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This morning I surfed to an online precious metals dealer's website to see where we're at regarding retailer markups on one ounce gold and silver products and and found that it's now above $12 per ounce in Canadian dollars against the spot price. Mike Maloney at goldsilver.com and producer of 'The Hidden Secrets of Money' series available for free on Youtube has predicted for a few years that markups would shoot higher when demand would inevitably exceed supply and he's been proven right.
I'm a long term precious metals investor. You could even call me a 'silver stacker'. I consider silver one of the strongest buys out there. It remains the only commodity that hasn't broken its 1980 high. That alone makes it an attractive buy but there are so many reasons that make silver a prime investment choice that a book could be written about it. In fact, Mike Maloney's book, 'Guide To Investing In Gold And Silver' is the most successful selling self-help financial advice book.
I've been at it about 10 years now, buying a little here, a little there. I remember making purchases in 2013 and paying as little as .79 cents markup. A one dollar markup was common just a few years ago when demand dropped. The Canadian dollar was flying at par with the US dollar and I took advantage of my good fortune since silver is priced in US dollars. I was able to get a some silver bars and coins for less than $20 CND per ounce. I can tell you we'll never see low prices like that again in Canada.
At today's exchange rate, I would only get about 79 cents US with one Canadian dollar. Not only has the Canadian dollar decreased in value by more than 20% since my first purchases but the markup has increased $12 (or more in some cases). That's a 1,200 % markup on the original markup. For Americans, the markup compared to 2013 markups is about 1,000%. Shipping costs have also increased due to higher gas prices, adding to the pain.
The spot price of silver closed at $23.09 US or $29.55 CND on Friday (Nov. 26, '21) but this is not what you'd pay for when buying from a retailer. Spot prices are used in futures markets such as the Comex. While it's mostly a paper market, it controls the spot price. One contract is worth 5,000 ounces of silver. When the contract expires, it's usually just rolled over and no actual silver is handled.
Physical demand has been high since the start of the pandemic. Mints around the world, including the US Mint and Royal Canadian Mint have taken turns shutting down production of silver bars / coins when demand grew too strong. They actually ran out of the metal for brief periods. This helped push the retail markup which includes miners / producers and even higher. If you buy a Canadian Mint 'Silver Maple' one ounce coin today online with a credit card, the cost will be $42.31 CND which includes the credit card transaction fee.
The difference between the actual retail cost of one Silver Maple and the spot price is $12.76 CND or $9.97 US but don't let that disappoint you. According the USDebtClock.org, the price of silver, factoring the massive inflation we're now experiencing, should be closer to $3,092 US an ounce. At just $42 per ounce, silver shines as a sweet deal indeed!
Demand has really started to pick up and should drive prices higher. As a result, we should start seeing some insane markups. There are some sellers / scammers on Ebay pushing silver at twice the going rate or they are selling at the going rate but charging enormous shipping fees. One seller was trying to get $40 to ship one ounce of silver and I know some poor sucker will fall for it eventually so beware online scammers.
Your best bet if considering investing in silver and precious metals is to buy from a reputable dealer. I've placed a link below to OwnX. Join OwnX, link your bank account and once you're all set, start making purchases instantly or on a recurring basis, weekly or monthly. I've found it to be the easiest, most convenient and efficient way to get your hands on real silver (or gold if that's what you prefer). I make a monthly recurring $75 monthly purchase. I can cash out my silver anytime with a few clicks of the mouse. That's all it takes.
It's never too late to get started.
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