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"See Spot Run"
JohnMaben
Posts: 957 ✭✭✭
Thought some might enjoy our latest blog post:
John Maben
Pegasus Coin and Jewelry (Brick and Mortar)
ANA LM, PNG, APMD, FUN, Etc
800-381-2646
1
JohnMaben
Posts: 957 ✭✭✭
JohnMaben
Posts: 957 ✭✭✭
Comments
Nice... love those gold bars!
"The "spot price" in the precious metals marketplace represents the price at which a raw ounce of the metals can be bought and sold for immediate delivery."
Gotta disagree unless you can tell me where I can buy, for immediate delivery, one ounce of physical gold at the current spot price.
In reality the current spot price is determined by quoting the forward month's futures contract price with the most volume. It is the price of promises. It is the spot price of the associated futures contract, not the physical metal. It is a fictitious number based on the future price of non-physical metal under a contract that in most cases will never result in delivery of physical metal. It is fictitious because no seller will honor it for immediate delivery of physical metal. Its only use is to incorrectly provide a uniform basis that serves as the starting point for pricing the purchase or selling of a physical metal product; a price that would be much higher if not tied to the buying and selling of unlimited paper contracts. An unlimited supply of anything only limits its price. Many, including myself, would argue it restricts a realistic price for physical metals that should be based on actual, limited supply and actual buyer demand for that supply.
The recent run up in PM premiums indicates that both buyers and sellers in some way realize that spot price is BS. The challenge is how do we, myself included, break from the the blind faith narrative that "spot reflects PM prices." It's as strongly implanted into our brains as much as "the dollar is backed by the full faith of the United States."
The recent increase in PM premiums also indicates that we incorrectly use premiums to reflect changes in fundamentals such as increases in demand or decreases in supply of the precious metal itself. Fundamentals of an underlying precious metal should be reflected in the basis/base price. Premiums should be used to reflect the differences in various products and the fabrication costs for creating those differences (i.e. bulion coin vs proof coin), as well as differences in supply/demand of individual, specific products (i.e generic rounds vs. American eagles).
Give Me Liberty or Give Me Debt
You are correct it should have said represents the BASIS for which a raw ounce of the metals can be bought and sold for immediate delivery and I will edit that. Although, I have in fact seen instances where gold and silver CAN be bought at or below spot, but that is besides the point.
John Maben
Pegasus Coin and Jewelry (Brick and Mortar)
ANA LM, PNG, APMD, FUN, Etc
800-381-2646
My point is, WE ALL have been conditioned to assume futures spot price IS physical metal price. This was done by design. It allows a control over the price of physical metal being used as a financial asset that over rides the fundamentals that should be setting that price.
Futures markets were established to control the volatility in commodities prices to protect both producers and consumers (i.e. farmers/grocery store shoppers). We fail to realize when applied to financial assets it removes the influence of actual fundamentals, including supply and demand. PM Markets then become distorted as have stock markets since major central bank interference that began in 2009.
Give Me Liberty or Give Me Debt
John, yes we have all seen gold and silver sell below spot but you cannot point anyone to a commercial site that does so as a business practice.
bob
First sentence edited at the suggestion of derryb, thanks for that. FYI, this was put in front of a trader who works for a USM AP with 30 years of experience before publishing it. It got by him as well.
John Maben
Pegasus Coin and Jewelry (Brick and Mortar)
ANA LM, PNG, APMD, FUN, Etc
800-381-2646
it's a sore subject at the front of the mind
Premiums are dropping.....like a rock. Sorry to all those that bought into better hurry and get it now because it's going to da moon. The manipulators sucker new stackers with high premiums every few years, But wait Turd, Harvey, Schiff, ConspiracyHedge all said this time is going to be different. lol
The whole worlds off its rocker, buy Gold™.
for every stacker buying at high premium, there is a seller, most likely stacking profits.
I don't believe "this time" is yet over. This time should be over by the end of 2021.
Give Me Liberty or Give Me Debt
Interesting... Thanks for the article and subsequent commentary/correction. Cheers, RickO
Nice catch Derryb, You da man! Straightening out the pros...nice.
No, spot is my pet peeve. It's like a packet of pure kool aid powder.
Give Me Liberty or Give Me Debt
Where are Dick and Jane ? Chasing Spot, I presume.
Sorry to all those that bought into better hurry and get it now because it's going to da moon. The manipulators sucker new stackers with high premiums every few years
It's still not a bad time to stack a little more metal. You can quote me.
I knew it would happen.
Agree, but only if there is, in the future, a viable venue where to unload your stack & make a decent profit.
What about a viable venue to unload one's stack of Dow, Naz, or S&P stocks? You couldn't do that back in October 1987 unless you had an "in." The little guy's orders were ignored for weeks or months. The brokers wouldn't touch them. A similar type thing just happened with oil futures and stocks on the recent crash to -$37. There's never a guaranteed "viable" market to buy any "financial" or "speculative" asset. It's buyer beware when push comes to shove.
Are you putting PMs in the same basket as stocks and oil?
Knowledge is the enemy of fear
I begged customers NOT to but post virus because of inflated premiums. They have now come down to a level where I am no longer issuing this warning but they will eventually come down further,
John Maben
Pegasus Coin and Jewelry (Brick and Mortar)
ANA LM, PNG, APMD, FUN, Etc
800-381-2646
BTW, the premiums most dealers are still asking does not reflect the true adjusted price. In other words, most are not lowering premiums fast enough.
John Maben
Pegasus Coin and Jewelry (Brick and Mortar)
ANA LM, PNG, APMD, FUN, Etc
800-381-2646
Most suppliers ain't dropping their premiums.
Off topic but if you're looking to add some Marsh 5 Oz Silver ATB's to your stack, check out the deal I posted on the BST, thanks.
John Maben
Pegasus Coin and Jewelry (Brick and Mortar)
ANA LM, PNG, APMD, FUN, Etc
800-381-2646
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