Wednesday, October 7, 2009

Spot verses Coin Price of Gold and Silver

One of the most common questions I am asked about gold and silver, (especially small .9999 pure coins), is why the huge price difference between the spot price quoted on the Comex and the coin price. The reason is, there is always a premium for small denominations.

It is a bit like buying meat. You can’ get meat for the price of a cow. You have the premiums involved in dicing and slicing and processing to get it to your table. With smaller cuts, the price is even higher per pound or kg. With YOUnique (for example), their gold and silver are mostly small denominations in order to help people to save in small amounts, amounts they can afford. However, it does cost them a little more for the smaller denominations than it would, say, for a 1kg bar. But who's got a spare US$50K floating around for one of those?

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