GoldSilver2u.com’s High Premium and Wide Spread Gap
Back in November 2011, I reviewed GoldSilver2u.com’s above spot premium as well as their buyback spread. Just recently, I had an conversation with a reader of mine and we touched the topic of GoldSilver2u.com. I had a rude shock when I realized the premium and spread for GoldSilver2u.com has widen – in a big way!
Today, we are going to pay GoldSilver2u.com a revisit. Armed with my faithful calculator, we are going to revised our previous calculation on GoldSilver2u.com’s pricing. At current point of writing, the international spot price for silver is USD$34.78.
Back to November 2011: Premium Above Spot
^ Screen capture from GoldSilver2u.com on 26th Nov 2011
Refering back to the previous screen capture I made in 26th November, let us calculate the premium above spot back then.
| # | Product | Price | Spot Price | Difference | Above Spot % |
|---|---|---|---|---|---|
| 1. | PAMP SUISSE 999 | 4,060.13 | 3,250.00 | 1,183.25 | 24.92% |
| 2. | TWIN TOWER 999 | 1,242.90 | 1,010.75 | 232.15 | 22.96% |
Premium above spot in between 22% – 25% is acceptable.
Forward to March 2012 – Current Premium Above Spot
^ Screen captured from GoldSilver2u.com on 3rd March 2012
| # | Product | Price | Spot Price | Difference | Above Spot % |
|---|---|---|---|---|---|
| 1. | PAMP SUISSE 999 | 4,583.25 | 3,400.00 | 1,183.25 | 34.80% |
| 2. | TWIN TOWER 999 | 1,457.07 | 1,057.40 | 399.67 | 37.80% |
Considering Malaysia does not have import tax on silver bars, there is no reason for such high premium. Bare in mind that we are dealing with decent weight here (10oz and 1kg), not silver bars of one ouncers.
I would give it for PAMP Suisse as it is always known as the Rolls Royce of silver bars but 37.80% above spot price for TWIN TOWER silver bars? Really?
Conclusion for GoldSilver2u.com’s Premium Above Spot
In about 3 months time, GoldSilver2u.com has elevated up their asking by almost 15%! By crunching the figure of before and after, we found out that PAMP SUISSE silver bar has raised 9.88% while Tomei’s house brand TWIN TOWER silver bar is up by 14.84%.
At any given time, paying almost 35% and beyond for silver bar is on the expensive side in my opinion. Also, it does not make any sense to me on why would TOMEI’s house brand asking almost 38% considering it is not even an international brand!
Next Stop: Buyback Spread
^ Screen captured from GoldSilver2u.com on 3rd March 2012
| # | Product | Price | Buyback Price | Difference | Above Spot % |
|---|---|---|---|---|---|
| 1. | PAMP SUISSE 999 | 4,583.25 | 3,569.50 | 1,013.75 | 28.40% |
| 2. | TWIN TOWER 999 | 1,457.07 | 1,110.11 | 346.96 | 31.25% |
Another deep cut from GoldSilver2u.com. 28.40% spread! It is even worst if you have invested on their TWIN TOWER series, 31.25% spread!
Back to November 2011: Buyback Spread
Here is what I calculated previously back in November 2011. I did not screen capture the buy back screen but the numbers are as followed:
| # | Product | Price | Buyback Price | Difference | Above Spot % |
|---|---|---|---|---|---|
| 1. | PAMP SUISSE 999 | 4,060.13 | 3,288.70 | 771.43 | 23.45% |
| 2. | TWIN TOWER 999 | 1,242.90 | 1,056.46 | 186.44 | 17.65% |
Buyback spread of 23.45% is considered on the high side while 17.65% is acceptable.
Conclusion for GoldSilver2u.com’s Buyback Spread
It is ridiculous.
To have a better visual on how wide the spread gap are, let’s us look at it from a different presepective.
If you buy a PAMP Suisse silver bar from GoldSilver2u.com at today’s price of USD$34.78, with 28.40% spread, you will only breakeven when silver spot price hit USD$48.50.
If you buy a TWIN TOWER silver bar at today’s price of USD$34.78, with 31.25% spread, you will only breakeven when silver spot price hit USD$50.80!
GoldSilver2u.com has widen the buyback spread under stealth mode. I would say this is rather unfair to those earlier buyer.
Please do your own due diligence before investing.
Further readings:
You may be interested in the following articles I previously wrote:
Gold Silver Resources (GSR2u.com.my) VS PublicGold VS GoldSilver2u.com:
investsilvermalaysia.com/gold-silver-resources-gsr2u-com-my-vs-publicgold-vs-goldsilver2u-com/
PublicGold’s Spot Price:
investsilvermalaysia.com/how-much-is-publicgolds-silver-spot-price/GoldSilver2u.com’s Spot Price:
investsilvermalaysia.com/how-much-is-goldsilver2u-coms-silver/Understanding Spread for Buying and Selling:
investsilvermalaysia.com/understanding-spread-for-buying-and-selling-gold-or-silver/
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