How would the spot prices of gold/silver be determined without the big exchanges?

BigE

Say precious metals traders lost all respect for the futures market and Wall Street traders, how would the average Joe and coin shops coordinate spot physical prices? Could there still be 50-100.00 moves in one day?-------------BigE

roadrunner

The Comex or even LBMA aren't the only bullion exchanges operating any more. If they started to have issues the Asian exchanges might start to play a bigger role
in price determination. In the next 2-10 yrs one might expect the Asian exchanges to be on nearly equal footing with the western exchanges. The weekly and even
daily prices of coins are available via greysheet, PCGS price guide, CCE, and other sources. It wouldn't be that difficult to have another means to price gol/silver based
on bid/ask prices of a dealer network.

roadrunner

cohodk

Could there still be 50-100.00 moves in one day?

I think the spreads would be $50-100 wide.

57loaded

i am waiting for the Second Coming or Geraldo discovering a vault half full of tungsten.

that's really the only way i see this happening

OzzyAndy

As for markets in general, remember the real estate market manages to set prices without anything close to an exchange, just negotiations between buyer and seller.

derryb

Ebay

RedTiger

It would probably be similar to other commodities that lost their listings, such as chickens, which used to have futures contracts but no longer do. Spreads tend to be wider, big suppliers and big consumers have more power in setting the prices and more pull in negotiating contracts. Politics probably plays more of a role too, as political clout might break any ties.

Another place to look would be common generic coins. Spreads for generic numismatic coins tend to be wider, and liquidity lower, than currently is the case for strict metal. There isn't much of a problem in setting prices, though many players pull their bids or their asks on coins in fast markets. This would be likely for metals too, so wide volatile swings would likely be much worse, for players forced to get out. It is bad enough with big exchanges, but without them, someone that has to get out in size might have to sell for next to nothing because that is the only big bid on any online network.

derryb

With no market setting price, the governmnet would. When FDR devalued the dollar 59% he raised the price of gold from $20.67 an ounce to $35 an ounce. In 1971, President Nixon raised the price of gold to $38 an ounce, and in 1973, it was raised to $42.22 an ounce.