American Bullion shares insights about the reasons of various precious metals products' price differences compared to their "Spot" prices

LOS ANGELES, CA, UNITED STATES, September 13, 2022 /EINPresswire.com/ -- First of all, what does “spot price” even mean?

Spot prices are most frequently referenced in relation to the price of commodity futures contracts, such as contracts for oil, wheat, or gold, but not the tangible products of gold and silver, such as coins or bars.

When it comes to physical gold, any type of raw bullion needs to be mined and refined, which incurs cost. The greater the purity, the greater the refining cost. And then, the gold bullion needs to be minted into bars or coins (which incurs additional expense, but can also reduce or eliminate the need for assaying at the time of sale). Finally, the finished products then need to be distributed through the supply chain to wholesalers, then retailers and ultimately to the buyers. Remember to add the costs of storage, shipments and insurance during this journey which adds up to the ultimate price tag.

Here’s an example of product cost above spot price. With the day’s spot price listed as $1,705, the United States Mint Website is advertising new uncirculated one-ounce Gold American Eagle coins for sale for $2,570.00 ea. directly to retail buyers.

Besides the beauty of its design, trustworthiness and popularity, American Eagles are also highly preferred for other reasons, such as being a very discreet asset. According to ICTA (Industry Council of Tangible Assets), most products are subject to be reported by IRS Form 1099-B when selling back to dealers over a certain qty/weight. But American Eagle products are not on that list.

Market pricing can be somewhat volatile daily, but is predicated greatly by the market conditions of supply and demand.

This is also a good reason to speak with an experienced precious metals dealer, like American Bullion, who is also a US Mint Listed Dealer. There are a lot of considerations when selecting strategies, as to which metals and type of products are to be held. Additionally, those strategy options can diversify even further, depending on whether they are held in personal possession, or by way of a Gold IRA.

John Reese
American Bullion, Inc.
+1 310-689-7720
info@americanbullion.com
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