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Why Are Premiums Over Spot Getting So High!?

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Pillar of the Community
United States
4685 Posts
 Posted 04/04/2020  09:18 am Show Profile   Bookmark this topic Add TheForce to your friends list Get a Link to this Message
What is going on with silver!? I was considering buying some SML but holy crap, what is going on with the premiums!? It's spotting under $15/oz but the premiums seem to be $8-$9 above spot on all bullion coins. Used to be $4-$5 over spot premium. Why do I wanna pay $25 for something that have a spot of $14.80? How would you come out ahead?

Also I noticed JM Bullion is out of stock on tons of silver.
Pillar of the Community
United States
1022 Posts
 Posted 04/04/2020  09:29 am  Show Profile   Bookmark this reply Add CitationSquirrel to your friends list Get a Link to this Reply
Essentially, there are now two prices for silver. The spot price has become the price for "paper" silver (ETFs and the like). Then there is a second price for physical silver, which is much higher and better reflects the actual supply and demand of physical bullion.

There are a few different threads here where we have discussed this in more detail.
Pillar of the Community
Canada
3304 Posts
 Posted 04/04/2020  10:09 am  Show Profile   Check Pacificoin's eBay Listings Bookmark this reply Add Pacificoin to your friends list Get a Link to this Reply
Quite simple , no one has any to sell right now !
If you want cheap silver you need to buy a silver contract
or play the silver options market , not for the faint of heart .
Pillar of the Community
United States
4685 Posts
 Posted 04/04/2020  10:14 am  Show Profile   Bookmark this reply Add TheForce to your friends list Get a Link to this Reply
I'm probably gonna be out of the silver game. With the economy the way it is I can see why there is a demand and people will pay it.
Pillar of the Community
United States
2078 Posts
 Posted 04/04/2020  2:11 pm  Show Profile   Bookmark this reply Add thq to your friends list Get a Link to this Reply
Sometimes things are less expensive if you think outside of coins and rounds. I picked up 4 oz of sterling flatware yesterday for $17 an ounce, and $7 an ounce after using eBay bucks. I see these deals from time to time, though most sellers are careful about underpricing. Make sure you buy solid pieces.

It's a pattern I like, and I'll use them on the table. It's claimed that sterling has health benefits, though this is probably an urban legend. Another thing you can't do with rounds.
"Two minutes ago I would have sold my chances for a tired dime." Fred Astaire
Edited by thq
04/04/2020 2:15 pm
Valued Member
Learn More...
United States
88 Posts
 Posted 04/04/2020  10:16 pm  Show Profile   Bookmark this reply Add kaddyshack to your friends list Get a Link to this Reply
Here is an interesting article about recent Silver prices.

https://realmoney.thestreet.com/inv...ets-15268913
Pillar of the Community
United States
3935 Posts
 Posted 04/05/2020  01:00 am  Show Profile   Bookmark this reply Add fistfulladirt to your friends list Get a Link to this Reply
This disconnect of paper price vs physical is nothing new, it's happened in the past.
When I listen to LED ZEPPELIN...so do my neighbors...
Roll hunting since '77
Dirt fishing since '72
Bedrock of the Community
Australia
16984 Posts
 Posted 04/05/2020  04:18 am  Show Profile   Bookmark this reply Add sel_69l to your friends list Get a Link to this Reply
Dealers have bought silver at a higher price before now.
If they sell at current spot price, they are going to loose money.
No one goes into business to deliberately make a loss.
So the dealers in order to survive, have to jack up their premium.

If you don't like the situation just now, don't buy just now. You may wish to consider buying silver futures instead. Your gamble. If you don't understand the futures market, stay out of it.
The dealers are well aware of all of this as well, so they have slow turnover. Better to have some money coming in the door, than have lots of money going out.
Pillar of the Community
United States
4685 Posts
 Posted 04/05/2020  08:37 am  Show Profile   Bookmark this reply Add TheForce to your friends list Get a Link to this Reply
It seems dealers would make more money selling by volume at lower premiums than selling at high premiums but selling fewer. Maybe that way of thinking doesn't apply to metals, I dunno...
Pillar of the Community
Canada
3434 Posts
 Posted 04/05/2020  09:36 am  Show Profile   Bookmark this reply Add oriole to your friends list Get a Link to this Reply
@thq, silver is very effective in killing micro-organisms.
Pillar of the Community
Canada
3434 Posts
 Posted 04/05/2020  09:44 am  Show Profile   Bookmark this reply Add oriole to your friends list Get a Link to this Reply
@TheForce, dealers don't have the volume available to sell.

Before the shut down, my LCS could not get any more silver (at the new lower spot price) from their suppliers.

When time were normal, their profit per ounce was about $1.0. They will be losing money by selling their small amount of old stock at a lower premium.
Pillar of the Community
United States
5853 Posts
 Posted 04/05/2020  5:54 pm  Show Profile   Bookmark this reply Add D0ubl3Eagle to your friends list Get a Link to this Reply
Demand for retail sized bullion has outstripped supply. Normally refineries would be able to producing retail sized bullion to meet demand but many of them are closed due to the coronavirus. Valcambi, Argor-Heraeus and PAMP have been closed for the last 2 weeks but are set to resume production at reduced rates.

https://www.reuters.com/article/hea...dUSL8N2BT09A
Pillar of the Community
Canada
3688 Posts
 Posted 04/10/2020  06:51 am  Show Profile   Check Libertad's eCrater Listings Bookmark this reply Add Libertad to your friends list Get a Link to this Reply
In my opinion (not worth much), I think that the current price is still getting accustomed to the new market. Not until we have some normalization will we see a stable "real" price. I can't understand why people want to buy silver when there are way bigger priorities to take care of right now. I wanted to buy metals back in early to mid-March and even then nobody had stock. Like everything else you can buy in this world, you had to stock up months before and not in the heat of a panic. There are tons of products on backorder and restrictions per family (e.g. limiting quantities for hot commodities). The places where I buy you have to put in your order and just wait for them to get a shipment so they can ship it to you. Another place just doesn't have any. Other places jack up the price because they don't know when they're getting their next shipment. Same with basically every general store right now. Has anyone bartered with metals here before?

You guys remember April 2013, I think it was? This was right after the all-time high. Price went from $48 to $36 and bounced around for months, then to about $27ish but rounds were being sold at $32-$34 because of sudden dips. Unless you're plugged into the electronic market these prices make no actual sense. You can't force a person to sell their metals to you just because you want them now.
Edited by Libertad
04/10/2020 06:54 am
New Member
United States
6 Posts
 Posted 04/11/2020  11:07 pm  Show Profile   Bookmark this reply Add Willkp23 to your friends list Get a Link to this Reply
I've been looking all over the internet and the cheapest I've seen silver is $21 an ounce.
Forum Dad
Learn More...
United States
20502 Posts
 Posted 04/12/2020  09:12 am  Show Profile   Bookmark this reply Add bobby131313 to your friends list Get a Link to this Reply
Here's under $20, almost $19 if you buy 20.

https://silvergoldbull.com/1-oz-sil...silver-round
Valued Member
Canada
62 Posts
 Posted 04/12/2020  8:09 pm  Show Profile   Bookmark this reply Add sbr to your friends list Get a Link to this Reply
RE: Silvegoldbull: I have been buying from them every week for the last month and even though they say there could be a 20 day delay they have been delivering within 5 days on their in stock items ,very very satisfied with them.
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