To become familiar with precious metals, it is important to understand the spot price as a terminology. The spot price is the price for the raw commodity “Gold” or the raw commodity “Silver” as well as other precious metals. A good way to think of it is the value of the metal if it were to be dug out of the ground. When buying physical precious metals most people like to have their physcial product in some organized form such as a coin or a bar. This is where the premium comes into play. Coutries typically mint coins and that will add a premium to the coins the make. This premium is normally regulated by the government of the country. Bars are normally made by private manufacturers and there is cost involved with refining and producing the bars. A good rule of thumb for bars relates to the size of the bar. It generally costs the same amount to produce small bars as it does larger bars. This means that the premium “per ounce” is lower for larger bars.
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