Secrets To Buying Gold And Silver: Spot Price, Premium, Numismatic

The secrets to buying Gold and Silver at market price is better understood when you know what the terms spot price, premium price and numismatic value means.  Understanding these terms and how market price is determined will assist you and help you make the right decision before you invest.

Since the time I was in grade school when my Dad showed me his collection of half dollars and silver dollars that he had been collecting for years stored in the trusty Ziploc bag hidden in the depths of his closet at that time … till now as I still check pennies for the wheat back or the dates and edges of silver coins for that rare gem – collecting and saving coins has always been one of those subtle hobbies that you keep on adding to over the years.

Before my Dad passed away, he spent the last year of his life looking into gold and silver.  Looking for a way he could somehow help find a way to invest what little money he had left to provide a more secure financial future for his sons and grandsons.

As I listened to him on numerous occasions explain what insider gems he found out, I started researching and diving into things on my own.

Rekindling an old hobby and finding out how I could start creating something for a more sound future as well as something to pass on to my sons and grandkids when my time had come.

Educating myself on the secrets to buying gold and silver and what to look for – brought me to the terminology spot price, premium price and the holy grail for us collector’s – numismatic value.

How can I buy silver and gold at market price? Google it I thought – but alas paid advertisement and the “we have the best price in town” blasted me on the first page.

I knew that buying gold and silver was a good idea.  But I wanted to make sure that I bought at the right price and the company I purchased from was a legitimate source and had some way to prove it.

Occasionally I would come across someone selling slightly below market price, however most precious metals dealers usually charge more than the market price.

So much for the simple just look here, click here and off we go.

As I dove deeper into the terms for gold and silver -spot price, premium and numismatic.  I found it interesting how the precious metals industry does work.

In marketing, everything that you buy, or sell is worth what someone is willing to pay for it.  It’s not necessarily worth that price, but the value is what someone is ‘willing to pay’ for that item.  The physical effort it costs someone to make something factored in by the demand for that item.

Simply put Item Cost = (Cost of the supply) x (market demand)

Gold and silver both follow the same equation and determine what you will have to pay in order to own these sought after precious metals.

SPOT PRICE

According to a quick search in Google the definition of spot price reads: “The spot price is the current price in the marketplace at which a given asset—such as a security, commodity, or currency—can be bought or sold for immediate delivery.”

Stocks, bonds, commodities, currencies and everything bought and sold on the market has a spot price attached to it.  From day to day the various markets and exchanges will affect the spot price.

Every human effort put into gold and silver is incorporated into the market price.  Finding the gold and silver, extracting out of the ground and purifying it all goes into that price.  If the market price didn’t cover that – there would be no mines to supply the precious metals.

The Spot Price is equivalent to the human effort to supply the precious metals to meet the market demands.

The final step is turning the raw ore into a form that we as consumers can exchange and trust.    Any type of raw bullion needs to be minted into a bar or coin.  Also take into consideration the content of the precious metal and how refined it actually is.  Then the bullion or coin needs to be distributed through the supply chain (sometimes several handlers) to you and I who are looking to purchase.

PREMIUM

Human effort and integrity come into play when minting the precious metal into a coin and verifying its purity.

The price we pay to have the precious metal minted into a form we can trust and use is called a Premium.

Premium is equivalent to the human effort required to mint and distribute the precious metals to meet market demand.

Numismatic Value

The final factor to consider before buying gold and silver is called the “Numismatic Value”.

Again, we check Google for its definition of numismatic value:  “Numismatic value is the price you can reasonably expect to receive through the sale of a circulated, uncirculated or proof coin from your collection. … Coins with a grade of 70 are considered flawless. Supply is another factor used to assign numismatic value.”

The collectible value of a specific coin or paper money is what is considered numismatic.  The value of the collectible gold or silver coin increases depending on the rarity and the demand for it.

The more rare and higher the demand for the collectible will determine the price.

Numismatic value is the equivalent to the collectible value based on a specific coins quality and rareness.

Combining the spot price plus the premium and factor in numismatic value you arrive at the cost that you will have to pay in order to purchase a particular gold and silver coin or bullion bar.

Knowing these basic factors will allow you to have an intelligent conversation with any dealer who is selling precious metal bars or coins.  Thus, ensuring that you get the best possible deal from your dealer.

The secrets of buying gold and silver and understanding spot price, premium price and the numismatic value will help prevent you from being taken advantage.  Using this information will help you make the right choices when investing in yourself by investing in precious metals.

The value of investing in gold and silver is well understood.  For centuries Gold has been the true tangible form of wealth.

With the unprecedented times we live in, investing in precious metals should be a consideration for everyone, even for the sake of diversifying to provide yourself and your family with a more secure financial future.

As always, my best to you for continued success and happiness in business and in life.

Kind regards –

Rick

CEO Worksmarter4u / Worksmarter4yourfuture / VideoCreatives

Investing in Precious Metals

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