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How do the big bullion dealers handle dropping prices?

tincuptincup Posts: 4,724 ✭✭✭✭✭

The metals certainly have been taking the hit and I doubt they are finished dropping. How do the big sellers protect themselves? I notice they have having more sales on the more popular silver like the Canadian bars, etc.

I also remember Tulving... and how buyers were left empty handed when company went under. What is the likelyhood something similar may happen now with the market driving downwards?

----- kj

Comments

  • pmh1nicpmh1nic Posts: 3,117 ✭✭✭✭✭

    They only make money by buying and selling. Lower prices to sell what you have and buy cheaper.

    The longer I live the more convincing proofs I see of this truth, that God governs in the affairs of men. And if a sparrow cannot fall to the ground without His notice is it possible for an empire to rise without His aid? Benjamin Franklin
  • LukeMarshallLukeMarshall Posts: 1,883 ✭✭✭✭✭

    RobM is exactly right so the big bullion dealers have hedged themselves with inverse instruments to offset swings in underlying price of the metal, and make their money (usually) through premiums on products.

    It's all about what the people want...

  • SpoolySpooly Posts: 2,107 ✭✭✭

    Put & Call options best way to manage price risk.

    Si vis pacem, para bellum

    In God We Trust.... all others pay in Gold and Silver!
  • JWPJWP Posts: 16,592 ✭✭✭✭✭

    It is just business as normal to the big guys

    USN & USAF retired 1971-1993
    Successful Transactions with more than 100 Members

  • GoldenageGoldenage Posts: 3,278 ✭✭✭✭✭

    The rich sit and wait.

  • derrybderryb Posts: 36,033 ✭✭✭✭✭

    @RobM said:
    They hedge themselves by shorting futures contracts in the underlying metal. That way they don't lose if prices fall while they are holding inventory but also don't reap profits when prices go up. Their earnings come from the premiums they charge. If a dealer is unhedged or not adequately hedged, they are taking on more risk.

    I would think that they would prefer to put that money towards cheaper inventory. Much of what they sold last week was likely bought much cheaper than it sold for. Risk is opportunity. Hedging is missed opportunity.

    The decline from democracy to tyranny is both a natural and inevitable one.

  • WingsruleWingsrule Posts: 2,977 ✭✭✭✭

    Hedging is insurance

  • cohodkcohodk Posts: 18,512 ✭✭✭✭✭

    @Wingsrule said:
    Hedging is insurance

    I thought the gold WAS insurance? 😉

    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • derrybderryb Posts: 36,033 ✭✭✭✭✭

    @cohodk said:

    @Wingsrule said:
    Hedging is insurance

    I thought the gold WAS insurance? 😉

    hedging is betting against your bet.

    Gold IS dollar insurance.

    The decline from democracy to tyranny is both a natural and inevitable one.

  • blitzdudeblitzdude Posts: 5,303 ✭✭✭✭✭

    King dollar is the strongest asset on planet earth. RGDS!

    The whole worlds off its rocker, buy Gold™.

  • bennybravobennybravo Posts: 1,819 ✭✭✭

    @derryb said:

    I like derryb's post. If prices dip too low, you'll see the outta stock tag. Everyone here who's been in it awhile is familiar.

  • MS66MS66 Posts: 200 ✭✭✭

    @JWP said:
    It is just business as normal to the big guys

    Who let you in my basement, and with a camera yet.

    Seriously, you need real muscles for that job. And some weird sandals.

  • TwoSides2aCoinTwoSides2aCoin Posts: 43,760 ✭✭✭✭✭

    The market is open. > @blitzdude said:

    King dollar is the strongest asset on planet earth. RGDS!

    Sorry. I have to disagree with cash as an asset. Put a minus sign in front of all you have. It's a &$-"@!#%^ instrument of debt.

  • thefinnthefinn Posts: 2,652 ✭✭✭✭✭

    @MS66 said:

    @JWP said:
    It is just business as normal to the big guys

    Who let you in my basement, and with a camera yet.

    Seriously, you need real muscles for that job. And some weird sandals.

    Stainless Steel shoe covers. They probably save lots of toes.

    thefinn
  • blitzdudeblitzdude Posts: 5,303 ✭✭✭✭✭
    edited July 14, 2022 5:59PM

    @TwoSides2aCoin said:
    The market is open. > @blitzdude said:

    King dollar is the strongest asset on planet earth. RGDS!

    Sorry. I have to disagree with cash as an asset. Put a minus sign in front of all you have. It's a &$-"@!#%^ instrument of debt.

    Sorry it's not just any "cash" it's the USD. SEMPER!

    ^Disclaimer: I diversify in multiple assets just in case my compass is off......and it is rather frequently. lol

    The whole worlds off its rocker, buy Gold™.

  • JimTylerJimTyler Posts: 3,004 ✭✭✭✭✭

    It does seem (maybe I’m wrong) most say have a cash stash 3-6 months expenses.

  • tincuptincup Posts: 4,724 ✭✭✭✭✭

    The reason I brought up the question... is that even the big boys can fail when the market deteriorates. I very well remember the Tulving failure years ago, and I'm sure others can give other examples. Just like the saying... you don't own it unless you are holding it... could apply to ordering from the suppliers.

    But I have not seen any indications of slow or failures to deliver.... just wondering as so far it has been a pretty good correction in the markets.

    ----- kj
  • JimTylerJimTyler Posts: 3,004 ✭✭✭✭✭

    They handle it like this

  • TwoSides2aCoinTwoSides2aCoin Posts: 43,760 ✭✭✭✭✭

    I know a couple of them. One told me he was ready to retire 2 years ago but has sold millions more with the volatility and market swings. He is hedged. I mean he buys it at one price and sells it at another.

    If he bought 100 pounds of silver when RickO did, and am sure he did....and bought another 100 a month later .... like JPM or the BRIC nations....which they have to do to keep the power, that's what they do and how they do it.

    Remember the golden rule. He who has the gold makes the rule. He also opens and closes the floodgates with silver. ( my opinion).
    Need cash ? See your banker. How do ya think they got it all ?

  • bmhbmh Posts: 5

    @bennybravo said:

    @derryb said:

    I like derryb's post. If prices dip too low, you'll see the outta stock tag. Everyone here who's been in it awhile is familiar.

    Its a drag when you see the spot price drop, you decide to pull the trigger, and then see that notice. The markup is already way to high,and to add insult to injury they tell you basically, come back when the price is higher.

  • blitzdudeblitzdude Posts: 5,303 ✭✭✭✭✭

    @bmh said:

    @bennybravo said:

    @derryb said:

    I like derryb's post. If prices dip too low, you'll see the outta stock tag. Everyone here who's been in it awhile is familiar.

    Its a drag when you see the spot price drop, you decide to pull the trigger, and then see that notice. The markup is already way to high,and to add insult to injury they tell you basically, come back when the price is higher.

    Thank the reddit crew. Nobody ever paid these stupid premiums prior to them. It will seem almost like a crime when we are buying their PMs back well south of spot. Crazy WRLD!

    The whole worlds off its rocker, buy Gold™.

  • derrybderryb Posts: 36,033 ✭✭✭✭✭

    Thank the Reddit crew than you can sell for these high premiums. lol

    The decline from democracy to tyranny is both a natural and inevitable one.

  • dcarrdcarr Posts: 7,905 ✭✭✭✭✭

    @blitzdude said:

    @bmh said:

    @bennybravo said:

    @derryb said:

    I like derryb's post. If prices dip too low, you'll see the outta stock tag. Everyone here who's been in it awhile is familiar.

    Its a drag when you see the spot price drop, you decide to pull the trigger, and then see that notice. The markup is already way to high,and to add insult to injury they tell you basically, come back when the price is higher.

    Thank the reddit crew. Nobody ever paid these stupid premiums prior to them. It will seem almost like a crime when we are buying their PMs back well south of spot. Crazy WRLD!

    So quit whining about it already, and sell ALL of your silver to them right now. ;)

  • pmh1nicpmh1nic Posts: 3,117 ✭✭✭✭✭

    @TwoSides2aCoin said:
    The market is open. > @blitzdude said:

    King dollar is the strongest asset on planet earth. RGDS!

    Sorry. I have to disagree with cash as an asset. Put a minus sign in front of all you have. It's a &$-"@!#%^ instrument of debt.

    Unfortunately I have to disagree. Stocks down. PMs down. Bitcoin down. The dollar is up. The dollar is the best of a bad batch of fiat currencies. For how long? I've been hearing the crash is just around the corner for years.

    The longer I live the more convincing proofs I see of this truth, that God governs in the affairs of men. And if a sparrow cannot fall to the ground without His notice is it possible for an empire to rise without His aid? Benjamin Franklin
  • blitzdudeblitzdude Posts: 5,303 ✭✭✭✭✭

    @dcarr said:

    @blitzdude said:

    @bmh said:

    @bennybravo said:

    @derryb said:

    I like derryb's post. If prices dip too low, you'll see the outta stock tag. Everyone here who's been in it awhile is familiar.

    Its a drag when you see the spot price drop, you decide to pull the trigger, and then see that notice. The markup is already way to high,and to add insult to injury they tell you basically, come back when the price is higher.

    Thank the reddit crew. Nobody ever paid these stupid premiums prior to them. It will seem almost like a crime when we are buying their PMs back well south of spot. Crazy WRLD!

    So quit whining about it already, and sell ALL of your silver to them right now. ;)

    LOL, perhaps you should take your own advice......or better yet do what I told you to do 6 years ago. :sunglasses:

    The whole worlds off its rocker, buy Gold™.

  • SpoolySpooly Posts: 2,107 ✭✭✭

    As far as I can tell the bullion dealers are not lowering their prices. I’ll be waiting. I’m ready to back up the truck at the right price.

    Si vis pacem, para bellum

    In God We Trust.... all others pay in Gold and Silver!
  • PerryHallPerryHall Posts: 45,209 ✭✭✭✭✭

    @Spooly said:
    As far as I can tell the bullion dealers are not lowering their prices. I’ll be waiting. I’m ready to back up the truck at the right price.

    They're not lowering their SELLING prices but I bet they're lowering their BUYING prices. :#

    Worry is the interest you pay on a debt you may not owe.

  • dcarrdcarr Posts: 7,905 ✭✭✭✭✭

    @blitzdude said:

    @dcarr said:

    @blitzdude said:

    @bmh said:

    @bennybravo said:

    @derryb said:

    I like derryb's post. If prices dip too low, you'll see the outta stock tag. Everyone here who's been in it awhile is familiar.

    Its a drag when you see the spot price drop, you decide to pull the trigger, and then see that notice. The markup is already way to high,and to add insult to injury they tell you basically, come back when the price is higher.

    Thank the reddit crew. Nobody ever paid these stupid premiums prior to them. It will seem almost like a crime when we are buying their PMs back well south of spot. Crazy WRLD!

    So quit whining about it already, and sell ALL of your silver to them right now. ;)

    LOL, perhaps you should take your own advice......or better yet do what I told you to do 6 years ago. :sunglasses:

    I am not advising anyone (except you) to sell their silver.

    Please provide a link to the post of six years ago that you refer to.

  • 3stars3stars Posts: 2,278 ✭✭✭✭✭

    I notice that their PM spot price tickers can be a day behind when prices are dropping...

    Previous transactions: Wondercoin, goldman86, dmarks, Type2
  • TwoSides2aCoinTwoSides2aCoin Posts: 43,760 ✭✭✭✭✭
    edited July 26, 2022 7:18PM

    @pmh1nic said:

    @TwoSides2aCoin said:
    The market is open. > @blitzdude said:

    King dollar is the strongest asset on planet earth. RGDS!

    Sorry. I have to disagree with cash as an asset. Put a minus sign in front of all you have. It's a &$-"@!#%^ instrument of debt.

    Unfortunately I have to disagree. Stocks down. PMs down. Bitcoin down. The dollar is up. The dollar is the best of a bad batch of fiat currencies. For how long? I've been hearing the crash is just around the corner for years.

    It's okay to disagree, it's your cash that buys about 60% of what it purchased just a few months ago. Stack cash... it's strong. I agree.

  • pmh1nicpmh1nic Posts: 3,117 ✭✭✭✭✭

    @TwoSides2aCoin said:

    @pmh1nic said:

    @TwoSides2aCoin said:
    The market is open. > @blitzdude said:

    King dollar is the strongest asset on planet earth. RGDS!

    Sorry. I have to disagree with cash as an asset. Put a minus sign in front of all you have. It's a &$-"@!#%^ instrument of debt.

    Unfortunately I have to disagree. Stocks down. PMs down. Bitcoin down. The dollar is up. The dollar is the best of a bad batch of fiat currencies. For how long? I've been hearing the crash is just around the corner for years.

    It's okay to disagree, it's your cash that buys about 60% of what it purchased just a few months ago. Stack cash... it's strong. I agree.

    It depends on what you're looking to buy. Gold was above $2K two months ago and now is $1.75K. Silver in a similar situation. The same with the DOW and Bitcoin. Give this recession a few more months, projected layoffs, increase in housing contracts cancelled and car loan defaults, and we'll see how strong the dollar is Q3 and Q4 quarter.

    The longer I live the more convincing proofs I see of this truth, that God governs in the affairs of men. And if a sparrow cannot fall to the ground without His notice is it possible for an empire to rise without His aid? Benjamin Franklin
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