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Why is the Kitco Silver bid/ask showing a $1.00 spread?

jclovescoinsjclovescoins Posts: 1,931 ✭✭✭✭✭
in U.S. Coin Forum

Just curious and I'm sure someone on here can enlighten me...why is the Kitco Silver bid/ask now showing a $1.00 spread?
It has been 10 cents for the last 10 years that I've been following silver. I assume everyone is quoting the ask prices plus a premium - but interested for your thoughts?
https://www.kitco.com/charts/livesilver.html

Comments

  • 3stars3stars Posts: 2,294 ✭✭✭✭✭

    Buyers know its a price bubble?

    Previous transactions: Wondercoin, goldman86, dmarks, Type2
  • jmlanzafjmlanzaf Posts: 35,564 ✭✭✭✭✭

    There is a $1 bid/ask spread. It does sometimes widen during periods of volatility.

  • davewesendavewesen Posts: 6,580 ✭✭✭✭✭

    more volatility now, where it can move a couple dollars in a day

  • jclovescoinsjclovescoins Posts: 1,931 ✭✭✭✭✭

    I just don't recall seeing this before. Who is determining the $1 bid/ask spread rather than 10 cents?

  • CaptHenwayCaptHenway Posts: 32,558 ✭✭✭✭✭

    Reality?

    Numismatist. 50 year member ANA. Winner of four ANA Heath Literary Awards; three Wayte and Olga Raymond Literary Awards; Numismatist of the Year Award 2009, and Lifetime Achievement Award 2020. Winner numerous NLG Literary Awards.
  • Cougar1978Cougar1978 Posts: 8,640 ✭✭✭✭✭

    Who makes only 10c on a silver bullion transaction?

    Coins & Currency
  • jclovescoinsjclovescoins Posts: 1,931 ✭✭✭✭✭

    My point is simply this: who decides that the Kitco bid should now be so much different from the futures prices? (more than $1.00 below).

  • TheMayorTheMayor Posts: 231 ✭✭✭✭✭

    @jclovescoins said:
    My point is simply this: who decides that the Kitco bid should now be so much different from the futures prices? (more than $1.00 below).

    Kitco. More specifically, someone at Kitco (likely a trader or risk manager of sufficient seniority/authority) that recognized abnormally high volatility decided they needed more of spread to avoid getting caught with their pants down in the event of sharply falling prices.

  • zas107zas107 Posts: 831 ✭✭✭
    edited February 1, 2021 12:25PM

    The same people who ran up game stop stock have moved onto silver, physical silver is sold out everywhere basically

  • jmlanzafjmlanzaf Posts: 35,564 ✭✭✭✭✭
    edited February 1, 2021 12:48PM

    @TheMayor said:

    @jclovescoins said:
    My point is simply this: who decides that the Kitco bid should now be so much different from the futures prices? (more than $1.00 below).

    Kitco. More specifically, someone at Kitco (likely a trader or risk manager of sufficient seniority/authority) that recognized abnormally high volatility decided they needed more of spread to avoid getting caught with their pants down in the event of sharply falling prices.

    You are talking about 2 different things. The Kitco price he's referring to is NOT the price Kitco is paying.

  • jmlanzafjmlanzaf Posts: 35,564 ✭✭✭✭✭

    @jclovescoins said:
    My point is simply this: who decides that the Kitco bid should now be so much different from the futures prices? (more than $1.00 below).

    That is not the "Kitco bid", it is the Spot bid/ask

  • TheMayorTheMayor Posts: 231 ✭✭✭✭✭

    @jmlanzaf said:

    @jclovescoins said:
    My point is simply this: who decides that the Kitco bid should now be so much different from the futures prices? (more than $1.00 below).

    That is not the "Kitco bid", it is the Spot bid/ask

    Is that true? Then my answer above is incorrect. I thought Kitco made a market in silver.

  • jclovescoinsjclovescoins Posts: 1,931 ✭✭✭✭✭

    Okay, then why does spot bid/ask have such a spread that is deviating from the futures?

  • jmlanzafjmlanzaf Posts: 35,564 ✭✭✭✭✭

    @TheMayor said:

    @jmlanzaf said:

    @jclovescoins said:
    My point is simply this: who decides that the Kitco bid should now be so much different from the futures prices? (more than $1.00 below).

    That is not the "Kitco bid", it is the Spot bid/ask

    Is that true? Then my answer above is incorrect. I thought Kitco made a market in silver.

    I don't know where they get the ask. But they have the spot prices on the left hand side of their homepage. They have a separate buy/sell price.

    They don't even seem to have any silver for sale.

    The buy/sell on the Kitco silver pool is (currently) Sell=$30.22 and Buy=$27.82 against a stated Spot Bid ask of $27.82/$28.82

    Again, not sure where they get the $28.82 number but it isn't their price paid.

  • jmlanzafjmlanzaf Posts: 35,564 ✭✭✭✭✭

    @jclovescoins said:
    Okay, then why does spot bid/ask have such a spread that is deviating from the futures?

    The bid is the future bid. I'm not sure where they get the spot ask or how they calculate it. But it always widens when volatility increases for some reason.

  • jmlanzafjmlanzaf Posts: 35,564 ✭✭✭✭✭

    There's this. It doesn't directly answer the question as to the source:

    https://www.kitco.com/silver-price-today-usa/index.html

    Basically the bid and ask on the spot market are the price for immediate delivery/receipt. So, I'm guessing no one will sell you any 1000 oz bars for less than a $1 per ounce premium at this time.

  • jmlanzafjmlanzaf Posts: 35,564 ✭✭✭✭✭

    Apmex seems to be the only one with any volume of product but their premium has swelled.

    Pretty soon I can start selling my US Mint commemorative silver dollars! LOL

  • rickoricko Posts: 98,724 ✭✭✭✭✭

    The 'ask' reflects an opportunity for profit during heavy buying.....Cheers, RickO

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