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 Replies: 20 / Views: 4,457 |
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Pillar of the Community
United States
2233 Posts |
My local coin store was selling 90% junk silver for $1.10 premium over spot. Since the first of the year he's been raising it to today's $6.40 over spot to make up for the drop in spot price so he wouldn't loose money. For Silver Eagles, he raised his premium from $4 to $7.40. He also raised his percentage premium on gold. So locally one can't take much advantage of low spot prices. Some ebay stores showed they are out of stock or are on vacation and not accepting orders when spot prices quickly went down. Edited by livingwater
03/17/2020 8:22 pm
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Pillar of the Community
 Canada
5394 Posts |
The paper price and physical price are like apples and oranges .
If you are trying to buy cheap physical silver bullion and coins because the price plummeted
Wish you luck .
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Pillar of the Community
 United States
8938 Posts |
Dealers are people too. Just because "spot" is low doesn't mean they have to or should sell it at that price. At work RN we're asking 13x face for 90% and $21 per oz for silver. Why? Because we need to at the very least break even. Dealers aren't obligated to take a loss on an item purely because you say they should, or paper price says so. No offense, but the way my boss worded it is "You're not more important then my livelyhood. I need to pay my bills before I get to you." If we have to sit on some silver on gold for 3 months or a year, we'd rather do that then take a loss. Heck, we just sold an item Julian (my boss) had bought 32 years ago. A few months doesn't matter.
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Pillar of the Community
United States
7036 Posts |
Last Tuesday at my LCS, ASE bullions were 2 dollars over spot. Today no sales on silver bullion (they are closed on Monday) |
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Pillar of the Community
Canada
5241 Posts |
I remember some threads years ago were somebody suggested that if the price of silver dropped enough they "would back up the truck". Well they can back the truck up but will not be able to fill it with silver. If silver stabilized at a low level for a long time, eventually the LCS prices would match the paper price. Were I a dealer, I would not be in a rush to sell at loss.
The decision not to sell low is based on a reasonable assumption that the prices of precious metals will recover.
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Valued Member
United States
392 Posts |
Dealers are happy to sell at a premium over spot when prices rise significantly above their costs?
I'll say yes and I'm okay with that.
You can always buy some SLV ETF now and sell it later if you think prices will rise. Use those profits to buy physical silver.
Edited by Lionel90
03/17/2020 6:28 pm
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Pillar of the Community
 United States
2233 Posts |
You gentlemen are correct, if I was a dealer I would not want to sell at a loss either. Businesses can set whatever prices they want. I heard PM dealers can buy insurance to cover fast spot price downturns but I don't know if that's true.
Edited by livingwater
03/17/2020 8:48 pm
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Pillar of the Community
United States
8938 Posts |
Quote:
I heard PM dealers can buy insurance to cover fast spot prices downturns but I don't know if that's true. Yes and no. Only if they trade futures/contracts. If they do physical metals then no. The assumption being that every sale is consensual between the buyer and dealer, and that the dealer was willingly taking a loss rather than refusing the sale. |
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Pillar of the Community
Canada
5394 Posts |
When I had my coin shop and dealt a fair bit in Silver Gold and platinum We bought options as insurance . Sometimes you made more on the options contract than you did on the Metals themselves. Also as to this being a bad market for PMs , not even close . I remember back in the late 90s early 2000s , you couldn't even get face for silver maples or 5 and 10 dollar Montreal Olympic silver coins until the RCM and Royal Bank partnered on a buy Program . If silver prices stay low , there will eventually be a corresponding correction in bullion , not now ! |
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Pillar of the Community
United States
4085 Posts |
Yes, no reason to sell at the bottom if you are a dealer with some money to carry you; at some point if silver prices don't go back up you will see the ask price come down as people are forced to liquidate silver holdings to raise cash.
Edited by KenKat
03/17/2020 7:44 pm
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Pillar of the Community
United States
4333 Posts |
I've seen this same thing a half dozen times over the last 40 years, it happens.
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 Kingdom
2133 Posts |
When the stock market falls, precious metals normally rise.
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Pillar of the Community
Canada
5394 Posts |
Not so in 2008 /09 a quick check of Goldsilver.com. Has a good article on why both fell in that crash .
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Pillar of the Community
United States
3843 Posts |
How long are dealers going to wait for a potential recovery in the silver price? I agree that holding may be the best bet in the short term but if silver remains under $13.00 for much longer than a few months they may go bust waiting and hoping for someone to come along to bail them out. I certainly won't be me bailing them out and if that means no silver for a while then so be it.
Edited by Joe2007
03/17/2020 11:36 pm
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Valued Member
United States
245 Posts |
I love my coins, but these spreads are exhibit A in why you MUST not buy coins from these jokers right now. If you pay absurd premiums, hell, good luck making a profit in the future!!
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Pillar of the Community
United States
2233 Posts |
So paper/physical is apples and oranges, or perhaps modern term electronic/physical. The former affects the latter, if not immediately, eventually for buying physical. Obviously I should avoid dealers with highest premiums no matter what spot prices are.
As for stocks, I moved some cash to stock mutual funds yesterday, great time to buy stocks IMO for long term investing. I may have missed buying at the bottom of the virus crisis. Congrats to anyone who succeeds in timing the markets.
Edited by livingwater
03/18/2020 06:07 am
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Replies: 20 / Views: 4,457 |
Posted 03/17/2020 4:39 pm
