"Coin collectors would never make a noticeable dent on the market."
Azurescens
Posts: 2,745 ✭✭✭✭✭
"We would only see a price change in the market if the people holding paper demanded physical delivery, all at the same time."
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There is no silver shortage. There is a shortage of sellers.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
I agree with @derryb.... People are holding, and also, some are acquiring at elevated prices when available. Holders are betting on rising demand, obviously. Cheers, RickO
If you look at the difference between what a bullion dealer sells AGEs for vs the price they will give you to buy them back, it doesn't speak of shortage. It is more indicative of a belief, at least by bullion dealers, that the price for physical silver in small form factor is overpriced in the short term. There are likely lots of people that would sell more silver back to a dealer, if not for the current 20% spread (which btw is far greater than the spread on rhodium [actual shortage] these days).
This is my opinion also. The high spreads represent poor liquidity. I can't think of a single other asset in a supposedly liquid market (silver) that sells for anywhere near equivalent spreads. If it were only a shortage of the physical metal, seems the bid-ask should be a lot narrower.
I haven't checked in the last week+ but when I did, the source was similar to your post (+/- a few percent)_ and noticeably lower than a few months ago or last March when it first spiked.
Poor liquidity could just mean strong hands not wanting to sell physical?
Disclaimer: Things can get dark down here in the gutter. As these Redditt kids would say HODL????? To Da MOON Malafalas!!!!
The whole worlds off its rocker, buy Gold™.
There's a shortage of small rounds and bars. Plenty of 1,000 oz. bars to be had if they were wanted.
They just disappeared off of the face of the earth? Where are they?
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
I just checked, Helca is still pulling it out of the ground, the US Mint is still turning it into silver eagles and APMEX has lots of monster boxes for sale. Ebay has 954,000 listing for silver in the coin category.
There is no silver shortage. There is a shortage of cheap silver, but only when compared to prices a month ago. six months from now today's prices may well be considered cheap.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
The silver market isn't that big, considering the size & scale of the other financial & commodity markets. Besides, physical silver is actually real and not hypothecated. Those 1000 oz bars can disappear into the woodwork if there is enough demand.
I knew it would happen.
IMHO - the only 2 long term drivers that matter to Silver are:
1: USD weakness
2: Industrial use
If #1 goes DOWN and #2 goes UP then Spot will take of itself. Retail surge will just be a sweetener.
Loves me some shiny!
I believe more strongly than ever that we will have a buying panic. Several things will cause it but chiefly it will be triggered by a default on shorts preceded by short covering. Sellers will vanish and industrial buyers will lead the charge as more and more silver is found to be mere paper. Massive fraud will be uncovered as the panic plays out feeding it.
It is important that cooler heads sell into this. Not only will it limit damage done by the shenanigans and fraud but it might be very beneficial to the sellers since prices will far overshoot a rational level.
Don't forget that government will not take action against the fraud except in the most egregious cases. They will side with the banks and blame the victims for the turmoil instead of the banks who are the perpetrators of ongoing fraud.
That should raise the "bid" and shrink the spread. Metal dealers could raise their buy prices to entice physical metal holders to sell which they apparently are not.
An outlier bid-ask spread (which is what exists with physical silver now) supposedly concurrently being liquid is an oxymoron.
To give you an extreme point of comparison, a lot of real estate is probably more liquid than physical silver now. Probably going to get some disagreement on this (because it takes longer to sell) but in this Bizarro world economy we have now, the spreads on it are actually lower.
The weirdest economy ever, literally.