Sunday, May 25, 2014

Cheapest Physical Silver Dealers in Singapore

If you have ever thought of buying silver as a physical precious metal investment in Singapore, do you know where you should go to buy some and invest at the cheapest price?

Most people will intuitively think their local jewellery or coin shop, but I am personally not so certain that they can offer you the best price. I've heard that the best prices you can get are from investor-to-investor direct sales, usually through a forum or personal contact. Since these investors do not own a physical retail shop or maintain a costly website, they do not have high mark-up over the spot price. However, it is a very opaque market, illiquid, unreliable and requires a higher degree of personal independence and knowledge to navigate this way.

Therefore, I think the best option for people interested in physical Silver is to buy from online dealers in Singapore that sell investment grade precious metals (IPM). Their prices are online and transparent for all to see. Since you can also open up multiple windows and also monitor the USD/SGD foreign exchange rate, the information of these online sellers are available for all to see. (hard to get ripped off, which is a good thing for us investors!)

The simplest way of finding out where you can buy the cheapest silver bullion is just to compare the prices you see online. I am comparing the prices without any special membership or other special connections. The prices that I have found and extracted from the various websites are the actual price that any public retail investor would be able to purchase from them at.

While just simply looking at prices is a good way, I have instead compared all the different sellers to find out what is their 1oz price for an investment grade silver bullion coin in SGD terms (if you decide to settle in USD, there would be a currency conversion fee that can be anywhere from 0.2% to 3% depending on the seller).

After I have found their 1oz price, I compare it to the spot silver price in SGD so that I can find out what is the particular premium that the sellers are charging. I would have thought that the premiums would be fairly constant in the industry, but I was wrong! The premium can range from 17% all the way to 45%, which is a huge range!

Note: The premium over spot price is roughly for 20-25oz of 1oz Silver Bullion coins. ($500-900 investment capital required) As the denomination of the Silver investment increases, the premium over spot price would drop as well. The drop in premium over spot can drop down to as low as 11% for half kilo or larger denominations.

Anyway, I have prepared a table below showing the different sellers in Singapore, the type of Silver bullion that they are selling, the minimum quantity, the minimum price, the per oz price and finally the calculated premium over spot price.


As you can see, the top 3 Silver bullion sellers are very tight and close with each other in offering competitive premiums. They are all under 18% premium over spot and within 1% from each other.

*I would like to highlight BullionStar's Vault Gram as a very special mention. Although it is not the exact same thing as physical delivery, it is very similar in the sense that the claim on the holdings are asset backed (every 1g of silver you have purchased, they have put aside 1g of silver in their vaults that belongs to you). However, they do not do physical delivery, since that adds admin, labour and delivery costs. That is totally fine, since they cut out these expenses and pass on the cost savings to us investors!

As I have previously said, investing in physical silver of over 500g and above can reduce the amount of premium paid over spot to 11%, which can be quite a substantial saving for an investment over $10,000. However, the Vault Gram has a total premium of about roughly 9% (5% premium + 3% spread + 1% friction). Therefore, investing with the Vault Gram actually drops the premium paid over spot to a mere 9% even with just an 80c investment instead of a $10,000 investment!


Personally, if you sleep better at night knowing that you have some physical silver on-hand, in your house or tucked away in a safe or vault, then please, by all means go out and get some physical!

However, maybe you are like me. As much as I like precious metals, I am a cycles investor. I want to purchase assets when they are cheap, and then I want to sell them when they are expensive. After that, I will take my capital and profits and invest into the next cheap asset class. I don't really view precious metals as the holy grail of investment asset classes, BUT I do recognize their power in retaining value, especially against horrible currencies. Definitely a portion of my assets will always be in precious metals, just for portfolio insurance! Given my personal view, I am very happy buying Vault Grams that are physically-backed, have a lower capital outlay cost and most importantly, have the lowest premiums over spot price available in the market.

I can't say for most of the dealers in my table regarding their service, reliability and product, except for BullionStar. I have done my own personal precious metal investments with them (link to a previous post about my first time investing with them and my subsequent review of them as a dealer), and I think that they are a great company. They have an excellent website and user interface. Their processing of orders with regards to buying and selling precious metals was very seamless and easy for me. Although they are not the absolute cheapest Silver dealer in Singapore at the moment, I think that they are extremely competitive in price and I don't mind forking out an extra 0.4% for the comfort knowing that I have dealt with them previously and they have been reliable so far.

That said, I hope this article helps anyone who is thinking about their options regarding physical silver investing in Singapore and manages to find a great company to handle your silver precious metal dealings!

Disclosure: I am a BullionStar affiliate, so I get a small commission from people that purchase items from them through my links here. My personal precious metals investments are stored with them and I pay fees as a regular customer.

7 comments:

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