That’s what happened in the spring of 2020.Ī bag with a $100 face value means that there are either 1,000 dimes, or 400 quarters, or some combination. The markup is called the “premium” and varies based on the type of metal you buy.Ĭoins, for example, usually have a higher markup than bars.Īnd while the physical price usually follows the spot price very closely, it’s not uncommon for the price of the physical metal to significantly diverge.
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Physical gold and silver usually trade at the spot price from the futures market, plus a markup to account for the cost of minting, transporting and storing the precious metal. It’s the intersection of what buyers agree they are willing to pay for a contract on the futures markets, and the price at which sellers are willing to sell. This is where the “paper” spot price of silver is determined. Most simply close their positions well before the contract’s settlement date. Usually, investors have no intention of taking possession of the gold. In fact, only a tiny portion of these contracts ever result in physical delivery. But while the gold price can quickly change, most of the underlying gold does not change hands. This constant activity is why gold’s price can sometimes be volatile. Today, contracts like these change hands over and over again among miners, traders, speculators, banks, hedge funds and pension funds. To learn more about Sovereign Man Confidential, Click here.Ī silver futures contract is represented by a 5,000 oz silver bar with a fineness of at least 999 (99.9%).
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Anyone who took action could sell half their silver position to recover their initial investment, and walk away with a pile of free silver. Months after our alert, the price of silver more than doubled. That’s what you do if your goal is to hold precious metals, as opposed to making paper money trading in precious metals. If the actual price of the precious metals is higher when the contract matures, most people sell their futures contract for a profit.īut another option is to take physical delivery of the precious metal. The strategy was to take physical delivery of a futures contract.Ī futures contract means agreeing now to pay a specific price later. Everyone else was forced to pay up to a 100% premium above the spot price, or simply wait (and risk the price of silver rising even more in the meantime). The demand for physical precious metals had increased due to all the global uncertainties – and yet the spot price hadn’t risen.Īt that time, we alerted our members to a way to pay a. And for 5,000 years, gold has held the most prominent and secure role as a store of value – especially during uncertain times.īack in March and April 2020, premiums on gold and silver skyrocketed. It therefore makes sense to hold some of your savings in an asset with real value. But the dollar, financial markets, and even social stability are at risk. There is no telling exactly what will happen next. Precious metals, in this environment, are an insurance policy. It is easier to find the best gold price when you have the background on how the price is determined, which we also discuss.Īnd then we also dive into why it is so important to buy precious metals today. In 2021 we have seen runaway government spending and money printing, an unstable economy due to COVID lockdowns, and a political climate characterized by regular eruptions into riots and destruction.īut like with any other purchase, when buying gold, you want to make sure you get the most bang for your buck. Looking to buy gold or silver as an insurance policy against the uncertainty the world faces today? Below we reveal the cheapest ways to buy gold and silver, and how you can find the least expensive places to buy gold coins, gold bars, and silver – including various online retailers.īuying gold and silver makes a lot of sense, especially within the context of the unprecedented events of the past 18 months.
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