iIt's not the premium that matters it is the spread. If there is a premium on the offer then there should be a premium on the bid. Let's say the spot is $21.06/21.1
A dealer may quote $20/$22
He could be making $2 an ounce if he has buyers and sellers. If he sells loads at $22 he has to make sure he can buy loads at $20.
If he thinks the price may rise to $23 before he can buy then he must charge for this risk.
Put yourself in the shoes of the dealer. At what price would you sell me 100ozs of silver?
Your analysis is correct. It is tough to recoup the premium when selling. You lose some even on 100 oz bars.
Most of the 1-10 ounce buyers are newbie punters. They buy into the hype without realizing that small quantities are a bad deal.
Most people are better off buying SLV via the stock market.
I guess they figure if you are foolish enough to buy silver right now, you'll pay the premium too.
I don't understand why you would buy 1 or 10 troy oz bars with a high premiums?? For example, If silver is selling for $20 an oz and the dealer has a premium of $10, then your net cost per oz is $30. Say next year, the price of silver goes up to $40 an oz, and it's time to sell. Does the premium go up as well, stay the same, or do you take a chance that you loose the premium that you paid a year ago??? To me a troy oz is a troy oz...the cost is the same. I understand that the dealers need to mark it up in order to make a profit, but that should not be more than a couple of bucks per oz, right? I mean they buy it under spot and sell it over spot, the difference is their profit. Or am I missing something???
