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What is the Spot Price of Silver?
When people refer to the silver spot price, or the spot price of any metal for that matter, they are referring to the price at which the metal may be exchanged and delivered upon now. In other words, the spot price is the price at which silver is currently trading. Spot prices are often referred to in the silver and gold markets, as well as crude oil and other commodities. Price is in a constant state of discovery and is watched by banks, financial institutions, dealers and retail investors.
All of the products on our website are priced based on a premium to spot price, and therefore you will notice that prices update every few seconds during market hours. This allows customers to invest based on the most up to date market conditions possible.
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.
Silver Spot Price FAQ
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.
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.
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.
The spot silver price is quoting the price for 1 troy ounce of .999 fine silver.
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 the price in USD to local currency.
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.
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
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.
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.
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.
One could buy a silver futures contract and take delivery. This is not what normally happens, however. 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.
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
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.
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.
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.
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.
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.
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
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.
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.
There are 32.151 troy ounces in one kilogram of silver.
Precious metals dealers have numerous costs and often work in a very competitive environment with slim margins. Because of this, they offer a discount to buyers who “pay cash” as they do not then have to pay the fees associated with credit card use.
At JM Bullion, we offer a 4% discount on all “cash payments” which include personal checks, money orders, and cashier’s checks. The 4% credit/debit card surcharge helps dealers cover the costs associated with merchant processing fees. If bullion dealers did not add a surcharge on credit/debit card orders, bullion dealers would not be able to afford the option to buyers as they would be operating at a loss.
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.
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.
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 typically their precious metal content value is far greater than their legal tender face value.
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.
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.
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.
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. Should the spot silver price rise, however, 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.
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.
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.
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.
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.
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.
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.