Pay less
The US government recently brought a fraud case (PDF) against Monex Precious Metals. This reminded me that I’ve wanted to write this quick essay for a long time, with useful tips on how to buy precious metals as cheaply as possible. So many people overpay. It especially bothers me when the elderly get scammed or misled. Monex made investing in bullion overly complicated. I can’t speak to the fraud allegations specifically — and they were ultimately dismissed for complex legal reasons — but it’s clear that Monex customers paid too much for what they received.
In this installment, I compare and report silver bullion prices. In the future, I’ll look at gold.
Get off the phone
The first rule is for you old-timers. If you’re buying precious metals over the phone, you’re probably overpaying.
Think about the business model of firms like Monex that do much or all of their business over the phone. You’re talking to a person. That person has to be paid — i.e. they’re earning a commission on the sale. That’s a nontrivial overhead cost that online dealers don’t bear, and as a result these phone-based companies tend to charge a lot more than online dealers.
Unless you’re a wealthy investor who buys 400 oz. gold bars (costing over $500,000) over the phone at 1% over spot, you’ll do much better online. This is especially true if a firm called you offering to sell you gold or silver. Forget about it. I know a lot of you are quite accustomed to conducting business over the phone, and might not trust the web as much, but in this case you need to adapt. The alternative is to waste your money, and in some cases, to be scammed. (Be especially wary of any outfit that tells you that the US government might seize certain types of gold bullion, as part of a pitch to get you to buy overpriced numismatic pieces — it’s a scam.)
Find the lowest price
This seems obvious, but so many people don’t do it. For this article, I systematically compared silver prices at 21 online dealers in North America. I did it on New Year’s Day, when trading was suspended for much of the day, and the silver spot price didn’t move much.
Long story short, the cheapest way to own silver (and gold) is to use BullionVault. I’m very impressed with them. They’ve done exactly what I’d do if I went into the precious metals business — ruthlessly wring out costs. You can get vaulted silver at BullionVault for pennies over the spot price. They have the best prices for allocated or vaulted metal that I know of, and they’re quite transparent with their third-party audits and their whole business model.
If you want to physically posses your silver, as many of us do, you’ll find the best prices for most silver products at SD Bullion, Silver.com, and BOLD Precious Metals. It’s also worth looking at Provident, BGASC, Bullion Exchanges, Gainesville Coins, JM Bullion, and Golden Eagle Coins. For rounds, Golden State Mint has a much larger selection than most dealers and good prices.
(Note that allocated silver and physical in-your-hands silver are not mutually exclusive. You can procure both.)
Here’s my spreadsheet. Note that the point of this price comparison is the comparison aspect. The spreadsheet’s prices are not right now prices — they’re New Year’s Day prices. The point is to show you the relative prices among dealers, so that you know who tends to have the lowest prices. I’ve done this price check several times over the past few months and the New Year’s Day snapshot is consistent with all the others I took — SD Bullion and Silver.com always offer the best prices.
I priced out the following 11 scenarios:
- Order 1 consists of one American Eagle, one Canadian Maple Leaf, one Australian Kangaroo, and one British Britannia, plus shipping. Basically these are the four Anglophone countries that happen to mint bullion coins.
- I compared a couple of six-ounce purchases to see what happens when you punch through most dealers’ free shipping threshold ($99).
- 10 American Eagles
- 20 American Eagles
- A monster box of 500 American Eagles
- One 2 oz British Queen’s Beast coin (the Bull)
- The dealer’s cheapest 10 oz bar
- One 10 oz Royal Canadian Mint bar (gorgeous)
- One 10 oz Britannia bar (even more gorgeous)
- The dealer’s cheapest kilo bar
- One Freedom Girl round, because it’s the most gorgeous round or coin I’ve ever seen:
(Freedom Girl was designed by artist Heidi Wastweet. If you need a good coin or medallion design I’d be sure check her availability.)
All prices in the spreadsheet are check/wire prices, which is the lowest tier and the one you should stick with if at all possible. Every dealer charges higher prices for credit/debit card purchases, due to the fees and the fraud and chargeback risk. (No dealers seem to be taking advantage of the much lower fees for most debit cards (see the Durbin Amendment). They might not be aware of them.)
Remember what I said before — find the lowest price. That means paying by check or wire. If this isn’t possible, here’s what I recommend: use a cash back card. If you don’t have one, get one. You can get anywhere from 1–3% cash back. At 3% you’ll get back most of the credit card premium you pay over the check/wire price. A quick DuckDuckGo search yields lots of resources for finding the best cash back card: NerdWallet, CreditCards.com, BankRate.com, and Money Crashers all have comprehensive reviews.
Some notes on the spreadsheet: If you see NA, that means the dealer didn’t have that item in stock. In some cases this was because they only carry “random year” coins, instead of the 2018 or 2019 coins I was looking for. As a result, those dealers weren’t able to participate in Order 1. (FYI, random year coins will likely be pre-owned “secondary market” coins, and they might be tarnished or otherwise blemished.)
Results
Here are the winners of the price comparisons. You can see all the details and everyone’s prices in the spreadsheet.
- Order 1: Silver.com
- 3 Eagles and 3 Maple Leaves: Silver.com
- 3 Britannias and 3 Kangaroos: SD Bullion
- 10 Eagles: BOLD Precious Metals
- Tube of 20 Eagles: BOLD Precious Metals
- Monster box of 500 Eagles: SD Bullion
- 2 ounce British Queen’s Beast (the Bull): Silver.com
- Cheapest 10 oz bar: SilverGoldBull
- 10 oz Royal Canadian Mint bar: Bullion Exchanges
- 10 oz Britannia bar: JM Bullion
- Cheapest kilo bar: Silver.com
- Freedom Girl round: Golden State Mint
Logistics
You can exercise more control over your precious metals shipments — and reduce the chance of theft — by signing up for all the carriers’ programs. They are:
UPS and FedEx will let you put a hold on the delivery if you’re out of town, or divert the delivery to a specific UPS Store, Customer Center, or FedEx Office location. (This is especially helpful if you know you won’t be home at the time of delivery.) All three of them offer tracking updates via text message, which will give you advance notice of delivery days and time slots.
For dealers, I recommend that you educate your customers about these carrier programs and link to them so that they can easily sign up.
That’s all folks. Don’t get ripped off. When you buy precious metals, you need to get the lowest possible price. Otherwise you’re eating into already thin margins. There’s no good reason to pay more — all of these dealers are reliable and well-established, so the differentiator is price. Next time I’ll look at gold.
NOTE 1: I earn affiliate commissions from some dealers, but I let the chips fall where they fell. For example, Silver.com and BOLD don’t have affiliate programs, but they did very well, and as you saw above, I recommended them.
NOTE 2: Silver.com is owned by JM Bullion. GovMint and ModernCoinMart are owned by Asset Marketing Services.
Joe Duarte is a social scientist and data scientist. You can reach him at gravity@protonmail.com.
