If gold and silver go back up to 950/14 will premiums drop in your opinion?
fc
Posts: 12,793 ✭✭✭
If gold and silver go back up to 950/14 will premiums drop in your opinion?
It was oft mentioned that since gold and silver took a tumble that the real world
price for an oz of each was often much more then the spot price.
If gold and silver go back up to a price we were used to 6 months ago.. will the
current premiums start to narrow or will bullion dealers continue to keep them
stable as spot goes up?
Something tells me that they will not shrink. If silver is 14... maples for example
will be 19-21.
In that type of environment I cannot imagine I would be buying much metal at higher spot
prices. It is one thing to pay a stiff premium as the metals fell... it is totally another thing
to have to pay a stiff premium as they rise. Will bullion dealers want it both ways?
your thoughts?
edited to add: i am not bullish right now. i am just chuckling at the current prices i see at
bullion websites. 15.15 at teletrade for one maple which is a 4.50 premium and they tend
to be the lowest online seller of them. apmex is at 16.70. Stiff premiums eh? If PMs continue
to go up.. premiums will basically be insane unless they change soon. What was once
expensive but bearable due to low spot silver prices... is now really expensive and no way
to justify buying it.
It was oft mentioned that since gold and silver took a tumble that the real world
price for an oz of each was often much more then the spot price.
If gold and silver go back up to a price we were used to 6 months ago.. will the
current premiums start to narrow or will bullion dealers continue to keep them
stable as spot goes up?
Something tells me that they will not shrink. If silver is 14... maples for example
will be 19-21.
In that type of environment I cannot imagine I would be buying much metal at higher spot
prices. It is one thing to pay a stiff premium as the metals fell... it is totally another thing
to have to pay a stiff premium as they rise. Will bullion dealers want it both ways?
your thoughts?
edited to add: i am not bullish right now. i am just chuckling at the current prices i see at
bullion websites. 15.15 at teletrade for one maple which is a 4.50 premium and they tend
to be the lowest online seller of them. apmex is at 16.70. Stiff premiums eh? If PMs continue
to go up.. premiums will basically be insane unless they change soon. What was once
expensive but bearable due to low spot silver prices... is now really expensive and no way
to justify buying it.
0
Comments
I ordered SAEs at 1.79 over spot, I don't think we'll ever see that margin again
Interesting question in light of the fact that all the 750 and under short paper was destroyed this morning. Prices may be more in line with long bettors and it would seem to follow that the paper boys won't be skewing the numbers as bad. Point being that the premiums should subside considerably but then you have the availability issue but that's kind of a non-issue because the bigger prices will let folk liquidate the stash a little so there should be plenty available at +850 same for white metal at 11 or so.
Hummmmmm...I'm thinking that this could be a nice little Christmas shopping bonus for us accumulators; let a few go back into the great continuum. Oh yes, Santa, Dear Santa...I wanna '53 assay piece, just like a 45 or so, pleeezzze.
Due to the demand shown on ebay as well as the "main" web sellers....
1 oz gold at spot + $12 or silver at spot + .25 - + .75 is only going to be had
from small dealers that can not tie up the cash and need the quick sale.
Keep on Stack'n!!
********************
Silver is the mortar that binds the bricks of loyalty.
<< <i>do you really want me to link all the newsletters for you that say it's going to $50,000Au and $500Ag???
well at those prices I would be all over it. ;-)
a few dollar premium is hardly significant!
i am just waiting to see silver at 11 and online bullion dealers wanting 17+ an ounce
for a single maple round. even the generic bars will be 15...
to make a nice profit a buyer will have to assume silver will be 20+ in a reasonable amount
of time.
i clearly remember paying 1 dollar over spot for nice bars several months ago. will it return with silver at 14?
i doubt it. dealers will soak the average buyer to the max!
if it does return i would be a buyer at those levels also.
after all, 14 spot plus a one dollar premium or so represents cheaper silver then what is currently
being offered with a lower spot price!!!
I knew it would happen.
roadrunner
premiums on silver and gold have nothing to do with the "paper price" of silver and gold.
the paper price is always the paper price.
the same is true with numismatic gold and silver. A 1932 Washington quarter will always have a premium above any 90% silver Washington quarter. That premium is a factor of the demand for the quarter. The premium does not vary with the price of silver, though the "silver basis" of the quarter will vary with the price of the silver.
www.AlanBestBuys.com
www.VegasBestBuys.com
the paper price is always the paper price.
Sure they do. What we are talking about is the premium that physical gets to paper price. And as say silver spot (paper) rises, that premium will shrink quite a bit, even if supplies don't readily open up. But we know that as paper price increases, the supply of silver for sale will increase...this shrinking metal premiums to paper. At $20 silver, I don't expect any real premium to paper unless the world finds out that silver is in fact in a shortage situation. Barring that, premiums have to shrink as paper prices rise.
roadrunner
after reading your whole post (sorry)...
...if there is faith in the Comex premiums will diminish....if it appears that Comex is becomming a manipulated sham, then, obviously widen.
IMHO
<< <i>fc
after reading your whole post (sorry)...
...if there is faith in the Comex premiums will diminish....if it appears that Comex is becomming a manipulated sham, then, obviously widen.
IMHO >>
I'm fairly confident that the COMEX is a manipulated sham.
Premiums may drop, but regardless of supply, they will remain higher than we were once used to.
There will always be an exception to the rule here and there, but for the most part, we are going to continue to see premiums higher than they used to be back in them good old days.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
So the question is, will PM's fly off the shelves at spot $950/14 + current premiums?
I reason that PMs are flying off the shelf now because
a) the public sees the PMs at the current price (with premium) as a good deal - confident that prices will not go significantly lower
b) the public has a great desire to own PMs for whatever their reasons are regardless of the price (obviously confident that the price will maintain or increase)
With that reasoning and the current economic conditions continuing, I see that premiums will NOT be lowering much if at all because I think that the above two reasons will remain valid with prices at $950/14.