Why Am I Paying More Than Spot Price?

When ordering precious metals many people will look up the spot price and immediately wonder why they are not paying this??

In purchasing precious metals you will always be paying the spot price PLUS a premium…

So let’s define both of these first:

Spot Price : refers to the current market price on commodities like gold and silver and can fluctuate on a daily, hourly or even minute-by-minute basis. When you look at the spot price, what you are seeing is the rate in which precious metals are being traded based on their weight and metal content.

Premium : the price a customer pays over the spot value of a coin or bar.

Whether a precious metals dealer is selling you coins, proofs or bullion bars, you can expect to pay a premium over spot price. This premium typically covers the cost of overhead such as fabrication, distribution and storage. However, premiums can also rise significantly based on a coin’s rarity. It’s not uncommon to see higher premiums on numismatic or highly collectable coins. So, two coins with the exact same metal content could have vastly different costs if one of those coins is highly collectable.

It is important to remember that spot price reflects the value of the raw unrefined metal. The process of minting, refining and authenticating physical coins and bars clearly adds an expense above the spot price, so the premiums will fluctuate based on the current cost of these processes.

Here at MintBuilder we are always on the lookout for the lowest priced precious metals for our customers and are offering the lowest prices in the market!

Don’t believe it? Check out our shop today to see the competitive pricing we offer! We even include a “compare to” link to show other major metals dealers comparison prices in the industry. ☺ If you find an item for less go ahead and email us at [email protected] and we will be sure to look into it!