Silver spot vs premium tracking thread
cohodk
Posts: 19,100 ✭✭✭✭✭
Screenshot of Apmex website with silver quote (top) and offering prices. Hopefully derryb forgives my questioning of source and timing of data and continues with this thread. It should be fun to monitor. Screenshot taken within 5 min of this posting.
Excuses are tools of the ignorant
Knowledge is the enemy of fear
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APMEX and ASE's. Certainly won't find many "premiums" higher than that combination.
BGASC is currently selling ASE monster boxes for $1K less than the Big A. Also monster boxes of Maples, Britannia's, or Philharmonics for $3K less than the Big A's ASE monster boxes.
Goal is to determine not simply the price difference (delta) between spot and physical silver but the increase or decrease over time of that spread. The data should show if premiums are going up or down and at what rate. Source of the physical (ASE in this case) and spot pricing is irrelevant as long as the study is consistent with its source.
Using the single ASE, the OP's initial data post shows a delta of 11.99, a 45% premium over spot. Over time the spot price, selling price and resulting premium for the single ASE can each be charted. While this is just one product from a single supplier it should be fairly representative of premium movement for physical silver as a whole. If one cares to use a different supplier and/or a different product to reveal any variations in the data of this study, feel free to do so.
Hopefully the OP will provide updates at a constant interval (every one, two or three days) using the constant 5 p.m. data grab.
"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
If one cares to use a different supplier and/or a different product to reveal any variations in the data of this study, feel free to do so.
Yes, and all should post as they deem appropriate.
Knowledge is the enemy of fear
Not my sheet, someone from Reddit with a bunch of time on their hands.
interesting, I would have guessed lower premiums on the big bars.
"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
So based on the dude’s screenshot, you should arb the silver in Australia and sell in Germany.
Upstate Dealer Wholesale 5/5
Paying more for Philharmonics than Libertads or Pandas! Not the market I see.
Loves me some shiny!
The expenses and any import tax would negate any gain.
"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
Knowledge is the enemy of fear
my only issue with this concept is that there are price quotes but no sales data . I don't see a fix for it.
APMEX can quote 38$ (for a single ASE) but we can't see the volume sold at the price.
I know that after big moves up prices go up quickly , and after big moves down prices are sticky at the higher level for a while then fall.
What I don't know is buyers reaction to that. Myself if I wanted ASE's and they jumped to 38 I would ,wait a week for the premium to decline. Without sell thru data we cant tell if buyers are actually paying 38 or APMEX is using the high premium to cover a product shortage by kind of stiff arming buyers with that 38 until they can secure enough product to lower the premium and get sales flowing again.
Its a common business tactic to use high premiums to throttle sales in times of shortage or lower premiums to kick start sales( loss leader strategy)
Another tool is to show a product with a price but show zero in stock
APMEX and to a lesser extent provident do this
for instance heres this this has a price but we dont have any give us your email and we will tell you when they come in. Is there a useful metric generated by presses of the notify button? Why bother quoting a price of 32.85 each when you order 300 koalas if you are out of stock? Now at some point if they really dont have and can't get any the whole listing will disappear from the site , I assume they think its possible they will get 300 or if the notify button gets pressed enough then they will "discover" a few crates in a storeroom et voila
https://www.providentmetals.com/australian-koala-1-oz-silver-coin.html
thread is about premiums asked, not premiums paid.
Premiums asked are an indicator of what buyers are willing to pay. If they won't pay that premium it will come down.
As Coho would say, high premiums fix themselves.
"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
eBay completed listings show 100 gram Scottsdale poured bars bringing $140 delivered vs a melt value of $88. A premium of nearly 60%.
Upstate's paying +$6.25 and selling +$9.95 dealer wholesale for ASEs. The majority of recent eBay sales are in the $725-$775 per roll range ($8.75-$11.25 over).
ASE always commands a premium over other govt issues but the gap is much wider at the moment probably due to the fact that they stopped shipping type 1 coins in early April in preparation of the Type 2 release. There has been no change in mint released ASE sales figures for almost 5 weeks. Once Type 2 starts shipping I am sure the premium will remain high due to people wanting the new design but once people have their type 2 example look for premiums to drop significantly.
interesting observation. I would not assume it has anything to do with the new coins to be coming out soon. With the current demand one would expect the mint to produce consistently stopping only to replace worn dies. Swapping of bullion dies is a routine operation at the mint, whether it be a new design or the old design.
If in fact the mint has not minted any ASEs in almost five weeks, in the face of high demand, there is a serious underlying problem that has not yet been disclosed to the public.
Also, hopefully the mint will add "Type 2" to the sticker it puts on the boxes of Type 2 coins. Be a shame for a box buyer down the road to not know which type is inside unless he breaks the strap seal.
"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
In years past they sold no bullion ASEs or only minimal amounts in December while switching over to the new years dates. You give the government too much credit, efficient is something they are not.
A pink monster box would solve that problem, DerryB!
ive been dumping 30 gram silver pandas at my antique booth for $35 each for a week ive sold 50 at that price singles in individual bags i don't know how many customers that was i don't hang out there just pop in to load the case.
6.25% sales tax on top of that
24 times face for a sack of dateless SLQ's also
a tick over melt for a sack of 40% halfs as well
there is demand above spot for coin silver for sure
heck I sold 2 sacks of netherlands 72% guldens for over spot
I'm liking this period , that being said boring old ASE's for 38 bucks is just stupid
If you look at the mints sales numbers for silver eagle by month for each year you will see that the mint on only a few occasions slowed up on sales of current year eagles in the month of December. Many years December sales were strong.
And at no time at the year end did they go with reporting no sales of eagles in December. The mint is efficient at pumping out silver eagles, more than 30 million last year alone. And changing dies is something they do quite often during production.
Like I said to your claim that the mint currently has not minted any ASE's in five weeks, something is amiss. Sales records indicate they have never stopped production that long before switching to a new die.
"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
_> And at no time at the year end did they go with reporting no sales of eagles in December. _The mint is efficient at pumping out silver eagles, more than 30 million last year alone. And changing dies is something they do quite often during production.
Yeah you only need to go back to 2019. lol
https://www.usmint.gov/about/production-sales-figures/bullion-sales?program=American+Eagle&+AmericatheBeautifulSilverBullion5ozCointype=&+AmericanBuffalotype=&+AmericanEagletype=Sales+totals+by+Month&AmericatheBeautifulSilverBullion5ozCoinSalestotalsbyMonthyear=&AmericatheBeautifulSilverBullion5ozCoinYear-datedcoinssoldyear=&AmericanBuffaloSalestotalsbyMonthyear=&AmericanBuffaloYear-datedcoinssoldyear=&AmericanEagleSalestotalsbyMonthyear=1015&AmericanEagleYear-datedcoinssoldyear=
here's an FYI from a may 4th online video conference.
https://coinweek.com/us-coins/the-coin-analyst-us-mint-roundtable-on-2021-morgan-and-peace-silver-dollars/
I draw no conclusions as to may and june type 1 sales. I'm waiting for the movie.
Yes, one year, and in that year they sold half as many ASEs in November than in other months of the year. This indicates they depleted their stock of current year ASE one month earlier than other years. You will also note that for those other years most of them sold less ASEs in December than in earlier months. Appears the mint is efficient at not getting stuck with prior year monster boxes when the next year arrives. Go Mint.
"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
As far as end of year sales go, do not forget the likely decrease in demand in anticipation of next year’s issue.
testing! blast off!! I gotta parrot on my shoulder. What was the question again??
Loves me some shiny!
update?
Rising....Apmex price is single ungraded random year BU price used in the OPs screen shot
Date Spot APMEX Premium Premium% Premium%2Spot
5/4/2021 26.63 38.62 $11.99 31.0% 45.0%
5/7/2021 27.61 39.60 $11.99 30.3% 43.4%
5/11/2021 27.63 40.73 $13.10 32.2% 47.4%
Loves me some shiny!
Thank you to the OP for tracking this info, and thank you to Derryb for the succinct analysis of factors contributing to premium variations over time.
Basic question: who are the client base of Upstate Gold and Bullion? They describe themselves as a wholesaler - can I assume they will deal with anyone who can make a purchase above some minimum?
(The practical question-can I buy a single 1000 ounce bar from them for 70 cents over spot?)
Dealer Account Qualifications:
You are eligible to apply for a dealer account if:
You are a member of one of the following organizations: CCE, CoinNet, PNG, ICTA, JBT, PCGS or NGC authorized dealer;and/or:
You are a certified financial planner or stock broker;and/or:
You have a storefront or website where you buy or sell coins or bullion;(eBay sellers may qualify at the discretion of Upstate Coin & Gold)and/or:
You can prove that you have set up as a coin dealer at 6 or more shows in the past year.
https://trading.upstatecoins.com/open-dealer-account/
Looks like buy prices on ASEs continue to rise. 90% and some bar denominations are dropping a bit.
This time may be different. Instead of high premiums fixing themselves we just might see a low spot fix itself. But as most all of us here know, spot does not have a "normal" price discovery mechanism. However, if premiums continue to remain high or better yet continue to climb, the bullion banks may just crank spot up to close the premium gap to protect its very limited vault inventory. And as that gap is closed, true price discovery in the physical market will see premiums increase again. Poor old bullion banks may find themselves in a Catch 22.
As I have opined many times, a high premium encourages paper holders that do not normally take delivery to demand delivery. A high increase in delivery demand will deplete the highly leveraged COMEX vaults. Empty vaults result in failure to deliver. The success of a futures market depends on it's ability to deliver on its promises and to maintain the game of musical chairs. Two fixes for the bullion banks that control the COMEX: (1) reduce demand by closing the gap on premiums or (2) increase the physical inventory in the vaults. Either one will result in higher physical prices. And yes, COMEX has been know to settle delivery demand with cash, but how long can they bleed cash, especially when it will take more to satisfy customers?
My amateur analysis:
Spot will rise to reduce COMEX delivery demand.
Rising spot will increase increase physical prices.
Rising price will fuel physical demand and price.
Premiums could easily increase resulting in even higher prices.
The spring is fully compressed.
"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
Do you know of any paper holders that have demanded delivery?
I know a lot of paper holders and they have never been encouraged to take delivery. Its just much more simple to roll a contract into another contract.
Knowledge is the enemy of fear
I don't need to talk to paper holders to realize that if silver can be bought and delivered on the COMEX for $27 and then sold in the physical market for $36+ then the encouragement is definitely there to take delivery, especially in the face of rising premiums.
"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
@derryb said: “ I don't need to talk to paper holders to realize that if silver can be bought and delivered on the COMEX for $27 and then sold in the physical market for $36+ ”
If you take delivery of a standard COMEX contract, you will receive five 1000 ounce bars. If spot is 27, the Upstate Gold and Bullion pricing suggests that you won’t get more that 27.70 per ounce. (and 27.10 if you sell to them) Not a massive premium for your effort.
You are trying to portray something that is not fact based or practiced in reality. You are making up stuff to support a narrative that is not factual.
Spot silver will go up when spot silver goes up. Yes..its that simple.
Knowledge is the enemy of fear
Knowledge is the enemy of fear
Knowledge is the enemy of fear
Would you rather?
One monster box or (9) 100oz bars?
Knowledge is the enemy of fear
c none of the above 90 10 oz bars
monster boxes are stupid always have been. Oh lets invent a form of silver which has both large size and huge premiums .
Cui bono ? Its a paradox the buyers of the box would receive maximum benefit from breaking the box up but many don't.
Selling as I do from an antique booth , and having at the moment strong buyers on a weekly basis I should be buying and breaking monster boxes. Problem , the initial premium is too high its unreliable to think they would sell fast enough to risk it.
If I had 2 or 3 boxes last april I would have cleaned up putting 20 singles a week in the booth though.
Its all about where you buy and where you sell. If I put a sealed tube out it wouldn't sell but 20 singles would sell in 2 days. possibly to a single customer
I can sell 14k gold rings with ugly stones all day long but the more desirable plain bands don't move.
Why doesn't the guy who has bought 100 dollars face 10 bucks at a time just buy the whole 100 at once?
I put my phone number in the case they can call me and play lets make a deal they never do
There was a guy who was looking at my and passing on everything and I happened to be there I said those 1948 cinco pesos are a great form of silver to buy! He says they are too expensive . I say do you not like mexico , no I like mexico , I said tell me what silver coin from mexico you like and I will bring it in Friday and he would not say , flat out would not reply.
I feel like Sigmund Freud at times , how can I help these idiots if they wont just say what they want?
I know I wanted 90 10 oz bars in the above example but I've put those out and they dont sell. THe same guy who turns up his nose at a bar will buy 10 1 oz coins instead . They all have dreams of reselling them singly and reclaiming they premiums in depreciated dollars I guess.
Why work that hard for something so nebulous ?
The average retail buyer who had a bird in his hand and saw 2 birds in a nearby bush would probably throw the one bird at the other 2 and go hungry. And not just once they would do that over and over and over
ASEs still showing crazy premiums. I was selling @37.50 fairly regularly past few weeks. This week not even a bite.
From a Feb 2, 2021 peak of 399.7 million ozs., 46.2 million ozs. have left COMEX vaults. COMEX continues to bleed silver.
I don't know about your silver, but my silver will be worth $50 by year end.
"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
How are the premiums holding out?
+$15 on 2021 ASE at the A unless you buy a ton and then you get +$13 if you buy 3, yes 3 monster boxes worth.
and that is on sale!
be nice to have a formal update in format of the OP
only 10.25 on ASE?
call today!
And they are paying $5 over for garbage painted, toned, milk spotted etc.