Guide 01 · All guides
What Spot Price Means (and Why Your Invoice Is Never That Number)
The number on a quote screen is a reference for the metal. The invoice is that reference plus premium, shipping, and tax.
Spot price is a wholesale reference for one troy ounce of fine silver. It is not the price on a retail invoice. The number you see on a chart is a market quote for large, institutional metal. A real purchase adds a premium, shipping, insurance, and, in some states, sales tax.
That gap is not a trick. It is how physical silver is made, moved, and sold.
On a narrow screen, scroll sideways for the full diagram.
What “spot” actually quotes
Silver is priced in U.S. dollars per troy ounce. Charts, futures, and dealer “spot” feeds all use troy weight.
Two wholesale markets sit behind most of those feeds. Retail buyers do not trade either market. You are not buying a 5,000-ounce futures lot or a 1,000-ounce London bar when you order a few coins.
COMEX silver futures
On COMEX, part of CME Group, the standard silver futures contract (symbol SI) is 5,000 troy ounces. Exchange rules quote the contract in dollars and cents per troy ounce. Metal that can be delivered against that contract must assay to a minimum of 999 fineness and must be an exchange-approved brand, typically as five bars of about 1,000 troy ounces each. Most futures traders never take delivery. They close or roll the contract. The near-month futures price is still what many websites display as “spot.”
The LBMA Silver Price
In London, the physical market is over-the-counter. Once each working day at 12:00 London time, ICE Benchmark Administration runs an electronic auction that produces the LBMA Silver Price. That benchmark is published in U.S. dollars per troy ounce. The auction is for unallocated silver delivered in London, with settlement two good business days later (T+2). London Good Delivery silver bars are large institutional bars, roughly 1,000 troy ounces, with a minimum fineness of 999.0 parts per thousand.
Those two markets stay close to each other because large players can arbitrage between them.
On a narrow screen, scroll sideways for the full diagram.
Troy ounce, not kitchen ounce
A troy ounce is the precious-metals ounce, about 31.103 grams. It is heavier than the everyday (avoirdupois) ounce used for food and postage. Invoice math, mint specs, and density checks all use troy weight. If an invoice used regular ounces, the metal math would be wrong.
On a narrow screen, scroll sideways for the full diagram.
Bid, ask, and the moving quote
Spot is not a single frozen number. During market hours it moves as bids and offers change.
A bid is what a buyer is willing to pay. An ask (or offer) is what a seller is willing to accept. The gap between them is the spread. On a liquid wholesale screen the spread can be a few cents. On a retail website the “spot” line is usually a mid-market or near-month reference the dealer uses to price products. It is not a promise that you can buy one ounce at that print.
Dealers also have their own bid and ask. Their ask is the price they charge you to buy. Their bid is the price they will pay if you sell metal back. Those two retail prices straddle the wholesale reference. You should expect to pay more than spot when you buy and to receive less than spot, or only a small premium back, when you sell common bullion.
None of this is a live quote for your kitchen table. By the time you click “pay,” the wholesale number may have moved.
On a narrow screen, scroll sideways for the full diagram.
Paper silver and physical silver
“Paper” here means a claim or a contract, not a coin in your hand.
Futures, some unallocated accounts, and many exchange-traded products track or settle against a silver price. They are useful for hedging and for people who want price exposure without storing metal. They are not the same as a minted coin or a poured bar that you can weigh.
Physical silver is a specific product: a coin, round, or bar with a stated weight and fineness, sitting in a specific place. Turning a wholesale ounce into that product costs money. That is the main reason a retail invoice is never the spot print.
On a narrow screen, scroll sideways for the full diagram.
Allocated vs unallocated
Allocated metal in a vault is still physical, but you are relying on a custodian’s records and a vault’s door. Unallocated metal is a claim on a pool. Read the paperwork. The word “silver” on a statement does not tell you whether you own a serial-numbered bar.
Why a real invoice is always more than spot
A retail invoice is a bundle of costs.
The metal. Dealers usually start from a spot reference at the time they lock the order, or from a formula tied to that reference. That line is the closest thing on the page to the chart.
The premium. This is the extra over the metal value. It pays for minting or refining, the mint’s wholesale markup, distribution through authorized purchasers, the dealer’s operating costs, and the extra people will pay for a recognized brand. A sovereign 1 oz coin typically carries a higher premium than a generic bar with the same ounces of silver. Premiums also change when retail demand outruns mint output, even if the wholesale bar market looks well supplied. See Silver premiums explained.
Quantity. The unit price often falls as the order size rises, because handling a monster box costs less per ounce than handling a single coin. The invoice should show quantity and the per-unit or per-ounce price.
Shipping and insurance. Physical metal has to move in a tracked, insured package. That cost is mostly a fixed dollar amount, so it is a larger share of a small order than of a large one.
Sales tax. There is no federal sales tax on bullion. State and local rules vary. Some states exempt investment-grade coins and bars. Some tax them. Some exempt only above a dollar threshold. Do not assume the rate from a neighbor’s invoice. Check your own state’s current rule, or ask the dealer to show the tax line before you pay.
Payment-method fees. A bank wire often prices closer to the listed total. Cards and some instant-pay methods can add a surcharge. That surcharge is not “spot.” It is a processing cost.
Add those lines and you get the amount that leaves your account. That amount is the real purchase price. Walk the same stack on How to read a dealer invoice.
How to use spot without being misled
Use spot as a yardstick, not as a shopping price.
Compare apples to apples: same product, same mint or refiner, same quantity, same lock time, same shipping destination, same payment method. Then the difference is mostly premium and fees.
When you sell, run the same check in reverse. The relevant number is the dealer’s bid for that product, not last night’s London fix.
Labeled arithmetic (not a live quote)
These dollar moves are arithmetic only. They are not a live quote, not a typical premium, and not a recommendation.
- If two invoices for the same product, same quantity, and same payment method are $2 apart while spot is unchanged, you are looking at different premiums or fees.
- If spot jumped $1 and the invoice jumped $1, the premium may be unchanged.
- If spot jumped $1 and the invoice jumped $3, the extra is premium or scarcity, not the chart.
Spot will always be the clean number on the chart. A physical invoice will always be messier. That is not a defect in the metal. It is the cost of turning a wholesale ounce into something you can actually hold.
This article is educational only. It is not a recommendation to buy or sell silver, and it is not tax or investment advice.
FAQ
Is spot the price I pay at a dealer?
No. Spot price is a wholesale reference for one troy ounce of fine silver. It is not the price on a retail invoice. A real purchase adds a premium, shipping, insurance, and, in some states, sales tax.
What does “spot” actually quote?
Silver is priced in U.S. dollars per troy ounce. A troy ounce is about 31.103 grams. Charts, futures, and dealer “spot” feeds all use troy weight. Two wholesale markets sit behind most feeds: COMEX silver futures and the LBMA Silver Price in London.
Can a retail buyer trade COMEX or London Good Delivery?
No. Retail buyers do not trade either market. You are not buying a 5,000-ounce futures lot or a 1,000-ounce London bar when you order a few coins.
Why is a real invoice always more than spot?
It is a bundle: the metal, the premium, quantity, shipping and insurance, sales tax where it applies, and payment-method fees. That total is the real purchase price.
How should I use spot?
As a yardstick, not as a shopping price. Compare the same product, quantity, lock time, destination, and payment method. The $2 / $1 / $3 sketch in the article is labeled arithmetic, not a live quote.