Frequently Asked Questions

Bullion is the term for a coin or a bar in an easily recognizable form and using the spot price as the basis for its cost to you. There are millions of bullion coins, which is why the premium on them is small and they can be purchased for only a small amount over the spot price.

The spot price, or the price you see in the media for gold and silver, is different from the cost to buy coins and bars. However, the spot price is the basis to determine the price of them.

Spot

The spot price is what major institutional buyers and bullion banks are paying on commodities exchanges around the world for all sorts of commodities, including gold and silver. These trades are primarily futures contracts and do not involve physical delivery. The spot price is about the futures value. This is the value for delivery of gold or silver in the next 30 days.

When you see oil in the news for $30 a barrel, that’s the spot price. This is the price for a barrel of oil that will be delivered in the next month. Let’s say it’s September now, and we say, “Gold is at $1,690.” That’s the amount the market is saying gold is valued at for delivery in the middle of October.The Chicago Mercantile Exchange, often called COMEX, is one example of a futures market. It deals in commodities like metals, agriculture, oil, etc.

Fractional Gold

Other less liquid products like the fractional gold one tenth, one fourth, and one half ounce Gold Eagles carry higher premiums, because of the costs associated with minting them. Let’s look at some examples:

Silver Eagles

The most common silver bullion coin is the American Silver Eagle, so we’ll use this for our example on how pricing is determined. For this example, let’s say the current spot price is $24. The production and minting costs on average about $2.50 per coin, and the dealer profit is $1.50 to $2 per coin, depending on the number of coins being purchased. In this case, we have $24 + $2.50 + $1.50. This means your price would be $28. This is the ask price.

(Side note: A common amount to buy from a dealer is a 20-coin roll. Buy less than 20 and you’ll pay more per coin, because it’s time-consuming for a dealer to work with small or odd amounts.) The price you can expect if you were to sell those coins to a dealer like My Gold Advisor would be spot plus about $1 to $1.50 per Silver Eagle. Therefore, you’d receive about $25 to $25.50. This would be the bid price.

Note: The current premiums for Silver Eagles specifically are the highest they’ve ever been. The physical price recently was near a 100% premium over Spot. This is due to supply and demand issues. If you’re looking for the best bang for your buck, you may consider other silver bullion products. My Gold Advisor is buying back Silver Eagles at premiums that reflect current market trends.

Gold Eagles

Gold Eagles are similar but have smaller margins in most cases. Let’s say the spot price for gold is $1,900 per ounce. The mint and production premium is about 3.5%, and a fair dealer markup is about 3% for one or two coins (larger amounts would generally result in a lower markup by the dealer). Therefore, a fair price to pay would be $1,900 + $66.50 + $57, or $2,023.50 per coin.

Confiscation is not only unlikely; there is not a single record of it ever happening. Dealers claim FDR confiscated all of the gold in America in the 1930s. The truth is, he didn’t confiscate any gold at all when he issued his executive order in 1933. He issued an executive order to nationalize gold and made it illegal for Americans to own more than five ounces of gold personally. The gold was bought and paid for by the federal government at fair market value.

In 1933 gold was used as money and the dollar was tied to gold. Since the government wanted to make more money without making more gold, they had to nationalize gold and put dollar bills into circulation for the gold it no longer backed. Gold is no longer used as money and we are not on the gold standard. Now, all the federal government has to do to spend more money is to sell treasury bonds to the Federal Reserve central bank, which in turn fires up the printing press and prints additional fiat dollars out of thin air.

The average investor doesn’t need much space to store their physical metals. $100,000 in gold bullion or $20,000 in silver bullion will fit in a normal-sized coffee cup in a small-to-medium gun safe. But if you don’t want to store them at home, there’s an acceptable alternative: private vaults. Here’s what you need to know.

What Services Are Provided?

Third-party, privately insured vaults differ on the services provided. Some are very large institutions that simply hold your metals for a monthly fee based on value. Others like My Gold Advisor are specialized boutiques with unique services.

My Gold Advisor offers storage services with an instant cash and wire option. With this option, a client has the ability to call us and sell any portion of their metals with the proceeds wired to them the same day if they’d like. They can also have any part of their portfolio shipped by FEDEX to any location in the world by simply placing a phone call. Some vaults require a week to ship your metals to a dealer to be sold, and then you could be looking at another week to get a check from the sale.

Allocated vs. Unallocated

If you ever store precious metals in a vault, we highly encourage you to choose allocated storage. This means the metal you’re storing is specifically earmarked as yours, and you can get access to it any time you’d like. With unallocated storage, your metals may be mixed with other clients’ metals.

For My Gold Advisor, eQRP, and Vitruvian Venture members, we cover all vaulting fees for the metals you purchase through us. That’s right, literally no fee to vault if a world-class, private, regularly audited, double-insured vault in the United States or an international location.

Watching key ratios can provide important indicators for when to hold and when to buy. These ratios help us understand when gold and/or silver are going from undervalued to overvalued. These ratios help us decide when we might want to switch some of our portfolio into another asset class.

Gold to Silver Ratio

One key ratio we watch is the ratio between gold and silver. The ratio of gold to silver in 2023 is about 78:1, which means it takes 78 ounces of silver to buy one ounce of gold. When this drops to 50:1, we’d consider selling some of our silver and converting it into gold. When it takes less silver to buy an ounce of gold (like 12 ounces of silver to one ounce of gold), then gold is heading “lower” and silver is heading “higher.”

During periods of history when gold and silver served as the foundation of the world’s economy, this ratio was typically between 14 and 16. Whenever we suffer a global monetary crisis, whenever people begin to fear that the world’s paper currency system will break down, the price of silver tends to rise far more than gold.

The industry standard is to send payment to a dealer for your metals before they ship to you. But even though this is standard procedure, it does open you up to some risk. What if the dealer doesn’t fulfill his end of the deal? When selecting a dealer to work with, the best way to avoid this scam is to use a dealer you’ve been referred to by a trusted friend or advisor who has done significant business with the dealer and had a consistently great experience.

If you’re working with a dealer for the first time that’s kind of a mystery, I highly recommend starting with a small order and testing the dealer. Once you wire your money, there’s no way to stop it or get it back. A wire is permanent, and the money is gone. Be careful wiring only to someone you trust implicitly.