Elementary silver coin auction buying strategy question. **UPDATE in first post**- Huge waste of tim

sparky64

First post here on the PM side so be gentle.
I'm a simple type coin collector but have a question for you guys about a small town consignment auction coming up.

My question is for the bullion market today. I understand the answers may be different with silver at $10 or $50/oz.

I'll also say that it's not for a quick flip.

Say a roll of circulated 1964 Kennedy Halves (20 coins).
I go to Coinflation and it calculates $150.83 at current silver price.

What are the PM guys willing to pay?

Do you stick to the $150?
Do you insist on paying a certain percentage less or are you willing to pay a certain percentage more in anticipation of silver going up?

UPDATE:
Yea, colossal waste of time.
Roadrunner nailed it. It was an ugly feeding frenzy of about 10 guys running each other up.
Should have been a consignor.
Everything was going 2X+ what you'd expect to pay. $40 circ. Morgans, $12.50 Halves, $7 quarters, etc......

nibanny

I don't do much 90% but I would pay $165/170 now for a roll of Kennedy, based on condition. BU coins are worth more.
I think a dealer is going to offer less, probably around 15.5x face value.
Halves have usually more demand, hence higher prices, than other 90%.

MGLICKER

Welcome to the PM forum, Sparky!

Melt value would be about right for the circulated Kennedy's. Perhaps a bit less if the circulation has caused any measurable metal loss.

Have not really heard of any regular buyers paying a premium in anticipation of a price jump.

hchcoin

This is from guitarwes in another thread (one of my favorite posts):

I pm'd you this message but wanted to post here also-


When I say a buy price is "Spot X .715", I use the silver spot price posted on the kitco ticker. You asked about bid/ask price and I think there is a 10¢ spread in the bid/ask, so I don't really worry about that too much as it doesn't make much difference. You can use either one consistantly if you want when you buy or sell, doesn't matter as it's only .0715 X face value different in the long run ($7.15 per $100 face value of 90%)

If you're really confused now don't worry, a simple explaination is below. Here is the simple way to figure out what to pay if you want to buy at melt value for 90%. It's as easy as 1 -2 -3:

(1) Count the amount of face value of 90% silver you have. (i.e. $20 total face value)
(2) Multiply silver spot price X .715. (i.e. silver spot at $25 X .715 = 17.87)
(3) Multiply those 2 values together to get your buy price (i.e. $20 face value X 17.87 = $357.40)

For circulated 90% silver the "Spot X .715" multipler accounts for wear and underweight pieces. For uncirculated 90%, the actual melt value is around a "Spot X .723" multipler.

Hope I didn't mess your brain up too bad......

Steve27

Most people I know buy below spot by one point for 90% silver coins.

GOWYO

<< <i>Most people I know buy below spot by one point for 90% silver coins. >>



Where are they buying?

roadrunner

At these small town auctions is pretty common for the dealers to shill bid their stuff up or have reserves near retail or higher. On top of that you always get some fresh retail people that think this stuff is rare and
pay through the nose for it. You'd be lucky to get any 90% silver coin at .69X to .715 X spot let alone at a dealer discount. Wouldn't be surprised to see it go for 16X to 20X face. And if your state doesn't have a
sales tax exemption for bullion, add that in on top of everything. The auction house may have a buyer's fee as well (ie reduce your bids by the buyer's fee).

sparky64

Thanks everyone for the advice and comments.
I did learn some things, so now I at least have a baseline.

I'm predicting that roadrunners "some fresh retail people that think this stuff is rare and pay through the nose for it." scenario is most likely.
I've watched people pay 10X+ for 70's & 80's proof sets at these type of auctions.

I'll let you know what happens.

cohodk

Listen to roadrunner.

AcesCracked

I used to feed the small town coin consignment auctions and your problem will not be getting 16 to 18 times face. The problem is the 20 percent commission to the auctioneer.

Been there done that but good luck. IMO you would be better off selling them here.....

Tom

roadrunner

<< <i>I used to feed the small town coin consignment auctions and your problem will not be getting 16 to 18 times face. The problem is the 20 percent commission to the auctioneer.

Been there done that but good luck. IMO you would be better off selling them here.....

Tom >>



My take on the OP's situation is that he plans to be a buyer at this local auction. And in that case the dealer's commission is irrelevant as is the buyer's fee. You just bid accordingly.
On the consignment side, you'd have to be nuts to consign bullion to an auction and pay consignment fees....unless you pre-arrange with the house to net out at 95-97% of final prices realized.
Any bullionish silver that I ever won at such small auctions...was soon regretted once I got it home or tried to sell it later on. Seeing as it's just bullion you're looking to buy, you should pay just like
it was for a quick flip to limit your downside. You want to be able to get out of it at no less than 95% of what you paid the next day. There's so much silver around why pay strong at auction? My dealer
friend buys a lot of silver every month and ends up shipping most of it to the local refiner because he doesn't have ready retail outlets for the stuff. Any time I want some he just diverts it to me at the same
price the refiner would pay. Saves him from having to ship it and wait for a check.

sparky64

<< <i>My take on the OP's situation is that he plans to be a buyer at this local auction. >>


Correct.

sparky64

Edit. Double post.

secondrepublic

There are a lot of places to buy 90% and especially a roll of '64 Kennedys. Super common bullion. So if it's a good price -- at spot "all in" when you factor in all the costs -- go for it. Even a couple percent above spot is fine. But I wouldn't pay any special premium in anticipation of prices rising. You can buy it in a lot of places.