If physical silver is so scarce why are buying prices for sterling so low?

291fifth

The lack of interest in sterling has been discussed before.

It seems to me that, if there was really a shortage of physical silver that buying prices for sterling would be much higher than is currently the case.

Are local/state laws (and their related holding periods and record keeping) regarding the purchase of sterling from the public what is holding the interest in sterling down? There is plenty of sterling out there.

It seems the market has become very inefficient.

Your thoughts.

BAJJERFAN

It could be that the market is oversupplied with sterling. Also a $500 face sack of circ Walkers is a known commodity. Many people have no idea what sterling is. Would you buy 500 ounces of sterling sight unseen?

291fifth

<< <i>It could be that the market is oversupplied with sterling. Also a $500 face sack of circ Walkers is a known commodity. Many people have no idea what sterling is. Would you buy 500 ounces of sterling sight unseen? >>



If I were buying silver, which I am not, I would be buying only .999 items issued by governments or by major, well known silver companies. However, that is really not the point.

Refiners can melt the sterling, remove the copper content, and produce .999 fine silver (at least I think they can.) This would increase the physical supply of .999 silver.

pursuitofliberty

not that I know the associated costs, but the cost of acquiring, delivering, smelting and then bar production would have to out-wiegh the costs of purchase and conversions

This may not sound like much, but I would expect the energy costs are high enough, not counting any of the other factors

Unless you are buying extremely low and in very large quantity (I'm thinking by the Tonne), and have it delivered to your smelter, there is probably little profit to be made, and therefore little incentive (or opportunity)

hammered54

?? why would it be any more to refine .925 than it would be to refine .900? (coin silver) one would think it would be a better deal for the refiner.

dontippet

Don't forget, .925 is the ideal, not the norm. I have run into many "sterling" marked items that are not sterling. Each piece has to be checked, then submitted for refining. I buy 90% coins, and I buy sterling. I pay at least 20% less for sterling. In fact, if I only pay 20% less, I am a little uncomfortable about the transaction.

291fifth

What type of sterling have you run into that is less than the marked .925? Certainly not Franklin Mint, which was usually slightly overweight due to its content guarantee. Major sterling manufacturers ... I doubt it. No name sterling ... possible ... but what source?

gecko109

<< <i>?? why would it be any more to refine .925 than it would be to refine .900? (coin silver) one would think it would be a better deal for the refiner. >>





Its not any more expensive to refine .925 than it is to refine .900. However, a bag of .900 coins is in itself a recognized commodity/asset. Very little of the .900 coins you sell ever hit the melting pot......they are simply sold to someone else as a desirable commodity. I have never walked into a coin shop and asked for sterling silver flatware or serving sets. Those are NOT universally viewed as commodities. Too many unanswered questions come along with that stuff. How much filler is in the knife handles? Is the fineness really .925? Are you sure these forks arent just plated? No such questions exist with a 1962 quarter.......its standardized....its the same as all the other pre-65 quarters.


For this reason, any large dealer that buys sterling is almost sure to have to sell it to the refinery.....who also gets a cut. Thats why .900 coins bring a much better price than silverware.

dontippet

<< <i>What type of sterling have you run into that is less than the marked .925? Certainly not Franklin Mint, which was usually slightly overweight due to its content guarantee. Major sterling manufacturers ... I doubt it. No name sterling ... possible ... but what source? >>



I'm talking junk sterling jewelry for the most part. I would guess that 5-10% of the marked sterling is not silver at all that I look at. Then, even the real stuff usually melts about 2-5% less than .925.

291fifth

<< <i>

<< <i>What type of sterling have you run into that is less than the marked .925? Certainly not Franklin Mint, which was usually slightly overweight due to its content guarantee. Major sterling manufacturers ... I doubt it. No name sterling ... possible ... but what source? >>



I'm talking junk sterling jewelry for the most part. I would guess that 5-10% of the marked sterling is not silver at all that I look at. Then, even the real stuff usually melts about 2-5% less than .925. >>



It seems to me that 2-5% would be well outside any acceptable sampling error for major brands. So far as the junk silver goes ... I have no problem believing there would be "issues."

BAJJERFAN

<< <i>?? why would it be any more to refine .925 than it would be to refine .900? (coin silver) one would think it would be a better deal for the refiner. >>



90% can be melted and resold as 90% [after assay and adjustment] if it is going to be used for coinage. Why on earth would you go to the trouble of refining it only to remix them?

BAJJERFAN

BTW, does anyone know for a fact that silver metal is scarce or is that just BS?

BAJJERFAN

<< <i>The lack of interest in sterling has been discussed before.

It seems to me that, if there was really a shortage of physical silver that buying prices for sterling would be much higher than is currently the case.

Are local/state laws (and their related holding periods and record keeping) regarding the purchase of sterling from the public what is holding the interest in sterling down? There is plenty of sterling out there.

It seems the market has become very inefficient.

Your thoughts. >>



Just curious, but have you contacted ANY of the refiners for their take on the issue?

AUandAG

My last batch which was silverware and serving pieces of Sterling was assayed at .900
which I was VERY pleased with. Quite close to the .925 it is marked. Just because
it's market Sterling does not mean it is .925. Just as in counterfeiting coin there are
many instances of hedging on the silver content in Sterling. Someone will always be
around to take advantage of the masses. Oh, I should say that all my pieces were
known brands with manufacturing since 1960. No old stuff.

bob

Baley

The lack of interest in sterling has been discussed before.

Yes, ad multitudinum. Sterling is a pain in the neck, that's why it's discounted.