Paper Prices are Down, But Physical prices seem to be getting Higher
Smittys
Posts: 9,876 ✭✭✭✭✭
On Silver at least
Seems like the margins grow bigger anytime price falls on paper
Seems like the margins grow bigger anytime price falls on paper
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I think that the problem is 3 fold....
1] Lack of customer walk-ins selling any real quantity.
2] Dealers are into their present stock so much higher.
3] Across much of the country, there are so few PHYSICAL dealers left....
mail order / the bay is the only place to get silver.
Keep on stacking!
********************
Silver is the mortar that binds the bricks of loyalty.
Knowledge is the enemy of fear
Your answer would be yes.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
Just wondering as it doesnt seem physical prices are diverging higher for someone buying hundreds or thousands of ounces. Just the guy wanting to buy a few ounces are paying high premiums.
So I guess to ask another way, is there increasing demand from the real players, or just the guy looking to buy 20 oz.?
Knowledge is the enemy of fear
<< <i>So many dealers are into their silver so high that if spot fell to $7 they would still ask $16 oz.
I think that the problem is 3 fold....
1] Lack of customer walk-ins selling any real quantity.
2] Dealers are into their present stock so much higher.
3] Across much of the country, there are so few PHYSICAL dealers left....
mail order / the bay is the only place to get silver.
Keep on stacking! >>
Ohhh those evil dealers, asking so much money for their silver. People are willingly paying that much for silver, dealers are not forcing people to buy at those levels. If you think you can get physical silver at spot keep dreaming. Just walk away from those evil dealers and don't buy their silver. There are plenty of other people who want it and will pay the real market price for it.
<< <i>Thanks.
Just wondering as it doesnt seem physical prices are diverging higher for someone buying hundreds or thousands of ounces. Just the guy wanting to buy a few ounces are paying high premiums.
So I guess to ask another way, is there increasing demand from the real players, or just the guy looking to buy 20 oz.? >>
From both. It seems there is an increasing number of the smaller buyers also.
Wholesalers are having trouble filling larger orders, so it's not as available.
That has increased demand for larger orders, simply because it takes more time to fill each one and there is a now a backlog.
Premiums are a bit larger than they used to be for a 2500 ounce order.
It's trickled down to the smaller buyers as well with these high premiums.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
<< <i>I call one big wholesaler today with good posted prices, however they said 12 - 14 weeks for delivery >>
So this tells me that the premium is due to lack of inventory for immediate delivery, rather than an actual shortage, no?
Knowledge is the enemy of fear
<< <i>
<< <i>I call one big wholesaler today with good posted prices, however they said 12 - 14 weeks for delivery >>
So this tells me that the premium is due to lack of inventory for immediate delivery, rather than an actual shortage, no? >>
When EVERYONE has a lack of inventory for immediate delivery, what is the difference between that and an actual shortage? And I mean this question with no ill will, I am curious what the difference would be...
When silver was 16.00 or higher recently my BOM had large supplies of silver eagles barely over spot, now that spot silver is much cheaper it can only be had in smaller quantities and at ridiculous premiums, that many PM bugs will glady pay because it protects there wealth and savings.....? I have no doubt that the difficulty in getting physical silver is real, but I think it's because retail demand is still strong but the supply is being artificially squeezed and margins are being expanded, which is a lousy deal for the buyer, imho.
BTW, went to Gainsville this weekend to watch my Gators LOOSE
Stopped by a small coin & jewelry shop before the game. They had SAEs for $20 & 90% at 11.6. No Bars & no gold.
Regards, John
1947-P & D; 1948-D; 1949-P & S; 1950-D & S; and 1952-S.
Any help locating any of these OBW rolls would be gratefully appreciated!
If the dealer "needs" to move the supply for needed cash flow...well...that's one thing...
But if they are holding the supply and do not wish to sell at someone else's price...they don't have to...
...and if the buyer doesn't like the asking price, no one is twisting their arm to pay it...
I'm sitting on a nice stash of silver right now...and there is NO WAY I'm selling at today's spot prices... if a special need came up and I had no other alternative, I might breakdown and sell... otherwise, I am content to "ride it out" until the fair market value matches reality...
...and paper trading is NOT reality... it is a concocted manipulatory con game... no matter how some economists want to pretty it up with fancy talk...
Soooo what would be your sell price? . . . Not trying to get into your business but just trying to get a handle on REAL value of physical Ag now. Do the e-Bay sales pretty much mirror the retail market?
Regards, John
1947-P & D; 1948-D; 1949-P & S; 1950-D & S; and 1952-S.
Any help locating any of these OBW rolls would be gratefully appreciated!
<< <i>I'm sitting on a nice stash of silver right now...and there is NO WAY I'm selling at today's spot prices... if a special need came up and I had no other alternative, I might breakdown and sell... otherwise, I am content to "ride it out" until the fair market value matches reality...
Soooo what would be your sell price? . . . Not trying to get into your business but just trying to get a handle on REAL value of physical Ag now. Do the e-Bay sales pretty much mirror the retail market?
Regards, John >>
I sell ASE rolls at 350.00 which is high, but better than ebay
The dearth of low margin sellers is either a conspiracy, or it's the market talking. Since the high premiums are across-the-board and involves *all sellers*, it has to be considered that the physical price (plus the premium) is the reality of what the market is willing to pay.
The alternative is to buy a 1000 oz. bar and to take delivery of it. The disparity between the spot price and the physical price will bring in more private minters who will break the 1000 oz. bars into 100 oz. castings and 1 oz. pieces, in return for a small profit. It's happening already.
As private investor demand siphons off supply, the spot price will continue to rise and the premium for smaller sized bars and rounds will shrink. Nothing is instantaneous when it takes time and capital to enter the market for investment silver, but the market will eventually equilibrate.
I knew it would happen.
One way to assess the change in paper pricing from $21 in March to the current $12 price is to look what has transpired. In March, we had the first bank fail in what was otherwise not considered a tough economic climate. We are literally TRILLIONS of miles away from that point today. And with all that, silver and gold are much lower? It makes no sense considering both are in various ways, money substitutes, esp. gold.
roadrunner
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<< <i>
<< <i>I call one big wholesaler today with good posted prices, however they said 12 - 14 weeks for delivery >>
So this tells me that the premium is due to lack of inventory for immediate delivery, rather than an actual shortage, no? >>
When EVERYONE has a lack of inventory for immediate delivery, what is the difference between that and an actual shortage? And I mean this question with no ill will, I am curious what the difference would be... >>
I think the difference is that there is currently a "buy at any price" mentality--usually the little guy--when the real players are more patient.
I just checked tulving and they show 200- 1000oz bars available. Granted its only $2.5 million dollars worth, which a real player in PMs would grab in a heartbeat if they thought it necessary. So again it seems to me to be a sort of "panic" buying spree by the little guy.
Knowledge is the enemy of fear
I often ask myself this same question when a stock doesnt do as I expect. No matter how many times I redo my work, I can never find the answer. Usually that means that my work is wrong, I have either under or overestimated a variable. Sometimes time corrects this problem, sometimes it does not.
From a technical viewpoint, both silver and gold rallied back to broken uptrendlines and are now retracing. Emotion plays a huge role in PMs and that cannot be accurately measured, so best bet is just to use technicals. Charts have no emotion.
Knowledge is the enemy of fear
<< <i>
<< <i>
<< <i>
<< <i>I call one big wholesaler today with good posted prices, however they said 12 - 14 weeks for delivery >>
So this tells me that the premium is due to lack of inventory for immediate delivery, rather than an actual shortage, no? >>
When EVERYONE has a lack of inventory for immediate delivery, what is the difference between that and an actual shortage? And I mean this question with no ill will, I am curious what the difference would be... >>
I think the difference is that there is currently a "buy at any price" mentality--usually the little guy--when the real players are more patient.
I just checked tulving and they show 200- 1000oz bars available. Granted its only $2.5 million dollars worth, which a real player in PMs would grab in a heartbeat if they thought it necessary. So again it seems to me to be a sort of "panic" buying spree by the little guy. >>
maybe if you say it instead of me folks will actually agree with your
thoughts.
i got tired of saying that last week or so. repeating myself is so dull.
<< <i>but if enough little guys, that out number the big ones 10,000 to 1, buy a couple thousand dollars of pm's each, there goes 20 million worth. >>
so there is an opportunity! buy those large bars and cast smaller ones. become a private mint. most are long gone and i have not seen
any new ones appear since i became a coin collector/bullion buyer
a few years ago.
the trouble is, no one wishes to do that quite yet. soo smaller bars
will be troublesome to aquire for a while yet.
they may not, but they sure bring out my emotions sometimes
.
Today we had a fellow dealer call who was desperate to fill an order. He paid us $1700 per bag OVER MELT VALUE for six bags.
.
THAT, my friends, is a shortage of product. Anybody who says there is not a shortage of product is mistaken.
.
TD
A 1,000 bar that is sold now but not delivered for 12 to 14 weeks appears to indicate a shortage of larger quantities, or am I missing something. Surely they don't have so many orders that it takes their shipping department that long to catch up. I think you can expect the spread on these to grow as it gets more and more difficult to fill orders.
Charts? What charts? I only buy and sell on emotion. When I watch the news, I get mad. Then I buy. Then the market drops by 50% and I get scared. Then I buy some more. When the rush to hard assets makes the front cover of Time, I'll probably sell half.
I knew it would happen.
<< <i>Here's a reality check for you all to consider. The other day we bought in 12 bags of 90% silver. Sold a few bags to people who had been on waiting lists for product, and just sat on the rest.
.
Today we had a fellow dealer call who was desperate to fill an order. He paid us $1700 per bag OVER MELT VALUE for six bags.
.
THAT, my friends, is a shortage of product. Anybody who says there is not a shortage of product is mistaken.
.
TD >>
Is the guy looking for 90% or for silver? If he wanted silver he could have just bought 7000 oz from tulving for $490 per 1000 oz over spot. So is it a shortage of silver or 90%? A shortage of small lots or large?
Knowledge is the enemy of fear
newspaper headlines during the 2000/2001 peak in the dow, hearalding the new paridigm in the bull, this time its different, etc, etc.