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Why Are Premiums For Physical Silver 25% Above 'Paper' Spot Prices?
Silver Eagles are in the 25+% range, and bags of 90% silver coins are a little over 24%.
Do you think Greenspan’s quote explains it?
“Nor can private counterparties restrict supplies of gold, another commodity whose derivatives are often traded over-the-counter, where central banks stand ready to lease gold in increasing quantities should the price rise.”
Alan Greenspan, Testimony Before the Committee on Banking and Financial Services, U.S. House of Representatives July 24, 1998
Charts: Jesse's Cafe Americain and GoldChartsrUs.com.
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Advertised price for one ounce silver US eagle is buy at $15.31, sell at $18.86+, a neat 23% buy-sell spread with spot at $14.77. Junk silver dollars are around $20, for 3/4 ounce of silver; NICE silver dollars are going for $24- $26 each.
Obviously, now is not the time to be buying silver with these premiums nor selling; with the world circling a hand-basket headed for hell. If you want bargains in silver, look to the mining shares and royalty companies. If you want or need to stack metal, you are too late for this part of the cycle.
I'd buy freeze-dried food, heirloom seeds, serious first aid kits with antibiotics and other prepper goods before I pay a 20% premium for speculation in metals. Make your family wealthy first, instead of the coin dealers. They all have lots of money already!
The market for closed end funds show that all markets range from premium to discount for any asset or product. Don't be a fool and buy at a high premium and then wait years and years for any appreciation. Look at the NASDAQ which just spent 15 years before breaking even with the year 2000 record high price.
Why would anyone want to overpay for a commodity like silver, unless the Pope's visit constitutes a "Har Megiddo" final battle emergency? It does make sense to buy when the mines are closing and going into default, etc. etc, but not at a ridiculous premium. That's a fool errand. Wait 'til next year and buy in April or May. No one gets ahead by being the greater fool.
I've been in coins, mines and metals and booms and busts for many decades and if this time is truly different, you want gold, not overpriced silver or glut-priced copper. The next currencies will be more electronic and gold-backed rather than round disks of white metal which no central bank or global superpower now endorses, except to support local mining and minting operations. Be your own global central bank.
As low as $6.49 per oz over spot!
I'd say that is a bit more than 25% as a premium for junk silver in rolls.
http://www.apmex.com/category/25800/90-40-35-coins-silver-dollars/all
How are the margins on the other side - do dealers pay higher margin if you sell them your coins?
... oh someone just asked that, great minds (and slow fingers ...)
They are paying $2.50 an ounce more for the item I pulled that info from posted just above here.
Ive never seen physical demand like it before. We are moving record amounts of product and everyone is taking delivery these past 2 months. If 25% over spot is considered expensive now... wait 12 months.
www.teamramgold.com/about-us
It's called teamramgold because when you buy from them it's like getting rammed in the ass. Shop around folks...unless you enjoy paying too much for your PMs.
Because they sparkle. I like how it sparkes. Its like glitter. Who doesn't love glitter.
I'm completely fine with paying the premiums on silver. The mint takes their cut, the bullion dealer theirs and I will get mine when/if i ever sell mine.
In the unfortunate event that you have to sell some silver, I hope you do your best to find a private buyer since selling to the dealer puts it right back into their system. Dealers act gutshot if you try to get a little premium out of them.
Private buyers will cheerfully pay a fair price, hold the silver out of the system, and do us no harm at all. The lack of a paper trail makes it worthwhile for them. A new stacker is born.
Look on Ebay, take an average of what your round is going for, knock off a buck, there's your price.
Buy wherever, sell on the down low.
I have NOT encountered that problem in recent times. I get a premium for flats without any trouble and am just a regular guy. If you must sell, don't sell to a damn pawn shop either.
Thanks for the advice fellas, no plans to sell my PMs at all. The only scenario I can envision ditching any of it would be a silver round to a farmer for two chickens. My outlook is not particularly rosy.
Are we there yet?
Its the old sales joke.
Guy walking down the street sees this guy selling apples. 5 for a quarter.
He says, "Hey that's a good price I'll take 5 apples."
Vendor says, "Well I am sorry, but I am all sold out."
Guy shruges his shoulders, walks another block and sees another guy selling apples.
Sign says Apples 5 for a buck.
Say to this vendor "Hey up the street there guy is selling apples 5 for a quarter"
Vendor says. "Well why didn't you buy them there?"
Guy says, "Well he was all sold out."
Vendor then says, "Yeah when I am all sold out I sell them 5 for a nickel."
IMO, silver is the PM of choice because of its industrial importance. The more the Federales do to inhibit the supply, the more manufacturers will have to pay for it. I can wait for as long as it takes.
Junk bonds .... bad .... junk silver .... good .... don´t touch my junk !
ZH zingers such as the one you just posted have compelled me to cover my laptop with a plastic sheet when reading.
Coffee spray y'know...
It would nice to see Greenspan stand trial before he dies comfortably of old age. In a real court it would be an easy job for a prosecutor since he has convicted himself with his own statements.
It's a neat feeling to have a shoe box or two full of various silver coins and bars but the small number of people building a coin collection don't effect the price of silver.
Question I have is: what does industrial demand look like now and in the future? That would seem to dictate price more than some old white guys buying 20 silver coins each month.
India alone is on course to gobble up 9000 metric tons of silver this year. Not to speak of the projected ~1000 mt of (officially imported) yellow metal.
"...Some old white guys..." Kindly go fuck yourself, idiot, know nothing punk.
-old white guy-
So you're an old white guy who has never been to a coin show or stepped foot into an LCS. Don't kill the messenger pal.
There is nothing that silver does that copper cannot do. Perhaps not as efficiently, but there is a price where everyuse of silver will be replaced by copper or some other metal.
Copper is an excellent disinfectant, like silver.
Silver is used to collect electricity from solar cells, because it's the best conductor, silver wires are smallest and block the least sunlight However, at a price they will switch.
Silver solder used in cell phones can be made out of other metals (not copper in this case).
SO if SIlver jumps to $100/oz the industrial uses will be switched over.
Be careful.
Interesting point. I used to tear down broken cell phones for the scrap gold. Recently, I had to replace the lcd in a Samsung S3 and where I used to see gold plate, now copper.
Thanks. I have come to the conclusion that industrial demand for silver is entirely what dictates the price of silver. Few thousand coin enthusiasts spending $350 on silver coins every month won't sway price.
Hey dipshit....ever hear of a country called India? They imported 1,400 tonnes of silver last month.
Why you say dipshit? Does industrial demand for silver NOT dictate price? I don't like to insult people online but frankly you sound like a dishit by making that post.
How much of 1,400 tons is for industrial? I made a quick look at annual production which indicates that every year about 33,000 tons of new silver are made available via mining and scrap. Perhaps your boyfriend in India has convinced you otherwise.
ZH, you are dead wrong. Physical gold and silver are crisis hedges.... stock market crises. For those unable or unwilling to hedge using derivatives or shorting, physical metal is the obvious choice. It is also a directly correlated hedge against a sinking dollar, which will eventually come.
So then why is is ZH wrong? You have not been here long I see. Per your profile, I just returned from your front yard and you never saw me.
Not only is ZH wrong, they are 'dead wrong'. However, he doesn't seem to say why.
I know. ZH is always wrong and so am I. I don't recall ZH ever telling anyone that they needed to buy or sell something. I was not sure if he was being a smartass or not.
Derivatives will again fail as they did in the '08 crisis as it took plenty of freshly-printed fiat to make these bank$ters whole again. Furthermore, nothing noteable was done to change the warped system which brought on the stupidity in the first place. The results will be horrific for most. For these reasons, I choose precious metals which are delivered in physical form to me and I can put in my own safe.
At least you realize the value of phyzz, and how it usually acts inversely in regard to the Dollar, but it doesn't make ZH at all wrong. I consider this forum a bunch of different messengers with their viewpoints and try to render my own conclusions the best I can.
The title and thrust of this article i.e. Why Are Premiums For Physical Silver 25% Above 'Paper' Spot Prices? are totally inaccurate. What is being really discussed, is the numismatic premium over the silver content of COINS not of silver per se.
I own Physical silver in registered form held in a vault and Engelhard 1 Oz .999 fine silver in bar form. Depending on quantity, the international market for silver can be both marginally below and sometimes marginally above quoted spot price e.g. JM Bullion quotes 14.84 USD today.
The fact that coin dealers are ripping you off with 25% premiums sounds like a personal problem. How many people would know if a coin was a fake or not? Or what a fair numismatic premium should be?For bars or coins only a reputable dealer will give you fair value. Yet in the case of coins, it is availability and ye olde 'supply and demand', that are causing this distortion.
In silver bars there is no such distortion - so this article is misleading.
If you want to hedge against the depreciation of fiat paper, a bullion dealer in physical told me from Toronto, the best value is 100 gram bars, e.g. Engelhard, Johnson Matthey, RCM, authenticated and stamped accordingly. There is no shortage of these bars and there is no premium to spot worth mentioning. Dealers will often give volume discounts. His quote above spot was 12 CENTS per silver ounce for 10, 20, 50, and 100 gram bars. That is hardly a 25% premium!
thank you.
Coin dealers are paying me a premium to purchase 10 oz. flats. Now why would they do that if there is no tight supply?
And who is this bullion dealer you speak of?
Bah! "numismatic premium" - more like opportunistic capitalism and pricing based on a potentially volatile cost of replacement. Which is likely what I'd do if I were a dealer. But I am not. As to "numismatic" - most people can't even pronounce it much less know what it is. I can and do and don't give a shit. It's subjective value.
As to the best value, I tend to agreed that proper stamped bars are that.
There are no simple answers really to investing in precious metals. I purchase across the entire spectrum of products.
Registered bars held in a vault means that you do not own it - the guys that own the vault do. You 'own' an IOU from them.
Allocated or unallocated? There indeed is a difference.
Yet I'm totally in agreement that anyone getting phyzz should never hesitate in getting personal possession of it, then securing it outside "the system" accordingly.
Current year silver eagles and bags of 'junk' silver (pre-1965 silver-based circulated coinage) have essentially zero numismatic value because they are in no way rare.
You don't know what you're talking about.
Now...if you were talking about a buffalo head penny, or any coin that wasn't/isn't mass-produced to the sky...then numismatics (coin-collector value) come into it.
Indian Head Penny or Buffalo Nickel.
Why are you people messing around with silver? Go to the bank, "they give you cash which is just as good as money".
wrong color
Dat's rayciss.
All colours are equal, but some are more equal...
Nowdays, the banks are getting more nosy as to why you need the cash! The War on Ca$h is just getting warmed up - a trial balloon most people will dismiss as another "terrorist" excuse from TPTB. It simply escalates the degree of unlawful government tracking of everybody. After all, we are terrorist muppets slaving to keep the Elitists doing God's work on Wall St.
Mabye it's a rip-off and one can get silver cheaper. What I do know is that this is a lot of silver flying out the store that will not come back unless there will be MUCH higher prices.
there is an industrial metal market, e.g. 100 oz bars available at paper/spot.
and then there is a monetary metal market, e.g. eagles and junk with large premiums.
It's funny I'm not hearing this from the SOA. (the very organization for major silver industrial users) Any more info? Unless someone can show me where hedging contracts are obtaining said metal, it doesn't pass my smell test.
i dont have any special info. i'm just pointing out that bulk silver can still be obtained (for now) at close to spot, whereas coins have a large premium because gold bugs are buying them. it's an arbitrage opportunity because gold bugs like to buy government approved coins, and the gov't sucks at taking advantage of the profit opportunity.
Silver supply will soon be hit because many mining companies are losing money at present prices.
No, that's not going to happen. You don't understand where silver comes from. The majority of silver production (80%) is a byproduct/coproduct of mining copper, tin, zinc and lead. The cash cost of extracting silver from copper, etc, is only a couple dollars an oz.
You can count the number of (significant) primary silver mines in the world on one hand. Those are the mines which will be in trouble with low silver prices.
Liberty Coin is 36% premium
Because phyz sells, even with a 25% premium. When silver hits $180 premiums will go back to, let's say, 10%. Paper will have a discount that's getting higher though. Real price discovery, the prolog.
Where can I sell my coins with 25% premium over spot?
Why are you even asking this question at this point? Trying to day-trade metal for more useless fiat?? When the SHTF, you will have no problem finding buyers as gold will likely have been entirely vacuumed and silver appears on more and more people's radars. You're clearly not thinking big or using the correct reasoning in the first place for putting faith in any PM's. It's more about the insurance it offers. Hang on to what you have and sleep a little better at night. Furthermore, don't be at all surprised if the paper price gets hammered a bit more in the short to mid-term! That nonsense comes to a nasty and sudden stop as this can't continue without more severe consequences of tightening the coil further. You will be pleased you exercised patience - something woefully missing from the mindset of most, particularly the Millennials with nary a clue. At least I give you credit for having gotten phyzz, and hopefully you have it in your personal possession in your own safe as I do!
I used to ride in rodeos decades ago on bucking broncs. If you put on the hat and choose to ride the Silver Bull, you should prepare for a longer-than-usual ride as you can get bucked off if you make the wrong move (decision). Your emotions will likely be very tense, but learn to ignore your feelings just as the long-term manipulators have long ago!! Watch for any parabolas if you are after the fiat. I've done well to follow that advice long ago and I certainly wish you the best.
When SHTF, it will become a BUYERS market for gold and silver, not a sellers market the way you believe. Why? Because PMs are useless to everyday needs, so they will be priced accordingly, meaning the value of PMs will be very low.
Want my two sacks of potatoes? Sure I'll take your one oz gold coin for them, and even throw in a couple chickens. Don't like the price? You are free to shop elsewhere.
I'll give you two bags of shit and a promise to deliver more when you want it, Just sign zee paper old man.
LMFAO ROTFL
... And vie can du not sign ze papers?!
... Beause you have broken both of my hands.
Then tell the Class why even bother with a Fort Knox or these useless mouth-breathers overseas in Shanghai or merry 'ol London? Such bloody barbarous relics which apparently can't keep any value, you reckon? Bill Holter says its not about the closure, but the reset which one realizes how screwed they truly are. If the value of PM's will be very low as you say, I say it's likely more manipulation being exerted, not one of liquidity or even a lack of demand. For that matter, having cash fiat on hand will be good for buying more of it if so inclined! Nevertheless, I see no reason to worry at all as these metals will very likely be part of the Great Reset. WHAT they will be priced in shall be another bedtime story as I suspect a replacement for the USD. At least we might agree it'll be interesting to experience.
Of course I've prepared with several boxes of surviveables and give you much credit for thinking this way. I often teach "Remember Katrina" which says enough. Toilet Paper, even tobacco will be high demand with many non-perishables.
The only reason that PMs retained value in recent localized collapses, such as Argentina, Zimbabwe, is that there was a robust market in the rest of the world.
If the US/Euro/Chinese currency or market collapses, then that will affect the entire world. The demand for PMs will vanish. Take a look what happened to the prices of gold and silver in Oct 2008. In fact, they dropped tremendously. Why didn't they soar?
Today, PMs are a purchace made in good times with surplus cash, and as such, they go for a premium, considering they are nearly uselsess for anything. Only 12% of gold and 50% of annual silver production is used industrially, the rest is just stored.
........25% good luck, that's history, fractional bullion is way over 100% over spot, now
http://stores.ebay.com/ShopBullionBank/_i.html?_dmd=2&_sid=132491739&_sop=1
No one said it yet?
Gohld bitChet.z !!
Water, water all around and not a drop to drink...
The reason is because the commodity exchanges are not doing their jobs. They were created to prevent problems like this from happening but, due to corruption, they refuse to police/prosecute the perpetrators of the paper commodity fraud we are all forced to endure.
Whose blessing does the CFTC receive their continued "vacation" from? Of course it's directly back to the Government! It's about protecting this battered and fried entity called the Dollar, the Buck, the Greenback - and it ain't workin' no more!
GATA, Ted Butler, et al, shall be vindicated. I expect heads will roll in due course, then the TRUTH will emerge even for the Meh-Heads to criticize, yet it's very much up in the air if anybody goes to prison. Not until we see bank$ters going behind bars will we likely get long-deserved justice.
I believe you won't see things change until tanks roll in the streets of Washington. Either by a foreign army or by a rogue general
Funny that so many commenters can't understand an auction, or the discount that gets applied to an auctioned item of unknown provenance.
Because supply of retail silver bullion is less than the demand. This means very little with regards to the far larger supply and demand curves of the non-retail market. Retail bullion silver and gold markets are very thin and subject to wide swings away from the far larger general market. The continued stupidity of this mantra is getting tiresome.