Can I buy Physical Precious Metal at Spot Price?
The spot price for gold, silver, platinum, and palladium is typically the most common benchmark in the precious metals industry. To be clear, that price is not the same as the retail price you will pay when buying precious physical metals. Spot prices are a benchmark used by manufacturers, refiners, and consumers to determine the current value of a precious metal.
Here’s how it works: The spot price is set based on market data, primarily the London Fix (LBMA), which itself is an average of multiple global markets. The LBMA component is typically 50-60% of the spot price.
What is spot price?
The spot price of precious metal is the current base price of the metal. If you bought the metal at market value today, you would pay this price. The spot price is typically used for buying precious metals, such as silver and gold, in their physical form. The spot prices for silver, platinum, and palladium are available from various online sites.
What is the 2022 spot price of precious metals?
On Jan 12, 2022, the spot price of gold was US$1,823 per troy ounce. This means that you would expect to receive approximately $1,823 for every troy ounce of gold that you sell at that time. The spot price of palladium (one troy ounce) was $ 1,918. The figure was $980 for platinum and $23.01 for silver.
Physical gold, silver, and other precious metals are bought and sold in troy ounces. A troy ounce contains about 31 grams of metal (1 troy oz = 31.1034768 grams). An ounce is generally considered to be 28 grams or 480 grains. For reference, a grain is roughly equal to .0648 grams. A gold bar can come in different sizes, usually expressed as several troy ounces (e.g., 1 oz) or fractions of one kilogram (e.g., 1 kg).
How does that compare to retail?
Dealers set retail prices based on the cost of production and margin for profit. In other words, when you buy gold from a dealer (or any product for that matter), you pay for their operating expenses and profit margin.
Can you buy precious metal at the spot price?
It is possible to buy precious physical metals at a spot price. Many of the top bullion dealers in the world offer spot pricing on their products. However, they add a premium to this spot price, so there is a slight mark-up. It’s similar to purchasing something at full retail price when you could have negotiated a better deal with the salesperson.
You can buy precious physical metals at a spot price if you transport them yourself. This means paying for them in cash in person when they are delivered to you by courier service or mail-order company. When customers do this, they are not required to pay a premium over the spot price of the metal because it eliminates the need for middlemen and their associated fees.”
The difference between spot and retail prices is negligible when buying small quantities of precious metals but can be significant when you’re purchasing large amounts. Why do you have to pay extra? The difference covers dealer costs like shipping, insurance and in the case of a gold backed IRA account storage as well. In theory, you can buy precious metals at a spot price. In reality, precious metals dealers usually charge a premium over the spot price.