Blind are those who live in caves, bunkers or have head in sand.
As the saying goes "It sure is dark down in the gutter". RGDS!
By George, you're right! It does sorta look like a gutter.
Oh snap! Back to where it was 15 years ago. Luvin me SLV (and every other asset on planet earth the last 2 days). LOL
So you hate silver (so called "gutter"), but you "Luvin" SLV ?
Here is some news that I will actually enjoy bringing to you:
Over its entire life span SLV has ALWAYS performed WORSE than silver. This is because the amount of silver in each "share" of SLV has, and always will, decline over time.
I click a button to buy and click a button to sell. It takes seconds, no time fumbling around on eBay trying to recoup premiums, no trips to the vultures at the LCS. Time is $$$$. Besides this is the precious metals fourm Au etc. Gutter is not a PM, hell it's a byproduct of copper mining. The got to pump it to dump it. LOL RGDS!
I'm guessing the LCS (Local Coin Shop) doesn't like you, and any buy/sell prices they quote you are commensurate with that. eBay is not a great venue for bullion. There are better arenas to buy and sell in, such as coin shows.
PS:
According to the Collins English Dictionary, the exact definition of "precious metal" is:
"a metal of the gold, silver, or platinum group."
@blitzdude said:>
I click a button to buy and click a button to sell. It takes seconds, no time fumbling around on eBay trying to recoup premiums, no trips to the vultures at the LCS. Time is $$$$. Besides this is the precious metals fourm Au etc. Gutter is not a PM, hell it's a byproduct of copper mining. The got to pump it to dump it. LOL RGDS!
Great investing strategy - invest in something you trash daily via an underlying investment vehicle that loses value every day...
@blitzdude said:>
I click a button to buy and click a button to sell. It takes seconds, no time fumbling around on eBay trying to recoup premiums, no trips to the vultures at the LCS. Time is $$$$. Besides this is the precious metals fourm Au etc. Gutter is not a PM, hell it's a byproduct of copper mining. The got to pump it to dump it. LOL RGDS!
Great investing strategy - invest in something you trash daily via an underlying investment vehicle that loses value every day...
,,,and is most likely not backed by what you think you are investing in. LOL
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
@blitzdude said:>
I click a button to buy and click a button to sell. It takes seconds, no time fumbling around on eBay trying to recoup premiums, no trips to the vultures at the LCS. Time is $$$$. Besides this is the precious metals fourm Au etc. Gutter is not a PM, hell it's a byproduct of copper mining. The got to pump it to dump it. LOL RGDS!
Great investing strategy - invest in something you trash daily via an underlying investment vehicle that loses value every day...
I can't teach you everything. I "invest" in many things, gutter is not one of them. SLV is a trade, you know buy low sell high.....or maybe you don't know. lol Perhaps someday you will figure it out. RGDS!
The whole worlds off its rocker, buy Gold™.
BOOMIN!™
I click a button to buy and click a button to sell. It takes seconds, no time fumbling around on eBay trying to recoup premiums, no trips to the vultures at the LCS. Time is $$$$. Besides this is the precious metals fourm Au etc. Gutter is not a PM, hell it's a byproduct of copper mining. The got to pump it to dump it. LOL RGDS!
I can't teach you everything. I "invest" in many things, gutter is not one of them. SLV is a trade, you know buy low sell high.....or maybe you don't know. lol Perhaps someday you will figure it out. RGDS!
You troll so much you can't even keep your lies straight...
Based on the documentation that I’ve been providing, the premiums for retail silver have continued to diverge from the spot price, and have not moved in lockstep whatsoever. This is exactly why I’ve taken the time to document it in this thread. The direction of premiums has been very clear and so has the spot price of silver been very clear for the past 2 months.
Can things change? Of course. Instead of a legit response to a basic question, I get a discourse on buying jelly beans in bulk.
The premium and the buy-sell spread are only half of the equation. My question about why this might be happening was intended to lead to some clarity by suggesting whatever possibilities there might be.
So, the question remains - why would spot be trending down while premiums continue to increase?
A fairly simple question.
Q: Are You Printing Money? Bernanke: Not Literally
So, the question remains - why would spot be trending down while premiums continue to increase?
A fairly simple question.
The answer lies in the difference between paper silver promises with their unlimited supply and the real McCoy that is undergoing limited available supply that is rapidly decreasing in the face of increasing demand. A matter of time before we see this with other precious metal spreads.
The perfect storm for higher premiums. The black swan that might just upset the chessboard:
1. A high volume move from silver ETFs to real silver. After all, the ETFs are built on promises and faith.
2. A massive depletion from COMEX and/or LBMA vaults
3. A massive buy position from the futures bullion traders. After all they are the ones that determine spot price.
4. A move to PMs rather than the historical move to cash in a liquidity crunch or loss of faith in the central bank. This occurred in 08/09 with everything initially selling off. PMs however were among the quickest to rebound.
2023 is going to bring worsening liquidity and inflation. This will murder faith in the central bank. Faith is everything when it comes to a currency.
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
Expect the trend of lower gutter prices to continue. Expect lower premiums as well. You can dream up conspiracy after conspiracy but at the end of the day we have that wonderful thing called reality. RGDS!
The whole worlds off its rocker, buy Gold™.
BOOMIN!™
@blitzdude said:
Expect the trend of lower gutter prices to continue. Expect lower premiums as well. You can dream up conspiracy after conspiracy but at the end of the day we have that wonderful thing called reality. RGDS!
Spot prices will rise as well as premiums for the very reasons I outlined above.
Market forces are 99.999999% man made, whether they be supply/demand or false buy/sell signals on a future's exchange (well documented by DOJ prosecutions). I suppose everything thing in this world that you disagree with is a "conspiracy theory." Guess that makes me a conspiracy theory. LOL
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
So, the question remains - why would spot be trending down while premiums continue to increase?
A fairly simple question.
The answer lies in the difference between paper silver promises with their unlimited supply and the real McCoy that is undergoing limited available supply that is rapidly decreasing in the face of increasing demand. "
If that were true, there should be a significant premium on 1000 ounce bars, and there is not.
@blitzdude said:
Expect the trend of lower gutter prices to continue. Expect lower premiums as well. You can dream up conspiracy after conspiracy but at the end of the day we have that wonderful thing called reality. RGDS!
Spot prices will rise as well as premiums for the very reasons I outlined above.
Market forces are 99.999999% man made, whether they be supply/demand or false buy/sell signals on a future's exchange (well documented by DOJ prosecutions). I suppose everything thing in this world that you disagree with is a "conspiracy theory." Guess that makes me a conspiracy theory. LOL
Well, you were partially right when you said "man-made". Man could give a rats behind about gutter metal thus it is irrelevant in the place we call reality. Gutter could completely vanish from the universe tomorrow and reality wouldn't miss a beat (less a few colloidal blue smurfs, and tin foil hat junkies). Gutter will never save the world regardless of what all the snake oil salesmen have brainwashed you to believe. And now back to the words of your master:
RGDS!
The whole worlds off its rocker, buy Gold™.
BOOMIN!™
So, the question remains - why would spot be trending down while premiums continue to increase?
A fairly simple question.
The answer lies in the difference between paper silver promises with their unlimited supply and the real McCoy that is undergoing limited available supply that is rapidly decreasing in the face of increasing demand. "
If that were true, there should be a significant premium on 1000 ounce bars, and there is not.
The demand for 1000 oz bars is where on the chart of silver product demand?
When 1000 oz bars are the only available option be prepared for high premiums with them. Like everything else, price equilibrium is determined by supply and demand. Those truly following any specific market understand this well.
Now, if you agree with gutterdude and don't believe supply and demand are responsible for high premiums then please present your case.
Speaking of 1000 oz bars, COMEX vaults are currently being threatened with a short squeeze by deep pocket buyers from China and India. We'll see how that plays out.
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
I think we can safely say that the market segment for 1000 oz bars is different from the market segment for smaller fabricated silver.
So, the demand is different for each, but the demand for both 1000 oz bars and smaller fabricated silver can theoretically spill over into the other market segment easily if a big enough shortage occurs in either segment for a long enough time period, and the premiums in either segment can be affected by such a shortage.
As blitzie points out, silver is mainly a by-product in other mining operations. That being the case, I would expect that the supply for 1000 oz bars is tanking while the economies of the world wind down. On the demand side, I do think we see high demand for silver in smaller, fabricated silver hence the high premiums, so will the same phenomenon happen in Comex at some point?
Both Hygashiyama and derryb seem to agree that demand for 1000 oz bars is a significant variable in silver pricing. Perhaps it's time to start tracking the premiums on 1000 oz bars. What is the best source for that data? I'd be interested in documenting those premiums in this thread.
Q: Are You Printing Money? Bernanke: Not Literally
premiums on 1000 oz bars are irrelevant because the bars themselves are pretty much irrelevant unless you are buying them to convert the silver into a product that is relevant. At this point the true premium of the 1000 bar is reflected in the fabricated product premium.
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
I'm not sure what the cost to take delivery and transport 1000 ounce bars is. But prior to the current run up in premiums the cost to convert 1000 ounce bars into 1 ounce rounds was 70-90 cents per ounce. I know golden state mint was charging 90 cents per ounce with discounts for higher volume. I am assuming they were making money at those prices. I am not aware of any mints that currently offer this service. I'm not sure that there is a lack of demand for 1000 bars, seems like more of lack of capacity to convert them to a market acceptable product.
Unless you have an extremely short attention span, it's been noted twice now - that the OP began this thread using Apmex prices as a basis for the discussion. I rather doubt that many people are paying the 60% premium, but I do suspect that Apmex has built their premiums into a cost structure that's based on all sizes and quantities of silver bullion. Not so crazy.
I think that the market for 1000 oz bars is indeed relevant unless it can be shown that the majority of demand for silver is being met via smaller sized bullion. I'm going out on a limb and my supposition is that the premium decreases on a gradient curve as the sizes and quantities increase. Maybe someone here can look into that. It only makes sense that fabrication & distribution costs add to the premium in those instances, but it might be revealing to see where the largest price breaks occur, and where they originate - from the producers, fabricators, distributors or retailers.
Along the lines of what tyler267 has mentioned, only in more extensive detail. Nothing crazy about normal business practices, making a profit or even hedging a position in a volatile market.
The one thing we do know is that the paper market is heavily-manipulated and that Comex inventories are declining.
Q: Are You Printing Money? Bernanke: Not Literally
@jmski52 said:
Unless you have an extremely short attention span, it's been noted twice now - that the OP began this thread using Apmex prices as a basis for the discussion. I rather doubt that many people are paying the 60% premium, but I do suspect that Apmex has built their premiums into a cost structure that's based on all sizes and quantities of silver bullion. Not so crazy.
I think that the market for 1000 oz bars is indeed relevant unless it can be shown that the majority of demand for silver is being met via smaller sized bullion. I'm going out on a limb and my supposition is that the premium decreases on a gradient curve as the sizes and quantities increase. Maybe someone here can look into that. It only makes sense that fabrication & distribution costs add to the premium in those instances, but it might be revealing to see where the largest price breaks occur, and where they originate - from the producers, fabricators, distributors or retailers.
Along the lines of what tyler267 has mentioned, only in more extensive detail. Nothing crazy about normal business practices, making a profit or even hedging a position in a volatile market.
The one thing we do know is that the paper market is heavily-manipulated and that Comex inventories are declining.
Another reason that smaller pieces of silver are desired more than larger ones is related to confidence in the authenticity of it. How would you know that a 1000-troy-oz silver bar does not have a lead or copper core in it ? Small pieces (such as Silver Eagles) are more easily authenticated. And, of course, they are divisible whereas a 1000 oz bar is not.
100 % agree. (with the clarification that wholesale is available to anyone willing to make a big purchase.)
When I argue that there's not much of a disconnect between spot and physical, I'm talking about "wholesale". Annual silver consumption is split approximately as follows:
Virtually all producers in these categories, whether big electronics firms or wholesale jewelry makers or the makers of planchets for the US mint are acquiring silver for very close to spot. (in fact, less that you are I will pay for a 1000 ounce bar, which I think is about $ 2 above spot).
The fact that some retail silver products (such as ASEs) sell for well above spot is not indicative of a problem in COMEX or the financial markets more generally.
A related question: what is a good indicator of the cost of silver to a small retail investor? If someone is truly interested in the precious metal value, shouldn't we look for the cheapest way to acquire silver from a reputable source? For example, if you want to buy 500 ASEs from JM bullion, they will charge you about $ 36.50 per ounce. If you're willing to buy silver rounds from JM Bullion, you can buy 500 for about $ 25 each. From that perspective, even for the small retail buyer, the "disconnect" between spot and physical does not seem so great.
I assume most here are buying small pieces and therefore think that any discussion about silver premiums here must realize high premiums are in effect.
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
The fact that some retail silver products (such as ASEs) sell for well above spot is not indicative of a problem in COMEX or the financial markets more generally.
COMEX and LBMA vault silver inventory is and has been on the decline. Much of these large bars are used for fabrication of the products we buy. While ASEs are struck on silver not from these vaults, the bleeding of the vaults is indicative of a supply problem. We all know that supply is one leg of price equilibrium and while we may not vision a direct link between that vault silver and the products we purchase I believe it safe to assume that there is an indirect link. The other effect of COMEX/LBMA physical supply issues is the impact it has on market perception and how that perception affects the silver market as a whole.
A related question: what is a good indicator of the cost of silver to a small retail investor? If someone is truly interested in the precious metal value, shouldn't we look for the cheapest way to acquire silver from a reputable source? For example, if you want to buy 500 ASEs from JM bullion, they will charge you about $ 36.50 per ounce. If you're willing to buy silver rounds from JM Bullion, you can buy 500 for about $ 25 each. From that perspective, even for the small retail buyer, the "disconnect" between spot and physical does not seem so great.
A good indicator of the cost price of silver to the small retail investor is what buyers are paying at the moment for the specific piece(s) the investor is considering. Yes, a "stacker" should be looking for the cheapest way to acquire silver, BUT he must also consider finding a buyer when it becomes time to sell. As a serious stacker there are plenty of silver products that I will not buy for that very reason. The big question is "at some time in the future when I go to resell this item will I easily find a buyer and will I be rewarded with a bigger premium or at least not a lower premium than I paid. Fortunately I so far have made the right call by limiting my purchases over the past 20 years to ASEs and RCM 10 oz. bars. Premiums for these two items are now among the highest. I have been selling off some that inventory at a nice profit and then buying more ounces of a lower premium silver that I believe will see the next jump in premium.
Those avoiding the high premium items might just find down the road that current high premiums become even higher. If that becomes the case then buying ASEs now would prove to have been the smart play. For that reason I continue to also pick up ASE tubes when I find a good (still high) price.
Bottom line: You buyer down the road is most likely going to be focusing on what he/she believes to be quality (unless premiums are very high as is now the case) because he believes his future buyer will be doing the same.
If available supply continues to decrease and demand continues to increase then all the cards are off the table and all silver product premiums will go through the roof. Perceived quality products such as ASEs however will continue to boast the highest premiums. If you look at gold premiums you do not see what silver is experiencing. Further proof that premiums are a result of dwindling available supply and increased demand for that limited available supply. A simple matter of more dollars chasing fewer items.
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
Historically silver refiners deliver silver as 1000 ounce bars or casting grain. There are a lot of 1000 ounce bars in existence.
In the physical bullion market the 1000 ounce bars or grain are re-melted and fabricated into smaller bars for sale to investors. There is no difference in the silver itself just the size of the bar/round.
For privately minted silver there seem to be two factors at play.
1) The increase in demand is exceeding the capacity of the private mints.
2) There are fewer private mints and some of the largest mints are now controlled by the same owner (same thing is happening with direct to consumer websites).
I don't believe there is a shortage of physical silver just a shortage of available capacity to convert the large bars to market acceptable sizes. If I'm right capital will be invested in capacity and premiums will eventually return to historic levels.
Just think when gutter metal hits $3 again we can rejoice about how we have a 75% premium and it's really worth $5.25 in bunker land. #winning #Apmex #ase #trinkets #Ace² RGDS!
The whole worlds off its rocker, buy Gold™.
BOOMIN!™
@blitzdude said:
Just think when gutter metal hits $3 again we can rejoice about how we have a 75% premium and it's really worth $5.25 in bunker land. #winning #Apmex #ase #trinkets #Ace² RGDS!
really bothers you that some are making so much profit on premiums alone. doesn't it?
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
@jmski52 said:
Nice screen shots, good documentation.
so spot price dropped a bunch and real price went up. Gotta be gutter math.
Good luck finding anyone willing to pay you Apmex premiums. I mean you of all people should know because you personally have had rolls of ASEs on the BST for $100 less than the advertised APMEX premiums (delivered no less) and haven't moved any of them for months. We call that gutter dreamz. RGDS!
The whole worlds off its rocker, buy Gold™.
BOOMIN!™
@cohodk said:
Screenshot of Apmex website with silver quote (top) and offering prices.
Increase from 45% to 86% premium from May 4, 2021 to October 11, 2022? Insanity.
>
Good thing ASEs are only a small portion of the overall gutter market. Nobody wants to provide the mint polished planchets at spot when they can stamp their own coin and sell at a slight premium. Not representative of current conditions at all. THKS!
The whole worlds off its rocker, buy Gold™.
BOOMIN!™
@jmski52 said:
Nice screen shots, good documentation.
so spot price dropped a bunch and real price went up. Gotta be gutter math.
Good luck finding anyone willing to pay you Apmex premiums. I mean you of all people should know because you personally have had rolls of ASEs on the BST for $100 less than the advertised APMEX premiums (delivered no less) and haven't moved any of them for months. We call that gutter dreamz. RGDS!
If APMEX was not getting their price don't you think they would lower it. While I live by the buy low, sell high golden rule, I also live by the sell lower than the competition rule.
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
@jmski52 said:
Nice screen shots, good documentation.
so spot price dropped a bunch and real price went up. Gotta be gutter math.
Good luck finding anyone willing to pay you Apmex premiums. I mean you of all people should know because you personally have had rolls of ASEs on the BST for $100 less than the advertised APMEX premiums (delivered no less) and haven't moved any of them for months. We call that gutter dreamz. RGDS!
If APMEX was not getting their price don't you think they would lower it.
One would think but then again, they sure do have a load of them available during this SUPPOSED great gutter shortage, we got whales buying 17+ million ASEs etc. :roll Good thing for Apmex they sell a zillion other trinkets in addition to ASEs.
While I live by the buy low, sell high golden rule, I also live by the sell lower than the competition rule.
Right on Ace. CNGRTS!
The whole worlds off its rocker, buy Gold™.
BOOMIN!™
@jmski52 said:
So, the question remains - why would spot be trending down while premiums continue to increase?
A fairly simple question.
The answer to that question is the same as to this question...
Why will premiums decrease when spot increases?
two completely different questions.
One is happening.
The second one is an assumption that may very well not happen.
Higher premiums could easily be a paradigm shift (the new norm) and not just an anomaly.
One could argue that higher prices that are a result of actual (real) supply/demand forces indicate more buyers and/or less available supply. These are the very factors driving currently high premiums on select products. Will it spread and/or increase?
Time will tell.
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
@derryb said:
One could argue that higher prices that are a result of actual (real) supply/demand forces indicate more buyers and/or less available supply. These are the very factors driving currently high premiums on select products. Will it spread and/or increase?
Time will tell.
So we are to ignore actual (real world) evidence of no to minimal demand for select products which currently have high premiums?
Also, why is it when you write something it is to be taken as fact and when others write it is assumption?
My speculation to explain some of the current high premium is that APMEX, and probably several other bullion dealers, still have inventory of silver they purchased with spot at say $25-27 (where it was July 2020 to April 2022) plus several more dollars an ounce to get green boxes from the Mint or other fees/premium they had to pay. To cover all costs and profit they would need to ask $35 to come out ahead.
Perhaps they have no good reason to sell at a loss now if they expect silver to go back up in the future, so why not ask $35 even when spot now dropped to $20? Sure, there will be minimal demand for their silver eagles, but some folks will eventually buy them in spite of the premium.
Bill Holter in a recent interview with Greg Hunter on USAWatchdog.com corroborates that Silver Eagles are at a 90% premium to spot, if you can find them.
Q: Are You Printing Money? Bernanke: Not Literally
@jmski52 said:
Bill Holter in a recent interview with Greg Hunter on USAWatchdog.com corroborates that Silver Eagles are at a 90% premium to spot, if you can find them.
LOL maybe try ebay.com MILLIONS available.
The whole worlds off its rocker, buy Gold™.
BOOMIN!™
@jmski52 said:
Bill Holter in a recent interview with Greg Hunter on USAWatchdog.com corroborates that Silver Eagles are at a 90% premium to spot, if you can find them.
Mine are available at $55--a nearly 200% premium, so that proves there is high demand.
Also, why is it when you write something it is to be taken as fact and when others write it is assumption?
Never said that what I write or link to is fact. What I write is my opinion. What I link is another's opinion. Take it as you wish. Consider it more background to help shape your own opinion.
Opinions. . . everyone has one.
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
Mine are available at $55--a nearly 200% premium, so that proves there is high demand.
What it proves is that you aren't willing to sell them at a 90% premium. Your asking price won't generate a whiff of demand, at least not for awhile.
LOL maybe try ebay.com MILLIONS available.
A few have sold for less than a 90% premium, but the preponderance of sales are over a 90% premium. lol, have you counted over a million on ebay? I bet not.
Q: Are You Printing Money? Bernanke: Not Literally
Also, why is it when you write something it is to be taken as fact and when others write it is assumption?
Never said that what I write or link to is fact. What I write is my opinion. What I link is another's opinion. Take it as you wish. Consider it more background to help shape your own opinion.
Opinions. . . everyone has one.
I would advise you to use fact to base your opinions, not others' opinions.
Forming an opinion based on others opinions, which are derived from misinformation can be dangerous to one's self. And if permeated throughout society will lead to its downfall, as we are witnessing.
I went to order eagles at AMark yesterday. Spot plus $14. Seemed too much for me to be able to retail and have any chance at a profit. The last time I purchased, they were $10.75 over spot.
But lists of people want silver rounds so I went to order another thousand or so.... that was; until I saw the delivery day is four and a half months out. Great. A lower premium to spot .... only catch is, my five figure would do better at GC, Heritage, or Stacks & Bowers.
faster delivery too.
And the 2023 eagles will be out by then. Gutter ? Get'er. I don't get the inference.
Waiting in the gutter? Waiting on the gutter. Take your pick.
Comments
I'm guessing the LCS (Local Coin Shop) doesn't like you, and any buy/sell prices they quote you are commensurate with that. eBay is not a great venue for bullion. There are better arenas to buy and sell in, such as coin shows.
PS:
According to the Collins English Dictionary, the exact definition of "precious metal" is:
"a metal of the gold, silver, or platinum group."
Great investing strategy - invest in something you trash daily via an underlying investment vehicle that loses value every day...
,,,and is most likely not backed by what you think you are investing in. LOL
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
I can't teach you everything. I "invest" in many things, gutter is not one of them. SLV is a trade, you know buy low sell high.....or maybe you don't know. lol Perhaps someday you will figure it out. RGDS!
The whole worlds off its rocker, buy Gold™.
BOOMIN!™
You troll so much you can't even keep your lies straight...
Let's all sit back, have a drink (myself included) and get back to the topics and not the people discussing the topics.
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
Based on the documentation that I’ve been providing, the premiums for retail silver have continued to diverge from the spot price, and have not moved in lockstep whatsoever. This is exactly why I’ve taken the time to document it in this thread. The direction of premiums has been very clear and so has the spot price of silver been very clear for the past 2 months.
Can things change? Of course. Instead of a legit response to a basic question, I get a discourse on buying jelly beans in bulk.
The premium and the buy-sell spread are only half of the equation. My question about why this might be happening was intended to lead to some clarity by suggesting whatever possibilities there might be.
So, the question remains - why would spot be trending down while premiums continue to increase?
A fairly simple question.
I knew it would happen.
The answer lies in the difference between paper silver promises with their unlimited supply and the real McCoy that is undergoing limited available supply that is rapidly decreasing in the face of increasing demand. A matter of time before we see this with other precious metal spreads.
The perfect storm for higher premiums. The black swan that might just upset the chessboard:
1. A high volume move from silver ETFs to real silver. After all, the ETFs are built on promises and faith.
2. A massive depletion from COMEX and/or LBMA vaults
3. A massive buy position from the futures bullion traders. After all they are the ones that determine spot price.
4. A move to PMs rather than the historical move to cash in a liquidity crunch or loss of faith in the central bank. This occurred in 08/09 with everything initially selling off. PMs however were among the quickest to rebound.
2023 is going to bring worsening liquidity and inflation. This will murder faith in the central bank. Faith is everything when it comes to a currency.
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
Expect the trend of lower gutter prices to continue. Expect lower premiums as well. You can dream up conspiracy after conspiracy but at the end of the day we have that wonderful thing called reality. RGDS!
The whole worlds off its rocker, buy Gold™.
BOOMIN!™
Spot prices will rise as well as premiums for the very reasons I outlined above.
Market forces are 99.999999% man made, whether they be supply/demand or false buy/sell signals on a future's exchange (well documented by DOJ prosecutions). I suppose everything thing in this world that you disagree with is a "conspiracy theory." Guess that makes me a conspiracy theory. LOL
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
@derryb said: "@jmski52 said:
So, the question remains - why would spot be trending down while premiums continue to increase?
A fairly simple question.
The answer lies in the difference between paper silver promises with their unlimited supply and the real McCoy that is undergoing limited available supply that is rapidly decreasing in the face of increasing demand. "
If that were true, there should be a significant premium on 1000 ounce bars, and there is not.
Well, you were partially right when you said "man-made". Man could give a rats behind about gutter metal thus it is irrelevant in the place we call reality. Gutter could completely vanish from the universe tomorrow and reality wouldn't miss a beat (less a few colloidal blue smurfs, and tin foil hat junkies). Gutter will never save the world regardless of what all the snake oil salesmen have brainwashed you to believe. And now back to the words of your master:
RGDS!
The whole worlds off its rocker, buy Gold™.
BOOMIN!™
The demand for 1000 oz bars is where on the chart of silver product demand?
When 1000 oz bars are the only available option be prepared for high premiums with them. Like everything else, price equilibrium is determined by supply and demand. Those truly following any specific market understand this well.
Now, if you agree with gutterdude and don't believe supply and demand are responsible for high premiums then please present your case.
Speaking of 1000 oz bars, COMEX vaults are currently being threatened with a short squeeze by deep pocket buyers from China and India. We'll see how that plays out.
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
I think we can safely say that the market segment for 1000 oz bars is different from the market segment for smaller fabricated silver.
So, the demand is different for each, but the demand for both 1000 oz bars and smaller fabricated silver can theoretically spill over into the other market segment easily if a big enough shortage occurs in either segment for a long enough time period, and the premiums in either segment can be affected by such a shortage.
As blitzie points out, silver is mainly a by-product in other mining operations. That being the case, I would expect that the supply for 1000 oz bars is tanking while the economies of the world wind down. On the demand side, I do think we see high demand for silver in smaller, fabricated silver hence the high premiums, so will the same phenomenon happen in Comex at some point?
Both Hygashiyama and derryb seem to agree that demand for 1000 oz bars is a significant variable in silver pricing. Perhaps it's time to start tracking the premiums on 1000 oz bars. What is the best source for that data? I'd be interested in documenting those premiums in this thread.
I knew it would happen.
premiums on 1000 oz bars are irrelevant because the bars themselves are pretty much irrelevant unless you are buying them to convert the silver into a product that is relevant. At this point the true premium of the 1000 bar is reflected in the fabricated product premium.
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
Appears to some the only thing relevant inside their grapes is buying trinkets from Apmex at a 60% premium. More dollas than sense. Crazy World!
The whole worlds off its rocker, buy Gold™.
BOOMIN!™
I'm not sure what the cost to take delivery and transport 1000 ounce bars is. But prior to the current run up in premiums the cost to convert 1000 ounce bars into 1 ounce rounds was 70-90 cents per ounce. I know golden state mint was charging 90 cents per ounce with discounts for higher volume. I am assuming they were making money at those prices. I am not aware of any mints that currently offer this service. I'm not sure that there is a lack of demand for 1000 bars, seems like more of lack of capacity to convert them to a market acceptable product.
Unless you have an extremely short attention span, it's been noted twice now - that the OP began this thread using Apmex prices as a basis for the discussion. I rather doubt that many people are paying the 60% premium, but I do suspect that Apmex has built their premiums into a cost structure that's based on all sizes and quantities of silver bullion. Not so crazy.
I think that the market for 1000 oz bars is indeed relevant unless it can be shown that the majority of demand for silver is being met via smaller sized bullion. I'm going out on a limb and my supposition is that the premium decreases on a gradient curve as the sizes and quantities increase. Maybe someone here can look into that. It only makes sense that fabrication & distribution costs add to the premium in those instances, but it might be revealing to see where the largest price breaks occur, and where they originate - from the producers, fabricators, distributors or retailers.
Along the lines of what tyler267 has mentioned, only in more extensive detail. Nothing crazy about normal business practices, making a profit or even hedging a position in a volatile market.
The one thing we do know is that the paper market is heavily-manipulated and that Comex inventories are declining.
I knew it would happen.
Another reason that smaller pieces of silver are desired more than larger ones is related to confidence in the authenticity of it. How would you know that a 1000-troy-oz silver bar does not have a lead or copper core in it ? Small pieces (such as Silver Eagles) are more easily authenticated. And, of course, they are divisible whereas a 1000 oz bar is not.
1000 oz bars = wholesale.
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
@derryb said: "1000 oz bars = wholesale"
100 % agree. (with the clarification that wholesale is available to anyone willing to make a big purchase.)
When I argue that there's not much of a disconnect between spot and physical, I'm talking about "wholesale". Annual silver consumption is split approximately as follows:
Industrial -- 50 %
Jewelry -- 25 %
Coins/bars -- 25 %
Virtually all producers in these categories, whether big electronics firms or wholesale jewelry makers or the makers of planchets for the US mint are acquiring silver for very close to spot. (in fact, less that you are I will pay for a 1000 ounce bar, which I think is about $ 2 above spot).
The fact that some retail silver products (such as ASEs) sell for well above spot is not indicative of a problem in COMEX or the financial markets more generally.
A related question: what is a good indicator of the cost of silver to a small retail investor? If someone is truly interested in the precious metal value, shouldn't we look for the cheapest way to acquire silver from a reputable source? For example, if you want to buy 500 ASEs from JM bullion, they will charge you about $ 36.50 per ounce. If you're willing to buy silver rounds from JM Bullion, you can buy 500 for about $ 25 each. From that perspective, even for the small retail buyer, the "disconnect" between spot and physical does not seem so great.
Lots of 'silver below spot' with Sterling Silver w/hallmarks out there.
I assume most here are buying small pieces and therefore think that any discussion about silver premiums here must realize high premiums are in effect.
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
COMEX and LBMA vault silver inventory is and has been on the decline. Much of these large bars are used for fabrication of the products we buy. While ASEs are struck on silver not from these vaults, the bleeding of the vaults is indicative of a supply problem. We all know that supply is one leg of price equilibrium and while we may not vision a direct link between that vault silver and the products we purchase I believe it safe to assume that there is an indirect link. The other effect of COMEX/LBMA physical supply issues is the impact it has on market perception and how that perception affects the silver market as a whole.
A good indicator of the cost price of silver to the small retail investor is what buyers are paying at the moment for the specific piece(s) the investor is considering. Yes, a "stacker" should be looking for the cheapest way to acquire silver, BUT he must also consider finding a buyer when it becomes time to sell. As a serious stacker there are plenty of silver products that I will not buy for that very reason. The big question is "at some time in the future when I go to resell this item will I easily find a buyer and will I be rewarded with a bigger premium or at least not a lower premium than I paid. Fortunately I so far have made the right call by limiting my purchases over the past 20 years to ASEs and RCM 10 oz. bars. Premiums for these two items are now among the highest. I have been selling off some that inventory at a nice profit and then buying more ounces of a lower premium silver that I believe will see the next jump in premium.
Those avoiding the high premium items might just find down the road that current high premiums become even higher. If that becomes the case then buying ASEs now would prove to have been the smart play. For that reason I continue to also pick up ASE tubes when I find a good (still high) price.
Bottom line: You buyer down the road is most likely going to be focusing on what he/she believes to be quality (unless premiums are very high as is now the case) because he believes his future buyer will be doing the same.
If available supply continues to decrease and demand continues to increase then all the cards are off the table and all silver product premiums will go through the roof. Perceived quality products such as ASEs however will continue to boast the highest premiums. If you look at gold premiums you do not see what silver is experiencing. Further proof that premiums are a result of dwindling available supply and increased demand for that limited available supply. A simple matter of more dollars chasing fewer items.
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
Historically silver refiners deliver silver as 1000 ounce bars or casting grain. There are a lot of 1000 ounce bars in existence.
In the physical bullion market the 1000 ounce bars or grain are re-melted and fabricated into smaller bars for sale to investors. There is no difference in the silver itself just the size of the bar/round.
For privately minted silver there seem to be two factors at play.
1) The increase in demand is exceeding the capacity of the private mints.
2) There are fewer private mints and some of the largest mints are now controlled by the same owner (same thing is happening with direct to consumer websites).
I don't believe there is a shortage of physical silver just a shortage of available capacity to convert the large bars to market acceptable sizes. If I'm right capital will be invested in capacity and premiums will eventually return to historic levels.
Just think when gutter metal hits $3 again we can rejoice about how we have a 75% premium and it's really worth $5.25 in bunker land. #winning #Apmex #ase #trinkets #Ace² RGDS!
The whole worlds off its rocker, buy Gold™.
BOOMIN!™
really bothers you that some are making so much profit on premiums alone. doesn't it?
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
If silver goes to $3, gold goes to $350.
Increase from 45% to 86% premium from May 4, 2021 to October 11, 2022? Insanity.
My US Mint Commemorative Medal Set
Nice screen shots, good documentation.
I knew it would happen.
so spot price dropped a bunch and real price went up. Gotta be gutter math.
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
Good luck finding anyone willing to pay you Apmex premiums. I mean you of all people should know because you personally have had rolls of ASEs on the BST for $100 less than the advertised APMEX premiums (delivered no less) and haven't moved any of them for months. We call that gutter dreamz. RGDS!
The whole worlds off its rocker, buy Gold™.
BOOMIN!™
>
Good thing ASEs are only a small portion of the overall gutter market. Nobody wants to provide the mint polished planchets at spot when they can stamp their own coin and sell at a slight premium. Not representative of current conditions at all. THKS!
The whole worlds off its rocker, buy Gold™.
BOOMIN!™
If APMEX was not getting their price don't you think they would lower it. While I live by the buy low, sell high golden rule, I also live by the sell lower than the competition rule.
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
One would think but then again, they sure do have a load of them available during this SUPPOSED great gutter shortage, we got whales buying 17+ million ASEs etc. :roll Good thing for Apmex they sell a zillion other trinkets in addition to ASEs.
Right on Ace. CNGRTS!
The whole worlds off its rocker, buy Gold™.
BOOMIN!™
Thanks Joker!
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
The answer to that question is the same as to this question...
Why will premiums decrease when spot increases?
Knowledge is the enemy of fear
two completely different questions.
One is happening.
The second one is an assumption that may very well not happen.
Higher premiums could easily be a paradigm shift (the new norm) and not just an anomaly.
One could argue that higher prices that are a result of actual (real) supply/demand forces indicate more buyers and/or less available supply. These are the very factors driving currently high premiums on select products. Will it spread and/or increase?
Time will tell.
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
So we are to ignore actual (real world) evidence of no to minimal demand for select products which currently have high premiums?
Also, why is it when you write something it is to be taken as fact and when others write it is assumption?
Knowledge is the enemy of fear
My speculation to explain some of the current high premium is that APMEX, and probably several other bullion dealers, still have inventory of silver they purchased with spot at say $25-27 (where it was July 2020 to April 2022) plus several more dollars an ounce to get green boxes from the Mint or other fees/premium they had to pay. To cover all costs and profit they would need to ask $35 to come out ahead.
Perhaps they have no good reason to sell at a loss now if they expect silver to go back up in the future, so why not ask $35 even when spot now dropped to $20? Sure, there will be minimal demand for their silver eagles, but some folks will eventually buy them in spite of the premium.
My US Mint Commemorative Medal Set
Bill Holter in a recent interview with Greg Hunter on USAWatchdog.com corroborates that Silver Eagles are at a 90% premium to spot, if you can find them.
I knew it would happen.
LOL maybe try ebay.com MILLIONS available.
The whole worlds off its rocker, buy Gold™.
BOOMIN!™
Mine are available at $55--a nearly 200% premium, so that proves there is high demand.
Knowledge is the enemy of fear
Never said that what I write or link to is fact. What I write is my opinion. What I link is another's opinion. Take it as you wish. Consider it more background to help shape your own opinion.
Opinions. . . everyone has one.
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
Mine are available at $55--a nearly 200% premium, so that proves there is high demand.
What it proves is that you aren't willing to sell them at a 90% premium. Your asking price won't generate a whiff of demand, at least not for awhile.
LOL maybe try ebay.com MILLIONS available.
A few have sold for less than a 90% premium, but the preponderance of sales are over a 90% premium. lol, have you counted over a million on ebay? I bet not.
I knew it would happen.
No, it proves they are in strong hands.
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
It proves that coho thinks silver is worth $55/oz.
I knew it would happen.
I would advise you to use fact to base your opinions, not others' opinions.
Forming an opinion based on others opinions, which are derived from misinformation can be dangerous to one's self. And if permeated throughout society will lead to its downfall, as we are witnessing.
You ain't prepared.
Knowledge is the enemy of fear
Available at $60 now. 220% premium. Yeah baby!!
Knowledge is the enemy of fear
I went to order eagles at AMark yesterday. Spot plus $14. Seemed too much for me to be able to retail and have any chance at a profit. The last time I purchased, they were $10.75 over spot.
But lists of people want silver rounds so I went to order another thousand or so.... that was; until I saw the delivery day is four and a half months out. Great. A lower premium to spot .... only catch is, my five figure would do better at GC, Heritage, or Stacks & Bowers.
faster delivery too.
And the 2023 eagles will be out by then. Gutter ? Get'er. I don't get the inference.
Waiting in the gutter? Waiting on the gutter. Take your pick.