This reflects the following factors that affect all dealers in precious metals:
- Logistics
It costs significantly more to transport and vault silver than it does gold. With silver being approximately 50% less dense than gold and less than 1/50th of the price, silver takes up over 100 times more space than gold for the same dollar value.
A million dollars of gold fits in a briefcase. A million dollars of silver fits on a pallet.
- Refining costs
Most silver is from mines that are predominantly copper or lead/zinc mines. Silver in its raw state forms compounds with these other metals and it takes a significant amount of energy and chemicals to separate the relatively small amount of silver. With silver being over 50 times less valuable than gold the percentage cost of refining silver is higher than gold, which tends not to form strong bonds with other metals.
- Market forces
The gold market is significantly larger and more competitive than silver and one has to meet the market. The market for silver is less competitive, and this does factor into the price spread to a small degree. Because of our scale, ABC Bullion offers highly competitive pricing.