Buying silver online in Europe: €22.05 to €24 per ounce

Buying silver online in Europe: €22.05 to €24 per ounce

Silver prices have gone through the roof and Spanish buyers notice it with every click. With the metal trading around €18.38/oz on the market, European dealers sell the physical coin for anywhere between €22.05 — the result of a 20% premium over spot — and the €24 some ask for a Kangaroo or a Maple. The difference between paying €22 or €24 for the same thing — one ounce of pure silver — is the thread running through a conversation that starts by asking for dealer names and ends up debating whether to buy scrap silver, whether the ID some websites ask for is reasonable, or whether the price of silver has anything to do with what it costs to get it out of the ground.

Where to buy precious metals in Spain and Europe

The map of providers under discussion includes Spanish shops such as El Andorrano, El Dorado Coins — run by a well-known figure in the sector —, Numismática Ventippo, Silbertresor and Dracma Metales, credited with the best prices in the country. Elsewhere in Europe there is the German Coininvest — sister company of SilverToGo —, the Belgian GoldSilver, the also German SilverToGo, the French Acheter-or-argent.fr and CelticGold, linked to an unspecified Baltic country. The British Inversoro rounds off the list, although since brexit it ships from France.

Prices fluctuate. The French shop offers the Arcas de Noe (Noah's Ark coins) at €22.90 and Krugerrands at €23.97, with shipping costs of €22. At the opposite end, El Dorado Coins charged €6.90 for shipping. The Belgians have ounces at €22.27. The Kangaroo goes up to €23.10 and the Maple to €23.79. The Bear and the Bison are the only coins that stay in the lower range.

Scrap silver: the advice almost nobody disputes

A buyer with contacts in Barcelona finds someone who will sell him gold and silver at spot+1% in scrap form, and floats it as a bargain. The answer is unanimous: no. Scrap silver is only bought by smelters or jewellers, and at prices well below wholesale. Whoever sells it melts it down for jewellers, so the same person placing it will buy it back when the time comes, with the margin in his favour. For someone investing long-term with no intention of selling, the argument carries less weight; for anyone who may one day want liquidity, scrap silver is a dead end.

Why do some dealers ask for ID?

Spanish shops request a photo of both sides of the document even for orders of €200. Coininvest does not. The complaint about the data protection practices of those websites comes with a knowing tone: it seems there might be an interest in keeping a record of who buys what. The suspicion is not backed by evidence, but the contrast between the German and the Spanish practice is plain to see.

The real cost of an ounce

The discussion drifts towards the price of silver versus what it costs to produce. With €24 you can buy 14 litres of petrol, and the calculation thrown out is that from the moment silver is extracted from the ground until it reaches your door it has consumed more energy than can be bought with that ounce. Extraction, refining, transport, minting, distribution, licences, security and packaging are all added on top of the metal. The conclusion drawn is that the final price is metal plus production cost plus profit, and that the market sets the price regardless of all that.

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The point where the analysis gets stuck is the usual one: is silver cheap or expensive? Some look at spot and see an opportunity; others look at the premium, the shipping and the resale and see no business in it. The ounce will keep costing whatever someone is willing to pay for it.