I’ve been following the silver market closely for a couple of months, checking spot price and physical silver price everyday. After comparing spot price and physical silver price of these few months, I realize something and I am going to share with everyone here.
If you often check the silver spot price during these few months, you will have known that silver spot price was going down until $27-$28. Many people become pessimistic about the price of silver, especially those who enter at above $40 last year. However, I spotted something which is good.
I remember when I was first started investing in physical silver, the sport price was around $32 and I got quoted RM115 to RM125 for 1oz of silver bar (Sunshine, Apmex and other low premium silver bars). After that, silver spot price continued to fall. At $30 to $31, my friend got his silver bar for Around RM112 to RM118 per oz. When the sport price hit $29, physical silver bar was trading at around RM108 to RM112.
Strange thing happened when the silver spot price went below $29 and fluctuated between $27 to $29. Physical silver was trading with the same price as in $29 during that period! And it’s happening not only in Malaysia. Some oversea dealers were also selling physical silver with a same price when the spot price was below $30.
So what do all these mean?
I assume that physical silver investors have a net safety price at around RM110 per oz for low premium silver bars and RM120 for low premium legal tender coins (American Silver Eagle, Canadian Maple leaf & etc). When the silver market “crash”, people who own paper silver will have overcome a huge loss while physical silver investors have a net safety price.
Some investors are not willing to invest in physical silver because of the premium. In my opinion, it’s worth to pay for the premium and get physical silver because it serves as a good and stable wealth preservation or protection. As Mike Maloney always stresses, if you don’t hold it, you don’t own it. And here it comes into a play.