Posted 08/25/2015 08:35 am
It's getting pretty bad locally too. From what I've seen, I've been receiving the impression that there is not an actual shortage either of physical silver, or the people willing to supply/ resupply dealers with it.
Rather, the dealers themselves are busy creating an artificial shortage through rapid premium increases because they know more people are coming out of the woodwork with an eye towards purchasing some "cheap" silver. Yet, all while the coin stores are attempting this tactic, every store I've visited is sitting on what appears to be a huge pile of non-moving junk silver.
Where I am, the sell prices are hovering around the 14-15x face range, which is a (roughly) 40-50% premium over the current 10.5x face spot price. At one store, since silver went up something like 30 cents that day, the dealer immediately raised his prices to 15.6x face (on what looked liked exactly the same pile of silver that was there the other day when I first visited). He mentioned something about gold and silver eventually skyrocketing--and that it was a good investment--but I tried to tell him that a 40% premium per ounce would effectively force a buyer to sit on the silver until it went up $6 or $7 an ounce.
You really have to wonder how much the dealers are paying to people walking in the door, and how much they're making with re-sale. 90% of the people who come in to sell silver coins on a daily basis are likely doing it because they couldn't care less about keeping them (such as in the case of inheritances), or because they really need the cash. So, their actions wouldn't really be affected by price swings. All they would want to do would be get rid of it.
APMEX especially has been far too reactionary these past two or three months. At a spot price of $16.20, I purchased a roll of silver quarters for $1.69 over spot. Now, with spot just $1.50 lower, the premium is $5.99 over spot, or 3 1/2 times what it used to be. This will probably rise again when they receive new 90% silver.
As I mentioned before, I find it very hard to believe that there are apparently no sellers of silver at the current price level, and that inventory is non-existent. Is the $15 threshold so important in potential sellers' minds that it means the difference between plentiful online inventory and no online inventory at all?
Edit: Of the few 90% products that are currently in-stock, APMEX's rolls of silver proof quarters are currently on "sale" for "only" $8.49 an ounce over spot. Is this a new record (a 60% dealer's premium over their buy price)? BU 1964 half-dollars are at 17x face ($8.99 over spot, with no buy price listed).
Rather, the dealers themselves are busy creating an artificial shortage through rapid premium increases because they know more people are coming out of the woodwork with an eye towards purchasing some "cheap" silver. Yet, all while the coin stores are attempting this tactic, every store I've visited is sitting on what appears to be a huge pile of non-moving junk silver.
Where I am, the sell prices are hovering around the 14-15x face range, which is a (roughly) 40-50% premium over the current 10.5x face spot price. At one store, since silver went up something like 30 cents that day, the dealer immediately raised his prices to 15.6x face (on what looked liked exactly the same pile of silver that was there the other day when I first visited). He mentioned something about gold and silver eventually skyrocketing--and that it was a good investment--but I tried to tell him that a 40% premium per ounce would effectively force a buyer to sit on the silver until it went up $6 or $7 an ounce.
You really have to wonder how much the dealers are paying to people walking in the door, and how much they're making with re-sale. 90% of the people who come in to sell silver coins on a daily basis are likely doing it because they couldn't care less about keeping them (such as in the case of inheritances), or because they really need the cash. So, their actions wouldn't really be affected by price swings. All they would want to do would be get rid of it.
APMEX especially has been far too reactionary these past two or three months. At a spot price of $16.20, I purchased a roll of silver quarters for $1.69 over spot. Now, with spot just $1.50 lower, the premium is $5.99 over spot, or 3 1/2 times what it used to be. This will probably rise again when they receive new 90% silver.
As I mentioned before, I find it very hard to believe that there are apparently no sellers of silver at the current price level, and that inventory is non-existent. Is the $15 threshold so important in potential sellers' minds that it means the difference between plentiful online inventory and no online inventory at all?
Edit: Of the few 90% products that are currently in-stock, APMEX's rolls of silver proof quarters are currently on "sale" for "only" $8.49 an ounce over spot. Is this a new record (a 60% dealer's premium over their buy price)? BU 1964 half-dollars are at 17x face ($8.99 over spot, with no buy price listed).
Edited by Earendil
08/25/2015 10:10 am
08/25/2015 10:10 am
