What Is The Spot Price Of Silver?
When people refer to the silver spot price or the spot price of any metal, they are referring to the price at which the metal may be exchanged and delivered. In other words, the spot price of silver is the price at which silver is currently trading around the world. Silver spot prices are in a constant state of discovery and the silver spot price is constantly being watched by banks, financial institutions, silver dealers, and retail investors located around the world.
Silver as an Investment
Since the beginning of the 21st Century, silver prices have increased overall, catching the attention of many investors. Many people look to precious metals, such as silver, to help protect themselves against the ongoing devaluation of the U.S. dollar (or other fiat currencies) and volatility in the stock market. Other investors, sometimes referred to as “preppers,” believe silver will play a key role in bartering and trade in the event of an economic collapse.
Silver is available for investment in many different forms, including paper silver and silver bullion. Physical silver bullion is most commonly found in coin, round and bar form with several size options for each. Some investors enjoy owning government-minted coins while others prefer paying lower premiums for bullion bars and rounds. In any case, there are a vast amount of options available in terms of this investment vehicle.
Aside from bullion, “paper silver” is also available in the form of ETFs and certificates. These options are different from physical silver bullion in the sense that the owner never actually gets to hold the silver in their hands. A silver ETF or certificate is basically a piece of paper that says a bank or financial institution is holding a specified amount of silver for you without you ever seeing that silver.
WHY BUY PHYSICAL GOLD & SILVER?
When you buy Precious Metals, you invest in an asset class that is as old as civilization itself. Not surprisingly, these ancient storehouses of wealth can play important roles in a modern portfolio.
Because the global supply is relatively finite, Gold’s relative purchasing power has historically remained stable during inflationary times.
An ounce of Gold and Silver is the same ounce of Gold and Silver with the same recognized value anywhere in the world. This makes the physical metal easy to trade.
Some coins stay in families for generations. Even over decades of time, each recipient realizes the value of their inheritance. Physical Precious Metals can be a means of passing tangible wealth onto future generations.
Precious Metals prices generally move independent of stocks and bonds. In a downturn, they could provide the one bright spot your portfolio needs. Their low correlation to other assets makes Precious Metals ideal for balancing any portfolio.
Market timing is difficult for any investment. That is one reason many investors look beyond day-to-day price movements and buy physical Gold or Silver as long-term investments. When planning to hold an asset like physical Gold for 3-5 years or more, it is less important to consider the current cost of the metal and more important to examine its historical performance in relation to other investments.
Depending on your budget, personal objectives and investment time horizon, you may consider a dollar cost averaging investment strategy. Dollar cost averaging is a conservative approach that involves dividing the total sum to be invested into equal amounts and investing those fixed amounts at regular intervals over time. This approach enables you to scale up or down with the market.
WHY BUY SILVER?
WHY BUY SILVER?
Silver was the first metal used as currency more than 4,000 years ago, when Silver ingots were used in trading. When you purchase Silver, you are buying an asset valued since ancient times. Recognized innately by humans as valuable, Silver has always been a viable investment and commodity. But what makes Silver a good investment now? Why is buying physical Silver a good idea today? Let’s examine what makes buying physical Silver a great investment and collecting opportunity.
As there is a finite amount of Silver in the world, Silver’s relative purchasing power tends to remain stable. For example, in 1985, the cost of an ounce of Silver would just about buy two movie tickets. Allowing for some peaks and valleys in the market, today, one ounce of Silver costs slightly less than a pair of movie tickets while the price in dollars has tripled. Silver prices do fluctuate, but they generally move independent of the stock market. If you want a stable investment that can protect your purchasing power long term, consider buying Physical Silver.
Similar to the function of Gold in an investment portfolio, Silver can provide balance to your investments. Because Silver prices move independent of stocks and bonds, physical Silver may be the stable element your portfolio needs in the event of a downturn.
Additionally, Silver is recognized the world over as carrying intrinsic value. If you would consider selling or trading your Silver anywhere, at any time, you know there will always be a market for it.
HOW TO BUY PHYSICAL SILVER
Now that you understand why buying Silver is a good use of your investment dollar, you may need guidance regarding how to buy physical Silver. Luckily, buying physical Silver is easy. If you choose an established, well-regarded Precious Metals company, you can buy with confidence. Buying physical Silver should be an enjoyable part of your investment journey. Consider working with APMEX to experience the thrill of buying physical Silver. For example, you may choose a beautiful 1922 Silver Dollar. The 1922 Silver Dollar has bullion value due to its Silver content, as well as collectible value due to its brief minting.
The great thing about buying physical Silver is that there is absolutely no wrong reason to get started. Even if you simply find Silver captivating and want to own some, buying physical Silver from ZARZAR ensures you will be making a good investment choice.
Silver Spot Price FAQ
How is the spot silver price calculated?
Silver is a commodity that trades virtually 24 hours per day across many exchanges such as New York, Chicago, London, Zurich and Hong Kong. The most important exchange, however, when it comes to determining the spot silver price is COMEX. The spot price of silver is calculated using the near term futures contract price. By near term, that may mean the front month contract or the nearest contract with the most volume.
How often do spot silver prices change?
The price of silver is constantly changing. The spot price of silver changes every few seconds during market hours. Between domestic and foreign exchanges, spot silver prices update Sunday through Friday, from 6PM EST to 5:15PM EST each day. Spot prices remain static during that 45 minute down period from 5:15PM EST to 6PM EST each weekday, as well as from 5:15PM EST on Friday until 6PM EST on Sunday. Although silver and other markets may have periods in which they are very quiet, they also have periods in which prices change very rapidly.
What currency are spot silver prices quoted in?
The silver spot price is usually quoted in U.S. dollars (USD). However, markets all over the world can take the spot silver price in USD and simply convert it to local currency.
What exactly is the spot silver price referring to?
The spot silver price is quoting the price for 1 troy ounce of .999 fine silver.
Are spot silver prices the same all over the world?
Yes, the price of silver is the same all over the world. Exchanges and markets all over the world can take the current spot silver price in USD and convert that price to local currency.
Why can’t I buy silver at the spot silver price?
Silver is sold by dealers with a premium to the current spot price. When one is looking to sell metals to a dealer, the dealer may offer spot or slightly below the spot price for one’s metals. The dealer premium, as it is often called, represents the price at which a dealer will buy silver and the price at which a dealer will sell silver. The difference between the spread represents the dealer’s gross profit. This is how dealers make profits and stay in business.
What is the difference between bid and ask prices?
The bid price is the maximum offer available for a particular commodity at the present time. The ask price is the minimum asking price available for a particular commodity at the present time. More simply, if you want to buy, you will pay the ask price. If you want to sell, you will receive the bid price.
The difference between the two is referred to as the “bid-ask spread”, and often is a reliable indicator of an investment’s liquidity. The smaller the bid-ask spread is, the more liquid a commodity and the less “transaction fees” an investor will incur when getting into and out of investment positions.
Silver Futures and Paper Silver FAQ
What are silver futures contracts?
Silver futures contracts are an agreement for a buyer to purchase a fixed amount of silver from a seller, at a fixed price, at a specific time in the future. A simple example would be a buyer agreeing to purchase 5,000 troy ounces of silver, at $20/troy ounce, two months from present. If during those two months, the price of silver decreases $2, the seller would profit $10,000, as they could source the silver on the open market for $90,000 and then sell it via the futures contract for $100,000. If during those two months, the price of silver increases $2, the buyer would profit $10,000, as they have now purchased $110,000 worth of silver for only $100,000 cash.
Futures contracts also allow bullion dealers, including JM Bullion, to hedge their physical silver positions by electronically buying or selling metal out in the future to offset their physical inventory positions. As spot prices move up and down, the offsetting gains and losses between physical and futures positions ensure that movements in spot do not affect our company.
Metals futures contracts trade on a variety of worldwide exchanges, including the COMEX and NYMEX.
What is the COMEX?
The COMEX is the primary exchange for trading gold and silver futures contracts. Standard gold contracts are for 100 troy ounces of gold, while standard silver contracts are for 5,000 troy ounces of silver.
What is the NYMEX?
The NYMEX is the primary exchange for trading platinum and palladium futures contracts. Standard platinum contracts are for 50 troy ounces of platinum, while standard palladium contracts are for 100 troy ounces of palladium.
Could I buy silver by just buying a futures contract?
One could buy a silver futures contract and take delivery; however, this is not what normally happens. Taking delivery on a silver futures contract involves additional fees and costs, and one is limited in the product type. In addition, the amount of silver is fixed as one regular silver futures contract equates to 5000 ounces of silver.
What about leveraged or paper silver products? Are the prices the same?
The spot silver price is the price at which silver may change hands and be exchanged right now in the physical form. The spot silver price should not be confused with say the price of a silver based ETF, where an ETF’s price may be based on multiple factors.
Silver Price Factors FAQ
What are some things that can cause silver prices to change?
The price of silver is always in flux never sitting stagnant for very long. There are many different factors that can potentially affect silver price fluctuations. These factors may include, but are certainly not limited to: supply and demand, currency fluctuations, inflation fears, geopolitical risks, and asset allocations.
Do mining companies have any say in the price of silver?
The price of silver is determined by the laws of supply and demand. That being said, if the price of silver drops too low, then mining companies may elect to slow down operations and simply mine less silver. The fact is, if the price of silver gets too low, then these companies may mine silver but operate at a loss due to mining costs. Should silver fall to very low price, then these mining companies may scale back operations in an attempt to wait for higher prices or slow the supply of their silver reserves to the market, thus helping to bring the forces of supply and demand back into balance.
Why does silver trade around the clock?
The demand for silver is constantly changing. World markets are in a constant state of price discovery. Many other commodities and investment products also trade around the clock.
Is the price of silver too volatile for most investors?
While silver prices can be volatile at times, there are also times when prices are relatively quiet. In addition, many customers buying physical silver are buying it as a long-term investment and understand that short-term price fluctuations may be volatile.
When looking at silver prices and trying to make a forecast, I have heard people speak of the gold/silver ratio. What exactly is this?
The gold/silver ratio is simply a formula for determining how many ounces of silver it takes to buy one ounce of gold. Simply take the price of gold and divide by the price of silver — that is the ratio. Investors may use the ratio to try and determine the relative value of silver or gold and see if a potential buying opportunity may exist.
Someone told me silver prices are trending lower-is this true?
Silver has certainly seen some ups and downs in its price over the years. Since 2011 silver prices trended lower for years after nearly reaching the $50 per ounce mark. Lately the silver price has been going sideways for some time.
Other Silver Price FAQ
Is physical silver taxed?
In the USA, certain states have sales tax on silver bullion products. Depending on which state you are located in, and where you purchase your silver, you may be liable to pay sales or use tax on the purchase. For more information on individual states, reference our local buying guide.
How many grams are in a troy ounce of silver?
Silver is measured in troy ounces. Each troy ounce contains about 31.1034768 grams of silver, which is slightly higher than a standard ounce which has only 28 grams.
How many troy ounces are in a kilogram of silver?
There are 32.151 troy ounces in one kilogram of silver.
If spot silver is at $20 per ounce, why are some coins selling for over double that amount or more?
The spot price of silver may be only one factor to determine the value of a silver coin. Silver coins can have value not only for their silver content but also for any collectability or scarcity that they may have. While regular silver bullion coins will usually be not too far from the current spot price, a collector’s numismatic silver coin may sell for the spot price many times over. This is once again the laws of supply and demand at work.
I’m a new silver investor and just want to acquire as many ounces of metal as I can. What types of silver bullion products will get me the most ounces of silver for my U.S. dollars?
If you are looking to acquire as much silver as possible, then you may want to try and buy silver products as close to the spot price as possible. You will want to focus your buying efforts on the most cost-efficient bullion bars, coins, and rounds available. Silver rounds offer a great selection and relatively cost-efficient way to start stacking. In addition, products like silver bars of varying sizes and coins, such as American Silver Eagles and Canadian Silver Maple Leafs, may potentially be a good choice too.
Does the face value of a silver coin affect its worth?
Silver coins generally carry a small face value making them legal tender in their respective country of origin. That said, legal tender silver coins are generally priced based on their silver content. Although silver coins may be legal tender, they are not typically used in day to day transactions as their precious metal content value is usually far greater than their legal tender face value.
Do silver bars of the same type have a cost difference related to their size?
Silver bars will typically get less expensive on a per-ounce basis as the bar gets bigger. For example, a one ounce Sunshine Mint silver bar may sell for $22.68 while a 10 ounce Sunshine Mint silver bar may sell for $219.60. If you do the math, you’ll see that on an ounce for ounce basis the 10 ounce bar is a much better deal at only $21.96 per ounce compared to the one ounce bar at $22.68 per ounce.
Does the spot silver price include dealer markup or shipping costs?
The spot silver price does not reflect a dealer premium or any associated costs. Dealers will use the spot price to determine pricing by taking the spot price and adding their markup. These markups can range from less than one dollar to thousands of dollars over the spot price depending on the product and scarcity.
Are dealer premiums a fixed amount or percentage over the spot price of silver?
While dealers will use a fixed amount over spot, such as $.99 over spot for ABC coin, dealer premiums can and do change based on market conditions and product. There is no fixed percentage markup that is set in stone.
Am I going to lose money because the dealer will buy from me at spot or under the spot silver price?
While losing money is always a possibility with any type of investment, just because there is a dealer spread does not necessarily mean one will lose money on their silver holdings. For example, if one buys a silver round at 75¢ over the spot silver price, and one wanted to sell it back immediately, then yes he or she would likely lose money. In addition, should silver prices fall with all other factors being equal, he or she will lose money. On the other hand, should the spot silver price rise, it may rise more than enough for the purchaser to make a profit over and above what they originally paid for their bullion product. Most buyers of physical silver bullion buy their investments for the long-term and are not concerned with short-term day-to-day price fluctuations.
Can I get a similar price going to a local coin shop that I can buying silver online? They would both simply markup the spot silver price correct?
Dealer markups in precious metals are no different than in any other business. Dealers have a cost of doing business that they must take into account, and then they must have some type of profit margin in order to stay in business. Brick and mortar store dealers often must charge higher dealer premiums due to the higher cost of doing business. This is why in many cases one can buy precious metals from an online dealer at a lower relative cost.
If silver prices are constantly changing, how can I lock in a price when making a purchase?
Different dealers have different procedures when it comes to locking in a price. At JM Bullion, when you add products to your Cart, the product prices are “fluid” and will continue to change until you advance to Checkout. Once you advance to Checkout, your prices are locked in and displayed on the right side of the checkout form. These prices are final, and are held for 10 minutes while you complete the checkout process. If you take longer than 10 minutes to complete the checkout process, you will have the option to approve the new, updated prices to finalize your order.
Is the silver market price manipulated?
Silver price manipulation has been a hot topic of debate for some time. There is plenty of information available online for one to research and try to draw his or her own conclusions.
Where can I buy physical silver?
Right here on our website, of course. JM Bullion offers a wide variety of quality physical silver bullion products for purchase 24 hours a day, 7 days a week at the lowest prices in the industry. Browse some of our selection at the links below:
Please note that JM Bullion is the only major retailer in the industry currently offering FREE SHIPPING on all orders to the United States. This allows our customers to keep their transaction fees on silver bullion purchases at an absolute minimum.
How much money do I need to buy silver?
You can get started with as little as $100 (our minimum purchase). We offer a wide range of 1 oz and even fractional ounce silver products that start as low as $3 per piece. Many investors prefer silver to gold given that you don’t need a huge amount of capital to start investing in silver bullion.
Can I put silver in my IRA?
Yes. We work with a number of silver IRA custodians who provide “self directed IRAs”, which allow the investor to purchase physical silver bullion and receive the IRA tax benefits on the investment. To learn more, read our full page on bullion IRA investing.