be recouped when selling silver at the current market.

Silver to Gold Ratio

Although Gold and Silver tend to move together in the marketplace. Many investors tend to track the ratio of gold to silver. This formula is simply Gold divided by silver. This helps to see if one seems particularly out of the normal pattern. Recently(last 10 years) this number has been anywhere from 30x to as high as 85x.