Asking to those that understand the ins and outs of the precious metal markets.
Wanting to drop $5K into precious metals. cheapest silver ounce is $30.61 which tells me I'm loosing $4/ounce because of the spot price. Similiar idea with gold. Help walk me through the idea of purchasing these items even though they are seemingly dropping in value as soon as I buy them.
Also, how would you divide your precious metal portfolio 20/80 gold/silver. 50/50? and is that by dollar amount or by ounce, i was thinking of buying 2oz gold, and 20-25 ounce silver. gold was going to be 1oz bars, while silver 1oz coins.
please help me make sense of this, I know our paper dollar is loosing value and will continue to do so.
EDIT/UPDATE: I pulled the trigger, and I put PedoJoes stimulus money into silver. Bought 140 ounces
The difference between spot price and the price you're paying is what's called the "premium." It covers the costs of minting and distributing the rounds. A 10-15% premium is very normal.
What's interesting in this market is that most premiums are around 25%, which means there's a disconnect between the spot price (which is based on paper value of silver) and the real-world price. Theories abound on why this is, including manipulation of the market.
Given current conditions, the $30.61 price is very fair. A silver bull market typically takes a few years to unroll, so move forward only if you're looking to hold onto the bullion for multiple years; if you expect to need that money in three months, don't do it.