Is This Happening To Anyone Else Or Am I In A Bad Location?

My local shops usually beat the web. They're pretty good about sticking with a percent over spot.

I'm beginning to wonder if we're witnessing a decoupling of the physical market from the virtual, or digital market. Remember: This year's peaks in silver and gold came to an end when margin requirements were raised on futures traders--the drop from the top was not caused by any fundamental change in underlying conditions. If two distinct markets were to emerge at a time when prices were declining, those dealing in the physical stuff could be expected to resist the pressure to adjust their asking prices downward simply to track the spot price. Consider that it's customary for dealers in bullion coins to charge a premium above spot on sales that is significantly farther away from spot than the price they'll offer for purchases. At some point, couldn't the "premium" move so far away from the spot price that all players would have to acknowledge that it's not a premium at all--that there are now two distinct markets, the physical and the virtual?

The decoupling argument is usually made by people who don't want to sell cheaper than what they purchased for. My dealer is currently selling at $45/ounce because he doesn't want the loss. I personally would rather book the loss and reinvest the money in something that would turn over again, but that's just what I would do if I owned that business.

As for my personal stash... I'm not selling.

There is pressure in the silver market these days that suggests that the manipulated paper prices are diverging from the actual physical metal price. We've seen this before from time to time. Usually it takes the form of a metal's paper price being down but no metal is available for sale because people are holding it until the price recovers.

One aspect of this is that the CME / COMEX has done an excellent job of making itself completely irrelevant. The out and out theft of REGISTERED serial numbered gold and silver bars from MF Global customers' allocated accounts is absolutely outrageous and it is causing a lot of investors to move away from paper gold and silver. While we are early in this process, it may well get to the point where the futures market in PMs ceases to exist because no one will be willing to take the increasing level of risk that their investment may be stolen.

There are many aspects of the investing arena where TRUST is the primary ingredient. If that trust is lost, then so is that market. For example: The big mutual funds know this and so no customer has ever lost money in a mutual fund company's money market account. A few MM funds have "broken the buck" (become worth less than $1 per share) but the funds' management immediately transferred money from the company accounts into the MM funds to maintain the $1 share price. They knew that if they did not, their customers would grab what was left in their accounts and run. MFG is now dead but the CME / COMEX are still here... for now.

If the government really wants to find the registered gold and silver bars that MF Global clients "lost", perhaps they should check out the secure storage vaults used by JP Morgan and HSBC? Just a thought.

They are two different things. Would you accept a receipt for 1000 ASE if you want 1000 ASE?

Yeah, I'm sure that the James Boys, the Daltons, and Bonnie and Clyde looked at it in just that way!

If a dealer doesn't have enough turnover in his ASE sales, he can find himself in a position like the one described by the O.P: all his inventory was purchased at a higher price and to make a living, he has to price accordingly.

Most of my local spots are like you posted but one pawn shop buys for a little under spot and sells for $1 over on Peace and $2 over on Morgans and ASE so he gets my business. I guess I'm lucky it's there for me. NE Missouri is the area.