Is it easy to liquidate silver?

Category: Finance 321

When you invest in anything, it is a good idea to find out what the liquidity of that investment is. Liquidity refers to the ease with which you can sell at a premium close to what you paid for it. Precious metals like silver and gold are more liquid than most people think.

The price of physical silver is based on the spot price. Your investment should cost only a few percentage points more than the spot price and sell and a lower percentage below the spot. This is referred to as the “spread”. If the spread is low, then the metal is more liquid. The most commonly recognized products are the easiest to sell. They are more liquid.

Some of these products include silver bullion coins like the Australian Kangaroo, the American Eagle Silver Coins, the Canadian Maple leaf coins, and others. When you sell bullion coins whose value is not solely based on the purity and the weight but also on the fact that bullion coins are made by government mints and their value is backed by the government.

There is a distinct correlation between liquidity and premium. In some cases like with the American Eagle, you may end up paying more to buy but selling less than other well-known products. Products produced by private mints usually have lower premiums but they tend to be less liquid. Think of it as you would think of a car: you would be fine with spending more money on a globally recognized brand like BMW, Toyota, or Volkswagen than you would be buying a foreign brand you’ve never seen on the highway.

Where can you sell bullion?

The best place to sell bullion depends on a variety of factors:

  • The kind of silver you want to sell
  • How quickly do you want to sell

Sell to a Coin Shop

Try selling your silver coins to a coin shop. Coin shops offer good prices for silver coins that are in good condition. It might be harder to sell scrap silver. Coin shops cater to a diverse pool of customers most of whom are coin collectors. When selling, do not accept to get something close to what you paid for your gold when you first bought it/them. The coin shop has to make a profit and this gets factored into the price that they will offer when you sell silver. For scrap silver, the coin shop would act as a middleman.  Coin Shops are a great option if you want to sell your silver coins quickly.

Bullion Dealers

There are a lot of bullion dealers that you can find around your area or online. If you don’t want cash for your bullion immediately, some dealers will allow you to trade in your silver for some other precious metals like gold.  It might take a couple of days for your transaction to through but 24 hours is the least time you can expect to wait for payment.

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