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 Replies: 27 / Views: 3,706 |
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Valued Member
United States
197 Posts |
I don't worry much about spot prices these days because the physical and digital markets for gold and silver are becoming decoupled. I've heard from several dealers that they're having difficulty getting their hands on physical gold and silver and that they're charging increasing premiums and that which they are able to obtain. And I'm seeing evidence of this on my own, in an admittedly small way: Three weeks ago I bought a roll of silver Washington quarters from APMEX for $227. The day after the April 15 collapse of the digital price, that same roll was selling for $230. I just now checked again, and today it's selling for $236. |
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Pillar of the Community
Canada
746 Posts |
I imagine that many of the low-end coins were melted as well as the VF, EF, and even as high as AU/MS60 coins (common dates) reached the melting pot, when silver reached $40+ But for silver value to outshine numismatic value for the higher end coins, it would have to reach much higher levels before MS62 or higher grades would make it to the can. Rare dates & varieties would still be hoarded IMO. On the other hand, if silver were to reach, say $75++ levels, would a collector be tempted to cash in higher end, rare dates, or variety coins? At what point does temptation set in? Let's say you own a coin trending at $60 and the silver value would be $40. That would be more than 60% of trend. Would you hold it or trade it in?  What if the silver value would equal the trend value? Even if you really like the coin, you might be tempted to cash it in. And if silver would exceed trend value, you would begin to question your sanity if you decide to keep the coin. What is the breaking point?  Anyway, given the downtrend we are in, we won't have to make that decision anytime soon...  |
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Pillar of the Community
Canada
1502 Posts |
As investment opportunities long or short, it seems more and more to me that straight up bullion isn't the way to go. Strong bulls and bears and a relatively small physical market coupled to a fast-paced paper one means for wild ups and downs. It's not like I have 100s of thousands to trade on a weekly basis either, so it makes no sense for me to get all visceral with every peak and drop, and all offended when the EXtremely vocal few can't help themselves from pushing their point on forum be it educated or verbal diarrhoea. Commemorative pieces and rarer semi numismatic pure PM coins is the way to go I think. Price basing loosely on spot means I can find deals at close to spot. If PM prices dip I can likely still find buyers that are more collectors than investors to put in the premium. If prices crash, I will still enjoy the piece in a display case, as oppose to say having just another ASE amongst 100s more. Examples: Bought a 2oz Engelhard gold bar close to spot during the run up ~ 2 years ago. Sold it ~2 months ago to cover unexpected expenses. Guess if we lost money even when spot was down ~ 25% between time of purchase and sale. We also have a pretty extensive 1oz silver coin collection from around the world that given today's prices, we paid too much for. But really, whatever man, it's pretty and both my wife and I love it. Wouldn't be able to say this if this collection was one of tubes of plain silver maples though. |
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Valued Member
United States
410 Posts |
My take on the correct price of silver is this. Take a look at Kitco's 2000 to present chart. The period from 2000 to July 2008 is the normal price of silver for industrial use. You can see from July 2008 to Jan 2009 the price drops due to the global recession and then start to recover as the global economy recovers. That period is all normal pricing based on supply and demand. Then you hit the fall of 2010 and silver goes nuts with a huge spike. That was when the Federal Reserve did QE 1 and the boys on talk radio and TV started talking about the US economy collapsing due to massive inflation. That spike from Fall 2010 to May 2011 is what I would call the fear premium. Since May of 2011 the world has not collapsed, the global economy has slowly improved and life has went on. The fear premium has just about disappeared and we are getting back to silver being priced as an industrial commodity. If you put a trendline from 2000 to 2010 and project it out to the present you get today's price being about $20-$25 per ounce. With the recent drop we are back to were we should be and from now on I expect slow growth based on increased industrial use and inflation, basically 2-4% per year.
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Pillar of the Community
United States
4333 Posts |
Quote:
I imagine that many of the low-end coins were melted as well as the VF, EF, and even as high as AU/MS60 coins (common dates) reached the melting pot, when silver reached $40+ Why would any silver coins be melted, when thousands of investors are willing to pay over spot price for silver? When I listen to LED ZEPPELIN...so do my neighbors...
Roll hunting since '77
Dirt fishing since '72
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Valued Member
United States
410 Posts |
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Why would any silver coins be melted, when thousands of investors are willing to pay over spot price for silver? Silver coins get melted because for every one numismatic investor that cares about grade there are dozens of buyers that buy silver strictly as silver. Buying coins based on numismatic value takes extensive knowledge while buying it based on spot only takes a scale. Edited by JSH
04/29/2013 9:03 pm
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Pillar of the Community
United States
3843 Posts |
I found some of the graphs in the following article very interesting. This massive draw down in physical gold/silver inventories in the bullion banks could be a sign that the decline is about over. COMEX PHYSICAL GOLD PLUMMETS - GOLD DISAPPEARING FROM DEPOSITORIES EVERYWHERE http://www.libertygoldandsilver.com...rBlog/?p=197 |
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Bedrock of the Community
13014 Posts |
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Why would any silver coins be melted, when thousands of investors are willing to pay over spot price for silver? For some thats true but not for the low grades. Even collectors expect circulated common date to go for spot. No ones paying 10 dollars for a 1964 vg10 quarter when you can melt it for over 5 bucks |
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Pillar of the Community
United States
4333 Posts |
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For some thats true but not for the low grades. Even collectors expect circulated common date to go for spot. No ones paying 10 dollars for a 1964 vg10 quarter when you can melt it for over 5 bucks I understand...but, if that quarter sells for even 6 bucks to an investor, that means it avoided the smelter. That's why I don't think alot of coin is being melted, it's just trading hands. When I listen to LED ZEPPELIN...so do my neighbors...
Roll hunting since '77
Dirt fishing since '72
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Pillar of the Community
United States
4333 Posts |
Quote:
Silver coins get melted because for every one numismatic investor that cares about grade there are dozens of buyers that buy silver strictly as silver. Buying coins based on numismatic value takes extensive knowledge while buying it based on spot only takes a scale. If that's the case, and I can rarely buy 90% silver at spot because there's too much profit to be made by selling over spot, how are coins making it to the smelter? When I listen to LED ZEPPELIN...so do my neighbors...
Roll hunting since '77
Dirt fishing since '72
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Pillar of the Community
United States
899 Posts |
fist - go down the street to the local "we buy Gold and Silver" shop and check them out. These places aren't buying just jewelry to resell, they buy the stuff to send off to get smelted. While I imagine many know the numistic value of some of the items brought in, many others treat the coins as nothing more than silver. I know some members of this forum have gotten lucky and purchased some of the rarer coins and commemoratives at spot price from these places. So that tells me, there are a lot of coins not getting saved.
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Pillar of the Community
United States
4333 Posts |
Thanks Doug I've tried that, left them my card, saying I'd pay over spot. Have never heard back from them.
When I listen to LED ZEPPELIN...so do my neighbors...
Roll hunting since '77
Dirt fishing since '72
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Replies: 27 / Views: 3,706 |
First Page
Posted 04/28/2013 11:14 am
