Confused by Premiums vs What to Buy

[Thunderbird]

You can no doubt tell that I'm new to all of this so I'm thankful for your patience and understanding with my question.  

 

As I get some spare cash I purchase 10 or so oz so I've currently only purchased approx 73 Oz over the last 3 months.  I've got a large family (6 kids) so I'm happy with that pace as I've got other obligations.  I'm lucky in that I've got a reputable bullion dealer within a 20 minute drive from my home.  They offer a wide variety of gold and silver bullion prices with, what I consider to be, reasonable premiums around the 14-20%  mark (or more) depending upon the product (mint) and I don't need to worry about shipping costs.  This is where my confusion begins.  

 

I tend to buy 1oz bars and they currently offer .999 bars from the Sunshine, Heraeus, Scotsdate and JM.  Now, I look at these products and they are all .999 and exactly the same other then the designs stamped into them by their various manufacturers.  Price wise though there can be a difference of anywhere between a few cents to almost a dollar even though the spot price is the same between all of them.

 

Now, in the normal day to day world when it comes time to eventually sell these products (I don't plan to but eventually someone is going to sell them) there will be a different ask price for each product based upon the spot price at the time.  Thats assuming the world goes on without any major financial changes BUT if (when) there is a major incident and there is a necessity to sell any of these products is it really going to make much of a difference which mint it came from as long as it's as .999 as stamped?

 

In other words, assuming the products are all .999 pure does it make more financial sense to purchase products with a lower premium or is it better to purchase based upon the mint recognition?  

[motorbikez]

 

 

In other words, assuming the products are all .999 pure does it make more financial sense to purchase products with a lower premium or is it better to purchase based upon the mint recognition?  

 

 

In a word yes,welcome to the forum Thunderbird. If you became a forced seller and hold purely stacker bullion bars or coins,(Canda maples) you would just get a percentage of spot no matter what form of 999 silver it was from a dealer.If however you have more interesting bars and coins you may get more selling privately.This is the dilemma new stackers/collectors face.

[Thunderbird]

Thanks so much.  That makes it a bit clearer at least.  

[Shamatti]

Not actually quite so simple. In an ongoing, non SHTF market, silver will tend to keep it's premium. When time comes to sell, Pamp will always attract a higher sale price over spot than say Sunshine Mint might. This is why I always advise people to buy what they like. However, 2 things need to be born in mind: Firstly, if you are going to sell back to a dealer you are likely to get spot price, or spot plus a few cents, so you would loose out - however, selling on the second hand market the original premium will remain. You can still sell Pamp for spot plus a few more cents than Sunshine Mint. The other thing to remember is that if S does H the F then all silver is equal. Whether you paid $100 for a slabbed MS70 or $15 for bullion, an ounce is an ounce, and that is all it is worth.

 

You also need to avoid trends. There are a lot of series at the moment which people are buying with very high premiums. My worry is that once the novelty has worn off, and everyone has moved on, that demand will dwindle and the premiums will drop substantially on those coins/rounds. For example, the Zombucks rounds. I don't trust them to hold their premium after the dust has settled. I have not purchased any.

 

For me, if you want bars buy Pamp. They are more expensive, but they have a reputation going way back. They will always command a decent premium on the resale market. Even a dealer should give you spot plus a larger margin than other bars for Pamp.

 

I guess you have to ask yourself why you are stacking.