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Will the high premium on silver bars last?

mashmash Posts: 207 ✭✭✭
in Precious Metals
I'm talking about 1 oz rounds, 5 oz bars, 10 oz bars

Will the 100% premium last long?
Buying uncut sheets and 1914 stars! message me

Comments

  • fcfc Posts: 12,793 ✭✭✭


    << <i>I'm talking about 1 oz rounds, 5 oz bars, 10 oz bars

    Will the 100% premium last long? >>



    I am guessing a few months more if the spot price stays stable.
    What will more then likely happen is that silver will go up around
    10-11 stable.. and bars will go down in premium by a few bucks..
    and they will meet in the middle.
  • ProofCollectionProofCollection Posts: 6,246 ✭✭✭✭✭
    My guess is that premiums will taper as silver recovers to $15+ spot over the next few months.
  • storm888storm888 Posts: 11,701 ✭✭✭
    "Will the high premium on silver bars last?"

    ///////////////////

    No.
    Folks Who Bite Get Bitten. Folks Who Don't Bite Get Eaten.
  • DeadhorseDeadhorse Posts: 3,720 ✭
    It's going to last a lot longer than some of you guys seem to think.

    No matter where the spot price goes, it will never return to what it once was.
    "Lenin is certainly right. There is no subtler or more severe means of overturning the existing basis of society(destroy capitalism) than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and it does it in a manner which not one man in a million is able to diagnose."
    John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
  • SilverBaronSilverBaron Posts: 767 ✭
    I believe that both FC and Deadhorse are correct.....

    As spot moves backup, dealers will not feel that they have to charge

    as much premium to "break even" with the silver they bought in the teens.

    ........BUTTTTT.......

    Now that they know that folks will pay well over spot.......

    why work on 50 cents an oz.?


    Keep on stack'n!
    Silver Baron
    ********************
    Silver is the mortar that binds the bricks of loyalty.
  • OPAOPA Posts: 17,124 ✭✭✭✭✭


    << <i>

    << <i>I'm talking about 1 oz rounds, 5 oz bars, 10 oz bars

    Will the 100% premium last long? >>



    I am guessing a few months more if the spot price stays stable.
    What will more then likely happen is that silver will go up around
    10-11 stable.. and bars will go down in premium by a few bucks..
    and they will meet in the middle. >>



    image

    "Bongo drive 1984 Lincoln that looks like old coin dug from ground."
  • cohodkcohodk Posts: 19,185 ✭✭✭✭✭
    No. Eventually, and I dont know how long, the physical price and paper price will be very close to the same, whether that be at a higher or lower price.


    Edited to add...I believe that in the 1980 runup the price of physical actually traded at a discount to paper as the move was so fast that the smelters were behind and didnt pay up. Also dealers were leery of the rally and made offers to buy at greater than usual discounts.
    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • jfoot13jfoot13 Posts: 2,669 ✭✭✭
    The premium will last as long as long as people will pay it.... would you rather have a whole new set of goverment regulations making it illegal to sell PMs at over x% or X$ over the spot price
    If you can't swim you better stay in the boat.......
  • DeadhorseDeadhorse Posts: 3,720 ✭


    << <i>
    Edited to add...I believe that in the 1980 runup the price of physical actually traded at a discount to paper as the move was so fast that the smelters were behind and didnt pay up. Also dealers were leery of the rally and made offers to buy at greater than usual discounts. >>




    Thre is some truth to this, but it wasn't universal.

    Some smelters were behind, but not by more than a few days.

    Dealers were also somewhat leery near the high, again it depended on the dealer.

    Prices varied widely due to this.

    If one shopped around properly, you could get 34X face on 90% coins, $35 for any Silver Dollar, $48-49 on .999 and various prices on jewelry, flatware, tea sets, etc.
    "Lenin is certainly right. There is no subtler or more severe means of overturning the existing basis of society(destroy capitalism) than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and it does it in a manner which not one man in a million is able to diagnose."
    John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
  • MoneyLAMoneyLA Posts: 1,825 ✭
    the premium is a factor of demand, supply, and competition.

    demand: as long as buyers keep paying it, there is less reason to lower the premium

    supply: once the fabricators have made more of the smaller coins and wafers and bars, premiums will drop

    competition: again, once the fabricators have made more of the smaller coins and wafers and bars, premiums will drop

    the premiums will evaporate quickly, because premiums are artificial, with no relationship to the price of the metal
    Cheers, Alan Mendelson
    www.AlanBestBuys.com
    www.VegasBestBuys.com
  • DeadhorseDeadhorse Posts: 3,720 ✭


    << <i>the premium is a factor of demand, supply, and competition.

    demand: as long as buyers keep paying it, there is less reason to lower the premium

    supply: once the fabricators have made more of the smaller coins and wafers and bars, premiums will drop

    competition: again, once the fabricators have made more of the smaller coins and wafers and bars, premiums will drop

    the premiums will evaporate quickly, because premiums are artificial, with no relationship to the price of the metal >>




    Well, the paper/SLV/spot price is artificial, with no relationship to the price of the metal.

    I don't think we are going to see a large increase in smaller sizes for investors. It will continue to be hard to find.

    The 1000 ounce bars one hears of are already called for, most have been leased several times already.

    Industry will get first option on most newer silver produced. They will pay whatever they have to.

    We are in a new paradigm, even if it was caused by JPM shorting 20% of the world's supply on paper.
    "Lenin is certainly right. There is no subtler or more severe means of overturning the existing basis of society(destroy capitalism) than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and it does it in a manner which not one man in a million is able to diagnose."
    John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
  • MoneyLAMoneyLA Posts: 1,825 ✭
    Most of the big bullion dealers are telling their clients that the smaller silver pieces and bars and rounds will be available in "12 weeks." that tells me that they know something about what the fabricators are doing. and that in 12 weeks the new supplies will be availalbe. its also what some dealers are telling me directly.

    lets check back in January and see what the premium is then.

    right now, I consider it to be a "shortage premium."
    Cheers, Alan Mendelson
    www.AlanBestBuys.com
    www.VegasBestBuys.com
  • ProofCollectionProofCollection Posts: 6,246 ✭✭✭✭✭


    << <i>Most of the big bullion dealers are telling their clients that the smaller silver pieces and bars and rounds will be available in "12 weeks." that tells me that they know something about what the fabricators are doing. and that in 12 weeks the new supplies will be availalbe. its also what some dealers are telling me directly.

    lets check back in January and see what the premium is then.

    right now, I consider it to be a "shortage premium." >>



    Perhaps in 12 weeks they also expect the spot price to be much higher in order to make production more profitable.

    Of course, some dealers like APMEX are selling out their future deliveries 8 weeks in advance.
  • DeadhorseDeadhorse Posts: 3,720 ✭


    << <i>lets check back in January and see what the premium is then.

    right now, I consider it to be a "shortage premium." >>



    I'll be here in January, I don't think we will see much of a change by then other than a higher price across the board.

    I agree it's a shortage problem, but I think we have different views on the definition of "shortage".
    "Lenin is certainly right. There is no subtler or more severe means of overturning the existing basis of society(destroy capitalism) than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and it does it in a manner which not one man in a million is able to diagnose."
    John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
  • percybpercyb Posts: 3,328 ✭✭✭✭
    Nope. The premium comes from the volatile stock and bond markets. Once they settle down, the premium on those bars will collapse.
    "Poets are the unacknowledged legislators of the world." PBShelley
  • DeadhorseDeadhorse Posts: 3,720 ✭


    << <i>Nope. The premium comes from the volatile stock and bond markets. Once they settle down, the premium on those bars will collapse. >>



    I have to respectfully disagree.
    "Lenin is certainly right. There is no subtler or more severe means of overturning the existing basis of society(destroy capitalism) than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and it does it in a manner which not one man in a million is able to diagnose."
    John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
  • ProofCollectionProofCollection Posts: 6,246 ✭✭✭✭✭
    I disagree as well. The premium comes from sellers who realize that all of their silver keeps selling instantly at $x premium, so they raise the premium until they reach the highest price people are willing to pay.
  • boatbldrboatbldr Posts: 211 ✭
    Premium,schemium. What if I knew of a place to get it at Kitco "ask" price, should I buy?
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