Can Lower Bid/Ask Spreads Boost Your Silver Investment Returns?

 

Demand for silver is so high these days that sellers are having a difficult time keeping up. The result has been higher prices and higher bid/ask spreads. The good news is lower bid/ask spreads can mean a better return for your investment. Below, the experienced precious metals dealers from First National Bullion, the best place to buy Scottsdale silver bars, take a closer look at some popular silver products and what the bid/ask spread is for each of them.



What Is the Bid/Ask Spread?

The bid/ask spread is the difference between what a buyer pays for silver and what a seller receives when buying or selling a silver product. Silver bid/ask spreads are high these days because of high demand and labor shortages.

The American Silver Eagle

The U.S. Mint has been having difficulty keeping up with silver demand even though they’re required by law to maintain a sufficient supply. The result is a higher bid/ask spread, since the premiums for silver American Eagle designs are high. Sellers only make a profit if the spot price of silver is higher when the American Eagle coin is sold back. Otherwise, the return is generally on the lower side, at around 10 to 12 percent based on current prices for silver.

Vault Silver

Vault silver is cheaper than what’s common for the American Silver Eagle. If you purchase vault silver, you’ll have a higher return for your investment because of a lower bid/ask spread. And because of the higher spot prices for silver, you’ll make more of a profit if you sell your silver. The average return for your investment could be around 20 percent or higher, depending on what kind of silver products you purchase and how much you spend.

Avoiding Silver Products that Are Difficult to Sell


You’ll enjoy a better return on your investment if you avoid things like so-called “rare” silver coins and commemorative coins or bars. These items are difficult to sell, since they only appeal to certain buyers. Instead, focus on traditional or “regular” silver products that are more common and easier to sell. You’ll only get a higher return for your investment if you can find buyers willing to pay at least the current spot price for silver.

Knowing When to Sell and When to Buy

It’s also good to watch when you buy and sell. Keep an eye on spot prices for silver. You’ll get a higher return if you sell when silver prices are higher and buy when silver products are available for a lower price.

Working with an Investment Professional

Lastly, consider working with an investment professional familiar with silver products like the ones discussed above. You can get tips on when it’s best to sell and buy. In some instances, investment professionals will charge a minimal fee if you want them to sell and buy on your behalf. If you choose this option, make sure you’re aware of any related fees so you don’t cut into your return on your investment too much.

 

If you’re interested in maximizing your silver returns, reach out to the professionals at First National Bullion, the silver and gold dealers Scottsdale residents trust for outstanding service and industry knowledge. We can answer all your questions and help you find all the information you need on how precious metals can figure into your investment planning decisions. Give one of our experienced dealers a call today.

 

The statements made in this blog are opinions, and past performance is not indicative of future returns. Precious metals, like all investments, carry risk. Precious metals and coins may appreciate, depreciate, or stay the same in cash value depending on a variety of factors. First National Bullion does not guarantee, and its website and employees make no representation, that any metals for sale will appreciate sufficiently to earn the customers a profit. The decision to buy, sell, or borrow precious metals and which precious metals to purchase, borrow, or sell are made at the customer’s sole discretion.