Premium Percentages

[FiveStacks]

Hi guys, just wanted to know your thoughts on what an ideal premium percentage should be when purchasing silver?

My previous buys have all ranged from 33.37% (lowest) and 88.78% (highest).

I also bought a 100g bar for £82.56 when the spot price was £13.88 (premium = £19.95 @ 143.73%) - is my premium percentage correct for this? Price was high as i bought the bar on its own from BBP with VAT included.

I have been using a premium calculator but a rough figure would be gotten using the following method if i was doing it manually:

 

1. Find the difference between the price of the product (bar or coin) and the gold/silver spot price. For example, if a silver bar is $18 and the silver spot price is $15, then the difference is $3.
2. Divide the difference from Step 1 by the spot price. (In the previous example, 3/15 = 0.2)
3. Convert the decimal to a percentage by moving the decimal point two places to the right. (Ex: 0.2 = 20%)
   
   Many thanks for all help and advice.

 

[HighlandTiger]

When stacking silver, personally I wouldn't pay more than 10% over spot for silver coins and I wouldn't pay a penny over spot for any other type of silver.

 

 

[FiveStacks]

5 minutes ago, HighlandTiger said:

When stacking silver, personally I wouldn't pay more than 10% over spot for silver coins and I wouldn't pay a penny over spot for any other type of silver.

 

 

Thanks for the reply! Unfortunately I'm yet to come across any deals that are close to 10% over spot, i did only start stacking around 6 months ago though.

[Divmad]

19 hours ago, HighlandTiger said:

When stacking silver, personally I wouldn't pay more than 10% over spot for silver coins and I wouldn't pay a penny over spot for any other type of silver.

 

 

Highland Tiger, are there any circumstances when you would end up paying a premium for Sterling silver objects (flatware, cutlery, ornaments etc)? I see on E Bay that silver cutlery often goes for more than its spot value, leaving me way behind in the bidding process when I thought I was being a smart "value" buyer.

[Bimetallic]

Your silver premiums should be less than 20%, and about 3% for gold.

For silver bars you should approach 10%, whereas some of the premium coins will approach 20% depending on the coin and dealer. Where are you seeing 33 to 89% premiums?

[FiveStacks]

32 minutes ago, Bimetallic said:

Your silver premiums should be less than 20%, and about 3% for gold.

For silver bars you should approach 10%, whereas some of the premium coins will approach 20% depending on the coin and dealer. Where are you seeing 33 to 89% premiums?

Hi. So for example today I bought 6 1oz britannias each costing £24.59, while the spot price was £18.39. The premium percentage calculator put this at a 33.71% premium. Purchase was made on coininvest which tends to actually work out cheaper than most other places. Am I completely getting my figures wrong or is that correct and im just overpaying?

[Booky586]

21 minutes ago, FiveStacks said:

Hi. So for example today I bought 6 1oz britannias each costing £24.59, while the spot price was £18.39. The premium percentage calculator put this at a 33.71% premium. Purchase was made on coininvest which tends to actually work out cheaper than most other places. Am I completely getting my figures wrong or is that correct and im just overpaying?

Your figures look correct.

In comparison, 25 1oz Britannia's sold on TSF today for £570 including postage, which is £22.80 per coin, giving a premium of approx. 24%. I'd say that's an excellent price (from one of the top sellers) which would be hard to beat, so I think a 20% premium is going to be difficult too achieve here in the UK.

 

[Bimetallic]

1 hour ago, Booky586 said:

Your figures look correct.

In comparison, 25 1oz Britannia's sold on TSF today for £570 including postage, which is £22.80 per coin, giving a premium of approx. 24%. I'd say that's an excellent price (from one of the top sellers) which would be hard to beat, so I think a 20% premium is going to be difficult too achieve here in the UK.

 

I just looked and premiums are unusually high still. Looking at Silver.com, one of the lowest priced dealers in North America, premiums are about 22% on Eagles and Britannias. Before the pandemic, Eagles were around 18% and Brits maybe 15%. I guess the UK has higher premiums. You should still be able to get less than 30%.

[85swat85]

On 03/10/2020 at 16:10, FiveStacks said:

I also bought a 100g bar for £82.56 when the spot price was £13.88 (premium = £19.95 @ 143.73%) - is my premium percentage correct for this?

How did you calculate premium? My calculation shows premium 11,80 (85%)

[FiveStacks]

51 minutes ago, 85swat85 said:

How did you calculate premium? My calculation shows premium 11,80 (85%)

https://bullionsupermarket.com/silver/premium-calculator/

 

This shows it at current spot prices, previously I had been using the rule in my original post.

[HighlandTiger]

On 04/10/2020 at 12:31, Divmad said:

Highland Tiger, are there any circumstances when you would end up paying a premium for Sterling silver objects (flatware, cutlery, ornaments etc)? I see on E Bay that silver cutlery often goes for more than its spot value, leaving me way behind in the bidding process when I thought I was being a smart "value" buyer.

The only time I would pay over the odds for flatware, is if it was hallmarked in Chester, Exeter, Glasgow, Edinburgh or Dublin. There is a decent collecting market for those.

Be patient with eBay, you will find cheap stuff, and it often pays to send in a cheeky low offer at times

[FoolzGold]

@FiveStacks - you're not crazy, premiums on new silver coins have always been high and since COVID they've become higher still.

I think HighlandTiger is talking about premiums when buying coins on the secondary market rather than new coins fresh from the dealer. That's the only way you could be looking at 10% or less over spot.

Over the last few years the lowest premium I've had on a new silver 1 or 2oz coin from a European dealer was 17.5%. Many semi-numismatic (collectible) coins have premiums of 20%, 30%, 40% or more.

[HighlandTiger]

35 minutes ago, FoolzGold said:

@FiveStacks - you're not crazy, premiums on new silver coins have always been high and since COVID they've become higher still.

I think HighlandTiger is talking about premiums when buying coins on the secondary market rather than new coins fresh from the dealer. That's the only way you could be looking at 10% or less over spot.

Over the last few years the lowest premium I've had on a new silver 1 or 2oz coin from a European dealer was 17.5%. Many semi-numismatic (collectible) coins have premiums of 20%, 30%, 40% or more.

Why anybody would buy new coins is beyond me. Wait a year or two and you'll always find them cheaper. 

[LawrenceChard]

On 03/10/2020 at 15:10, FiveStacks said:

Hi guys, just wanted to know your thoughts on what an ideal premium percentage should be when purchasing silver?

My previous buys have all ranged from 33.37% (lowest) and 88.78% (highest).

I also bought a 100g bar for £82.56 when the spot price was £13.88 (premium = £19.95 @ 143.73%) - is my premium percentage correct for this? Price was high as i bought the bar on its own from BBP with VAT included.

 

You just mentioned VAT.

This is all important as you are in the UK.

With a few exceptions, you will have to pay VAT on silvr purchases in the UK, EU, or if you import them.

If you buy for delivery or storage outside the EU, (or UK from January 1st), you can avoid VAT, unless you subsequently have it shipped to the UK.

[FiveStacks]

1 hour ago, LawrenceChard said:

You just mentioned VAT.

This is all important as you are in the UK.

With a few exceptions, you will have to pay VAT on silvr purchases in the UK, EU, or if you import them.

If you buy for delivery or storage outside the EU, (or UK from January 1st), you can avoid VAT, unless you subsequently have it shipped to the UK.

Hi,

 

I made the purchase above from coininvest which doesn't include VAT, but charges a delivery fee on top (this wasnt counted in my percentages).

Alternatively i buy from bullionbypost, which does include VAT but has free delivery. 

Coininvest has the better total prices 9 times out of 10, so unless theyre hiding their VAT within the premium (i dont think thats correct based on comparison to other websites) then the figures i've given you are exempt of VAT and are just the premium figures.

[Woodsy]

On 06/10/2020 at 09:19, 85swat85 said:

How did you calculate premium? My calculation shows premium 11,80 (85%)

 

On a Calculator (Price paid) ÷ (Spot price) % Button then = i.e £23 ÷ 18.30 % = 125.68 the premium is the amount above 100 which is 25.68%

I hope this helps.

[LawrenceChard]

18 minutes ago, FiveStacks said:

Hi,

 

I made the purchase above from coininvest which doesn't include VAT, but charges a delivery fee on top (this wasnt counted in my percentages).

Alternatively i buy from bullionbypost, which does include VAT but has free delivery. 

Coininvest has the better total prices 9 times out of 10, so unless theyre hiding their VAT within the premium (i dont think thats correct based on comparison to other websites) then the figures i've given you are exempt of VAT and are just the premium figures.

CoinInvest are in Germany, which being in the EU, also has VAT on silver, although their rate is only 19%, so it will or should be included.

At @ChardsCoinandBullionDealer, we might not always be the most competitive on "new" silver coins or bars, but still aim to be very close. When we have secondary market silver, we should beat most prices ( it does sell out very fast). I would be surprised if BbP beat our prices on most silver stuff.

We concentrate slightly more on gold, and aim to be the most competitive on most gold bullion products (coins and bars) most of the time.

[FiveStacks]

9 minutes ago, LawrenceChard said:

CoinInvest are in Germany, which being in the EU, also has VAT on silver, although their rate is only 19%, so it will or should be included.

At @ChardsCoinandBullionDealer, we might not always be the most competitive on "new" silver coins or bars, but still aim to be very close. When we have secondary market silver, we should beat most prices ( it does sell out very fast). I would be surprised if BbP beat our prices on most silver stuff.

We concentrate slightly more on gold, and aim to be the most competitive on most gold bullion products (coins and bars) most of the time.

I'll check it out, thanks for the advice!

17 minutes ago, Woodsy said:

 

On a Calculator (Price paid) ÷ (Spot price) % Button then = i.e £23 ÷ 18.30 % = 125.68 the premium is the amount above 100 which is 25.68%

I hope this helps.

Thanks mate, i'll use this going forward.

[Erolroller]

On 05/10/2020 at 23:13, Booky586 said:

Your figures look correct.

In comparison, 25 1oz Britannia's sold on TSF today for £570 including postage, which is £22.80 per coin, giving a premium of approx. 24%. I'd say that's an excellent price (from one of the top sellers) which would be hard to beat, so I think a 20% premium is going to be difficult too achieve here in the UK.

 

I'm selling 175 x 1oz maple leafs for £25 each regardless of spot goes to £22 soon.