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 Replies: 31 / Views: 2,676 |
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Pillar of the Community
United States
2734 Posts |
One thing to keep in mind about what causes the recent 'shortages' of government-backed 'legal tender' silver bullion coins in particular (American Silver Eagle, Canadian Maple Leaf, Mexican Libertad, Australia Kookaburra/Koala, Chinese Panda, etc.) is that these coins are (supposed) to be made from newly-mined silver, mined in the issuing country. In other words, the governments' Mints can't just buy 1000-oz. silver bars on the open market and melt them down to make more coins, in periods of huge demand (like right now!). "Industrial" Silver consumers, unlike the Gov't. Mints, have no restrictions upon where they can purchase their raw silver. Yes, 'paper' futures sell-offs and falling industrial demand affect the 'spot' price, but the premiums on 'legal tender' bullion coins basically reflect that their silver supply is 'restricted' and that the Gov't. Mints can't just buy raw silver on the open market. Nothing is stopping private mints from melting down 1000-oz. bars to make silver rounds or smaller (10 & 100 oz.) bars  At the coin show today, someone said "Silver fell again today." I replied " Paper silver fell today! For physical (silver), it just means more premium over spot!"  (Best said when you're sitting next to an Engelhard 100 oz. bar & a roll of Maple Leafs! ) Edited by DNA
11/01/2008 12:24 am
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Moderator
 United States
189215 Posts |
Quote:
I replied "Paper silver fell today! For physical (silver), it just means more premium over spot!" If I had been there, you would have gotten a big  ! |
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Valued Member
United States
372 Posts |
I have never bought "paper" silver because I think it's pointless. I want to hold my investments in my hand. However, I have been wondering, if you buy the "paper", can you exchange it for real silver at some point?
Mike
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Moderator
United States
189215 Posts |
Supposedly you can, however, if you did so today I am sure you would get the runaround.
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Pillar of the Community
United States
2734 Posts |
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However, I have been wondering, if you buy the "paper", can you exchange it for real silver at some point? Of course! Simply buy a Perth Mint Gold/Silver Bar/Coin Certificate. Then you'll have actual allocated physical gold/silver bars/coins stored at the Perth Mint to back up your Certificate!  https://online.kitco.com/pmcp/Oh wait, were you talking about claiming the 1000-oz. bars from the COMEX 'paper futures' at the end of the contract?! Well, now, things might get very interesting in the next few months when more contract holders will try to do just that!  |
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Pillar of the Community
United States
1450 Posts |
I can't speak to silver "paper",but I was looking at info on gold"paper" accounts and the only folks who can claim physical gold is those holding shares equivalent to 50,000 ounces. Everything else is redeemable in cash only. I assume that silver"paper" setups are similar in concept with different numbers of course. In other words, if you ain't one of the"big boys", don't plan on ever seeing an ounce of physical silver from your investment!
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Pillar of the Community
United States
2734 Posts |
Actually, I thought that in the COMEX contracts (specifically) that you could 'claim' physical silver (ie: get a 'warrant' to pick it up from their warehouse) with as 'few' as 5000 troy ounces (in the form of 5 1000 oz. raw industrial bars), which is still a large amount (but trivial, when compared to 50,000 Troy Oz. of Gold!).
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Pillar of the Community
United States
1450 Posts |
DNA,that is probably correct on the Comex. The info I was looking at was a gold "ETF" which is the primary method of small investment in gold "paper". I am fairly sure gold is quite different on the COMEX also.
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Valued Member
 United States
306 Posts |
Just another comment to add as my son is an underground Geologist for a silver mine in the Pacific northwest. His company stock is getting hammered right now because silver demand to sooooo low. I think his is the only mine still in production as several others have closed down in the area. Feels something is quite right.  |
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Pillar of the Community
United States
2734 Posts |
It's the mining industry that's getting hurt the most by the low 'spot' price on (paper/industrial) silver, because they aren't profiting from the current (increasing!) premiums over spot price for 'small-scale' (100 oz. and under) physical silver.
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Pillar of the Community
United States
3294 Posts |
then shouldnt they make 10 or 100 oz bars which do have a premium?
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Pillar of the Community
United States
2734 Posts |
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nod2003: "Then shouldn't they make 10 or 100 oz bars which do have a premium?" The mines aren't in the 'assay' business. The "1000 troy oz." bars of silver produced at the mines are raw industrial products. Their weight may vary ± 80 troy ounces. The appeal of 1-to-100 oz. bars (besides being easier to store and transport, and salable in smaller increments) is that they're already 'assayed' when they're produced by 'known' refiners such as Engelhard, Johnson-Matthey, etc. In other words, you can sell these bars virtually anywhere without having to have them verified by an assayer.  The 'same deal' for the bullion coins: The issuing Mint guarantees the purity of the coins, so they are also 'assayed by a known refiner' (guaranteed by the issuing country's government). I was going to say that it most likely wouldn't be cost-effective for a mine to make 10/100 oz. 'assayed' bars on-site, but with today's premiums on small-scale physical silver, it might be workable. |
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Pillar of the Community
United States
1121 Posts |
Check out my listings in the CCF selling forum: https://goccf.com/t/37786I have more that I am going to put up for sale or auction if anyone is interested...let me know. |
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Pillar of the Community
United States
1882 Posts |
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n small quantities, gold is trading at +10% and silver at +40%. As mentioned, only paper is trading at spot and only large quantities (1,000 oz.+) is trading NEAR spot. I don't mean to ruffle any feathers, particularly if there are any goldbugs here, but this statement is not true for physical gold on the wholesale market. Even in small quantities. $20 ($25 for assayed), or less, over spot is closer to par for the course. And kitco finally has retail bullion product available again. Even there (a retail outlet) the premium is not very high on gold bars. Edited by steve199
11/16/2008 8:42 pm
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Bedrock of the Community
United States
10982 Posts |
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Even there (a retail outlet) the premium is not very high on gold bars.
Thanks for the update steve199. I hadn't seen the bars on Kitco and that is a good price. All the stuff I've looked at lately was over $800/oz even when spot fell under $730. That said, I'm still waiting for $600 gold and I think we might see that this winter. |
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Posted 10/31/2008 11:56 pm
