Can I Buy Silver at the Silver Spot Price?

Can I Buy Silver at the Silver Spot Price?


Written by John Rothans

Oct 11, 2019

The spot price of silver reflects the current market price of one ounce of silver. It doesn’t necessarily reflect the time or energy it takes to design, mint, or ship a silver coin. It also doesn’t factor in the supply or demand for an individual silver coin.

Here, we’ll explain why offers to buy silver at the spot price can often end up being too good to be true—for these reasons and more.

What Is the Spot Price of Silver?

The silver spot price refers to the current purchase or sale price for immediate, or “on the spot,” delivery of silver, as opposed to a silver future price. If you could buy silver before it became a bar or coin, you’d essentially pay the spot price. Spot price can also be applied to commodities like gold, oil, copper, wheat, bitcoins, and electricity.

When you see the spot price of silver, it’s quoted (usually in U.S. dollars) as the cost of one troy ounce of the metal. One troy ounce works out to be about 31.1034768 grams, or 1.097142857143 ounces, of silver. Even though a troy ounce is slightly heavier than a standard ounce, you’ll often see silver prices listed as $/oz. or $/ounce without mentioning “troy.”

Precious metals companies use spot prices to help guide the pricing of their products, such as silver bars or silver coins.

Many factors can affect the spot price of silver, including currency values, world events, silver supply and demand, market speculation, and changes in silver futures. The spot price fluctuates minute by minute on markets in New York, London, Zurich, Chicago, Hong Kong, and China.

Can You Buy Physical Silver at the Spot Price?

Typically, the answer is no. You generally can’t buy gold at the spot price, either.

Purchasing silver coins or bars at the spot price would be similar to attempting to buy a car for just the cost of the auto-making materials, such as steel, aluminum, glass, and rubber. In other words, it’s virtually impossible.

Spot prices fail to take into consideration the expenses related to the design, manufacturing, shipping, and other elements of a silver product. Spot prices also don’t account for the nearly unquantifiable appeal of a silver product’s historical significance or limited availability.

Keep in mind that the price of a silver bullion coin is figured mostly by the spot price of silver and the weight of the coin. Certified silver coin pricing goes a step further by also factoring in the availability and condition of a coin.

Another silver product, called a silver round, usually costs less than a silver bullion coin because A) the market price of a round is connected only to the amount of metal it contains, and B) a round is not legal tender. A silver round might look like a coin, but it’s more closely associated with bars than bullion. Rounds are also more subject to volatility in spot pricing than coins.

Warning: Some dealers might offer something that looks like a silver coin at a low price, but it could be a round. How can you tell the difference between the two? No round can have the same specifications as a government-issued coin. A round can never have the same diameter, thickness, and mass as a legal-tender coin. Size limitations help prevent counterfeiting and make it harder to defraud coin-operated technologies, but those same regulations can also lead to rounds being produced in some unexpected weights, like 1/20 ounce, 2 ounces, 5 ounces, and 10 ounces.

Curious about the spot price of silver today? We’re happy to talk about silver prices with you. Call 1-844-307-1589 to speak with a knowledgeable Account Executive.


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