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 Replies: 12 / Views: 1,157 |
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Pillar of the Community
United States
4867 Posts |
I was watching CNBC this morning and silver spot prices today are under $10/oz. So I went to ebay looking for a bargain but sellers are still charging $18.99 and up for this years bullion coins! |
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Pillar of the Community
Canada
1931 Posts |
I don't think anyone is going to be willing to sell silver at spot prices right now. I think it is easier to hold onto until the values rise again, though some still sell because obviously silver will not be below $10 forever. people realize that, so some are willing to buy even if it is over spot.
I can say this: if I bought a hoard of silver at $18 per ounce there's no way I'd sell it for $10. That's just my opinion though, as I don't actually sell my silver off.
malissa
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Pillar of the Community
 United States
4867 Posts |
I can understand that but what is the point of the spot price if you cannot buy at or just above that price? Seems so sensless paying $25 for a bullion coin that only spots under $10...thats one heck of a markup.
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Pillar of the Community
United States
2797 Posts |
Supply and demand. Most holders of silver expect it to return to those prices in the near future, so they will not sell at current spot. There are still plenty of bidiots and online buyers who will pay $18. They will be accomodated. If the current spot price holds of goes down for say 6 months, you'll see silver offered closer to spot price as sellers try to unload their inventories. Patience will pay off!
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Pillar of the Community
United States
4867 Posts |
I just don't know. The last several months I have seen silver consistantly between $9 to $12. I just wish there were a way to buy w/o going thru somebody that purchased theirs at $20.
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Pillar of the Community
United States
1130 Posts |
You are comparing physical silver prices vs paper silver used for commodities trading. Since there is a shortage of physical silver (especially SAE), people will pay a premium to get them.
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Pillar of the Community
United States
1450 Posts |
That is a big part of the problem, there is no physical supply of silver coins out there yet the demand is high and the spot price low. Go figure. Every body is reluctant to sell because they can't replace it if they need to. Futures contracts that people don't ever plan to take delivery on because there is no supply is keeping prices down the way I understand it. It is like offering a gallon of gas for 50 cents but having no gas to sell. The price is irrelevant if there is no supply.
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Valued Member
United States
204 Posts |
The price of silver you buy is different from the spot in the same way the price of gasoline is different from crude oil. In the same way crude oil prices can suddenly drop yet gas prices stay high (temporarily) because there is only so much refining capacity, the same is true of bullion because production quantity of the coins is not tied directly to the price of the raw material.
Silver prices can drop because there are more 100oz bars coming on the market (which is what drives the spot), yet there is usually not a sudden increase in bullion coin production at the same time (which would drive their price down) for a variety of reasons. In particular I don't think any mint wants to over produce and build inventory with the price of inputs fluctuating so much.
In short the spot price, like coin price listings, is just an indication of supply/demand in the general market, not necessarily reflecting the supply/demand for any specific products in it.
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New Member
United States
29 Posts |
I was at a coin show this past weekend and you couldn't tell me there was a shortage of Silver Eagles. Seen thousands of them on display, seen many people buying and selling. Lots of Silver Bars. Overheard one dealer saying he has over 40000 Eagles in his inventory. Most people I seen buying was mostly because they were collecting Silver Eagles. Makes you wonder how much of a shortage there really is at this point.
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Pillar of the Community
United States
2540 Posts |
Regardless of the posted prices, if there is no inventory available, then the market will charge what it can.
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Pillar of the Community
United States
7123 Posts |
spot is actually based on 1000 ounce market increments .
if you want cheaper silver and can find it that will be where the price breaks .
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Pillar of the Community
United States
1359 Posts |
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Pillar of the Community
United States
2734 Posts |
The 'London Fix' (world 'spot' price) is based on paper silver futures. Physical Silver is a different market, never more so than right now!
Those futures are based on 1000 troy oz. industrial bars kept in depositories. Those bars vary in weight and require an assay service to sell, and they are not easy to transport due to their weight.
In contrast, 10 and 100 troy oz. bars made by assay companies are easy to transport personally, and can be sold without assay in the world market.
Physical silver (in 100 tr. oz. or less) that you can take delivery of has always had a premium over 'spot' price (except maybe when dealers were dumping slow-moving silver in the low-demand times). The smaller the increment of silver, the more the premium over spot.
The demand for physical silver in this time has pushed the premiums over 'spot' to unheard-of levels, particularly for 1 troy oz. legal tender silver bullion coins.
It is true that some people bought silver when spot was $20/oz. earlier this year and do not want to sell it in a 'down' period.
However, whether you bought your silver at $20 or $4, you won't want to sell it if you think 'spot' will be $20 or more next year!
The widespread belief that spot will rise to $20 or more in 2009 is what's causing shortages of silver at some dealers and high premiums at other dealers who do have silver.
There are TONS of American Silver Eagles out there, but if no one wants to sell them for less than $19, and people are buying them at that price, well that's 'free market forces' at work!
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Replies: 12 / Views: 1,157 |
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Posted 10/20/2008 08:41 am
