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"Wait Gets Longer for Bullion Coins" - Numismaster

GoldbullyGoldbully Posts: 16,823 ✭✭✭✭✭
Wait Gets Longer for Bullion Coins

By Patrick A. Heller, Market Update
September 30, 2008

In the past week, the U.S. economy has been hit with the two largest bank failures in history (Washington Mutual, Inc. and Wachovia Corporation with total combined assets in excess of $1 trillion), a collapse of efforts by the federal government to try to destroy the value of the U.S. dollar through a so-called $700 billion (which I think would actually cost at least double that amount) bailout of Wall Street firms. As I write this, the Dow Jones Industrial Average is near its lowest level in the past year, and not far from the last time it was under 10,000 on Oct. 26, 2004.

Late last week, the U.S. Mint announced that it was suspending sales of the gold one-ounce Buffalo because it had run out of inventory. This news was widely reported by the general media.

Although the Mint said it would resume sales when more coins were fabricated, the announcement added further urgency to buyers wanting to buy physical gold and silver.

Late last week and so far this week, our store and coin bullion dealers have been besieged by visitors and callers hoping to purchase gold and silver they can obtain for immediate delivery. Demand has been so strong for the past 10 weeks that virtually nothing can be picked up on a cash-and-carry basis.

When the Mint halted Buffalo sales, that shifted more demand to American Eagles. Now, American Eagles are no longer available as the Mint is unable to supply more than a minuscule quantity. South Africa Krugerrands, British sovereigns, Australia Kangaroos, China Pandas, and several other coins were already just about impossible to purchase in quantity.

Physical gold supplies are so tight that Monday afternoon a trader at A-Mark Precious Metals, Inc., a major wholesaler who is also a primary distributor for the U.S. and other mints, told my head trader that they literally had no gold available to sell and were unable to take any orders for any gold coins for future delivery.

With higher demand and lower supply, premiums have risen further on the coins that you can still obtain - if you can find them. As you would expect in such circumstances, premiums are up sharply if you can find a wholesaler or dealer to quote prices. On Monday afternoon, one major wholesaler was willing to take orders for slow delivery of American Eagles and Buffaloes at a price that was 9 percent above gold spot (compared to a normal wholesale premium around 3.75 percent).

The silver market is almost as gridlocked. On Monday afternoon, we could only locate one wholesaler willing to sell 90 percent silver coin - at a price that was 29 percent above silver value. You can purchase silver ingots for a lower price, but you will have to wait 1-3 months after making payment for the bars to be fabricated.

As a coin and bullion dealer, it is frustrating to turn away throngs of new customers coming to buy gold or silver. When the rare customer comes into our store to sell gold or silver coins or bullion, the would-be buyers in our store hang around to see if they might be able to snap up the live inventory. Unfortunately, in most instances that fresh purchase is set aside to fill earlier customer orders.

The attitude of many customers so far this week has bordered on panic - and I expect it to get worse before it gets better. About the only gold coins you can purchase for reasonably quick delivery now are Canadian Maple Leaves and Mexican 50 pesos.

In silver, U.S. 90 percent silver coin can be acquired in sizable quantities and U.S. 40 percent silver coin can be found in limited quantities. A week from now, I wouldn't be surprised if I had to report that even these coins had become almost unobtainable, no matter how high the premium a buyer is willing to pay.

I do not expect supplies of physical precious metals to become plentiful again until gold is solidly established well above $1,000 per ounce and silver at least $22 per ounce. If you want to buy physical metals at today's much lower spot prices, you are going to have to pay significant premiums and be prepared to wait for delivery.


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Comments

  • Coll3ctorColl3ctor Posts: 3,310 ✭✭✭
    Wrong forum image

    image
  • GoldbullyGoldbully Posts: 16,823 ✭✭✭✭✭


    << <i>Wrong forum image

    image >>



    Are we being a wee bit picky??

    Last time I looked, American Eagles were considered coins. image
  • adamlaneusadamlaneus Posts: 6,969 ✭✭✭
    Some folks would argue that these are not coins.

    I don't really like 'Glossary' definitions, but the PCGS glossary definition for coin does mention "circulate as money". For an ASE, that is a stretch. They sell for money; they do not circulate as money.

    I don't really care where you post it. I just thought you had a hair that needed splitting. There. Split.
  • GoldbullyGoldbully Posts: 16,823 ✭✭✭✭✭


    << <i>Some folks would argue that these are not coins.

    I don't really like 'Glossary' definitions, but the PCGS glossary definition for coin does mention "circulate as money". For an ASE, that is a stretch. They sell for money; they do not circulate as money.

    I don't really care where you post it. I just thought you had a hair that needed splitting. There. Split. >>



    I should post it in both the Coin a PM forums!!!!


    BTW, good luck splitting my hair, I'm bald up top and have a #1 buzz cut!!!
  • That comes to 15.33 each... Available for Immediate Delivery Shipped......Not a bad price IMHO

    Local B@Ms are charging more for generic rounds

    The Bullion Market is Currently Closed

    You are encouraged to complete this order and TeletradeDirect® will attempt to fulfill it on the morning of the next open market day. If new market prices make your order total less than your cart currently indicates, TeletradeDirect® will pass the savings on to you and fill your order at the reduced total. If the market changes result in your total increasing, we will contact you to make sure you still want your order. If you do not wish to pay the increased price, we will refund your deposit in full.




    Your Shopping Cart These cart prices are locked in for 7:44

    Qty Description Unit $ Ext $

    1 oz. Silver 2008 Vancouver Olympics 14.73== 220.93

    * Sales Tax is charged for orders under $1,000 shipped to
    California. All other orders are exempt from Sales Tax. Subtotal: 220.93
    Shipping: 9.75
    Tax *: 0.00
    Do you have a gift certificate or
    promo code?

    Grand Total: 230.68

  • A shameless metal pumper.
    imageimage
    Collector of Early 20th Century U.S. Coinage.
    ANA Member R-3147111
  • adamlaneusadamlaneus Posts: 6,969 ✭✭✭
    Darn California tax.

    (grumbles) Make me spend $1000 when I don't wanna.
  • halfhunterhalfhunter Posts: 2,770 ✭✭✭
    That comes to 15.33 each... Available for Immediate Delivery Shipped......Not a bad price IMHO

    Decided to add a few of these to the stack:

    Unit $ Ext $
    14.73 294.58

    1 oz. Silver 2008 Vancouver Olympics

    Amount Due
    Now: $45.84 This deposit is 15%
    of your grand total


    Subtotal: 294.58
    Shipping: 11.00
    Tax: 0.00
    Do you have a gift certificate or
    promo code?

    Grand Total: 305.58

    Thanks cinman!

    Regards, John
    Need the following OBW rolls to complete my 46-64 Roosevelt roll set:
    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!
  • Shared knowledge= wealth....image

    Wait until they get their rounds in stock. They are priced cheaper..
  • jmski52jmski52 Posts: 22,299 ✭✭✭✭✭
    the PCGS glossary definition for coin does mention "circulate as money". For an ASE, that is a stretch.

    The issuing authority issues them as coins, as enacted by Congress. Unlike the Norfed rounds, nothing prevents them from being used as legal tender in public or private transactions, although you might be considered for institutionalization if you spent your inheritance using these at face value.image
    Q: Are You Printing Money? Bernanke: Not Literally

    I knew it would happen.
  • PerryHallPerryHall Posts: 45,296 ✭✭✭✭✭


    << <i> the PCGS glossary definition for coin does mention "circulate as money". >>



    This definition is wrong. Modern commems do not "circulate as money" yet they are most certainly coins.

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

  • GoldbullyGoldbully Posts: 16,823 ✭✭✭✭✭


    << <i>

    << <i> the PCGS glossary definition for coin does mention "circulate as money". >>



    This definition is wrong. Modern commems do not "circulate as money" yet they are most certainly coins. >>



    Thanks PerryHall, I feel better now!!! image
  • mrearlygoldmrearlygold Posts: 17,858 ✭✭✭
    I'm waiting on 100 oz silver bars. A colleague sold 50K worth of silver eagles at $6.50 over spot, WHOLESALE and was paid with a wire to boot.

    On the other hand I can sell for immediate delivery gold buffalo's in ms-69 and 70 so all is not lost in zee bullion market.

    I'd LIKE to buy some circ dollars though and can't find any deals on them.
  • fishcookerfishcooker Posts: 3,446 ✭✭
    Credible article up to the part about $22 silver. Rising price will increase demand.

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