Why the disproportionately large premium for 90% coins?

astrorat

For fun I was comparing the current buy/sell prices for 90% from some of the larger companies, like APMEX and Pinehurst. The current premium for 90% seems to be much higher than expected for silver at the current spot.

For example, Pinehurst is currently selling $10 face 90% at 15.3 x face (spot = $16.13/oz) and when spot was near $18/oz, the price was about 14.8 x face. I see a similarly large premium elsewhere.

Is there a shortage of 90% or has there been a shift in buying/selling preferences?

bronco2078

Because its the best silver out there. Lovers of 1 oz coins with turtles , horsies, bears and what not would argue I suppose.

BAJJERFAN

<< <i>Because its the best silver out there. Lovers of 1 oz coins with turtles , horsies, bears and what not would argue I suppose. >>



At least ya don't have to put up with slicks.

OPA

It's all about demand....demand & supply, along with existing Nationwide Market Makers.

Jinx86

2 months ago most places were buying back of spot to customers for 90% now they're pay over. Just an uptick in demand. I think mostly to do with the drop in spot.

If ya really want a deal 40% is where its at.....boss was trying to tell me that. Buy it way back of spot, and if silver tanks ya always can spend it.

piecesofme

90% always has a nice premium attached to it, esp. for Halves...just make sure you get the weight right if your buyer asks you for it Sorry, couldn't resist...no it was NOT me.

Some people deal in it using the weight as the determining factor of the final value of the Lot, but I think most use face value as long as the coins overall have been described accurately.

DrBuster

This thread makes me want to work on my seated and cbh rolls that I have neglected this year, despite spot.......stupid home repairs...not stupid Aruba, ha!

MsMorrisine

Spreads on silver in general have expanded.

bronco2078

Example of the spread in action

good news there are 10 available


That listing is the result of careful market research no doubt.

Lest you scoff at that listing , that seller has managed to sell 2 ASE's for over $100 each although apparently they come with an assortment of vegetables

lions tigers and bears OH MY!!!!!

BAJJERFAN

<< <i>Because its the best silver out there. Lovers of 1 oz coins with turtles , horsies, bears and what not would argue I suppose. >>



What's so best about it? Overpaying for it is no better than overpaying for ASEs IMO. As we saw from a BST thread, it's easy to get screwed dealing with it too. Is there such a thing as certified sealed bags of the stuff?

CaptHenway

<< <i>It's all about demand....demand & supply, along with existing Nationwide Market Makers. >>



Yes, the Law Of Supply And Demand is still in effect. When spot prices fall and demand increases, the price (or in this case the premium) increases.

Inevitably some people will whine that they are not able to buy at the High Spot/Low Demand premiums during Low Spot/High Demand markets. These people flunked Economics 101.

bronco2078

<< <i>

<< <i>Because its the best silver out there. Lovers of 1 oz coins with turtles , horsies, bears and what not would argue I suppose. >>



What's so best about it? Overpaying for it is no better than overpaying for ASEs IMO. As we saw from a BST thread, it's easy to get screwed dealing with it too. Is there such a thing as certified sealed bags of the stuff? >>




I think only flippers get screwed . Slicks don't bother me , I'll stack them. I'd choose non slicks or try to get a better price if possible. With regards to the BST thread in question I would say it was a bad deal but most of the stuff on the BST is priced higher than ebay or the major dealers as it is so its all a bad deal.

ricko

As the Capt. says...supply and demand.... real basic. Cheers, RickO

CaptHenway

And there will always be a demand for 90% U.S. silver because it is difficult, and illegal in this country, to counterfeit.

Jinx86

As far as weight goes it is important to have the right weight in a bag. When we sell bags of $1000 face we do the face value, weigh it and will add slicks to get it upto weight if needed. Then the plastic bags are sealed.

I had one dealer call me up pissed that there were slicks in his bag. He apologize after we explained to him how much silver he received.

roadrunner

<< <i>And there will always be a demand for 90% U.S. silver because it is difficult, and illegal in this country, to counterfeit. >>




That's the biggie. It's also much more divisible than 1-100 oz bars and rounds. And the nostalgia of looking at 50-100 year old silver coinage that was once real money is a nice plus.

mhammerman

Common date, f to au walkers are still demanding quite a premium. Walkers contain .36 oz of pure silver which at a spot of about $15.50/oz. would give you a walker silver value of about $5.58 a coin. Common date au walkers are going to cost you $18-$20 a coin but you can probably get them in bulk for a couple of buks less a coin such as apmex getting $16-$17 a coin for a tube of au's.

So here we are with a 90% walker worth $5.58 in metal going for more than 3X the silver value...in a dead quiet pm market. The interesting note here is that you can just about buy a brand new ASE for the price of a slightly used walker. This begs the question: If the ASE is a pure bullion play then what's with the interest in old 90% at a 3x spot mark up? Is it that 90% is a more honest coin and people trust 90% more...what does that even mean? The reality that it will cost you 3x spot to get one.

Hey buddy, can you spare an au walker or two?

BAJJERFAN

<< <i>As far as weight goes it is important to have the right weight in a bag. When we sell bags of $1000 face we do the face value, weigh it and will add slicks to get it upto weight if needed. Then the plastic bags are sealed.

I had one dealer call me up pissed that there were slicks in his bag. He apologize after we explained to him how much silver he received. >>



Maybe you ought to let sKeets know about this.

gypsylea

The two places I know best have not sent any 90% out of the shop in over a year-- everything they buy is usually gone to retail buyers
in less than a day. Other stuff varies and they send out a lot of packages to wholesalers and smelters, but not 90%.

TwoSides2aCoin

This is why coin dealers drink.

TwoSides2aCoin

<< <i>This is why coin dealers drink. >>



Some 90% is better than other 90%. Just like some bars are more expensive than some saloons.


To me the question is always the same. Why ? It's difficult to answer standing here naked.

bronco2078

Circulated Morgan dollars are the stars of the whole market. You could have bought them for $25 each when silver was $30 an ounce and sell them for that now practically. An almost perfect downside hedge .

ASE's not so much Your 32$ ASE's back then will bring $18 now if you are lucky.

rawteam1

<< <i>

<< <i>Because its the best silver out there. Lovers of 1 oz coins with turtles , horsies, bears and what not would argue I suppose. >>



What's so best about it? Overpaying for it is no better than overpaying for ASEs IMO. As we saw from a BST thread, it's easy to get screwed dealing with it too. Is there such a thing as certified sealed bags of the stuff? >>


Lol, I hope u make it sooner or later, or maybe never...

Overdate

<< <i>If ya really want a deal 40% is where its at.....boss was trying to tell me that. Buy it way back of spot, and if silver tanks ya always can spend it. >>


war nickels

BAJJERFAN

<< <i>

<< <i>

<< <i>Because its the best silver out there. Lovers of 1 oz coins with turtles , horsies, bears and what not would argue I suppose. >>



What's so best about it? Overpaying for it is no better than overpaying for ASEs IMO. As we saw from a BST thread, it's easy to get screwed dealing with it too. Is there such a thing as certified sealed bags of the stuff? >>


Lol, I hope u make it sooner or later, or maybe never... >>



Just make sure that you agree on what's being bought and sold. Duh. Or that you weigh your stuff correctly.

I really don't care about 90%. At least with ASEs you can sell them one at a time if you want. Who wants to eff around selling a dollar's worth of face of worn out mercs? Not me.

To each their own.

Overdate

During the silver spike in 1980, the public was selling massive quantities of 90% silver to dealers and refiners for as much as 30% back of melt.

After silver crashed later in 1980, the public was buying back 90% silver for premiums as high as 30% above melt.

Since 1980, the price of 90% silver has oscillated between premiums to melt and discounts to melt numerous times.

BAJJERFAN

<< <i>During the silver spike in 1980, the public was selling massive quantities of 90% silver to dealers and refiners for as much as 30% back of melt.

After silver crashed later in 1980, the public was buying back 90% silver for premiums as high as 30% above melt.

Since 1980, the price of 90% silver has oscillated between premiums to melt and discounts to melt numerous times. >>



So what was the rationale behind Congress authorizing the minting of silver eagles starting in 1986? Too much government silver in storage?

rawteam1

<< <i>So what was the rationale behind Congress authorizing the minting of silver eagles starting in 1986? Too much government silver in storage? >>


Lol, cmon Bucky,... seigniorage...
I know u have to look it up...
and that's 1 reason y understanding should come before investing...

MsMorrisine

I don't think seigniorage is the right term here.

It's more like converting silver value to cash in the Treasury (which eventually ended when the silver was fully sold... No foresight to keep some to continue the program with a working stock)


I think the $1 face value was probably intentional so the gov would never have to worry about it being used as a coin at face

I note many new public laws creating PM coins have them selling for metal price + face + cetera.

Maybe some in the government really don't think gold is money if they worry about recouping face on it.

rawteam1

Semantics maybe but in the end it's all about profit ...lol...

Overdate

<< <i>So what was the rationale behind Congress authorizing the minting of silver eagles starting in 1986? Too much government silver in storage? >>


I think the rationale was to compete with other countries that had begun issuing one-ounce and fractional-ounce bullion gold and silver coins. It was partly an issue of national pride, and partly to make money by selling the coins to authorized dealers at a price above bullion value.

CaptHenway

<< <i>

<< <i>During the silver spike in 1980, the public was selling massive quantities of 90% silver to dealers and refiners for as much as 30% back of melt.

After silver crashed later in 1980, the public was buying back 90% silver for premiums as high as 30% above melt.

Since 1980, the price of 90% silver has oscillated between premiums to melt and discounts to melt numerous times. >>



So what was the rationale behind Congress authorizing the minting of silver eagles starting in 1986? Too much government silver in storage? >>



As I recall, the primary goal was to come up with a set of gold bullion coin to replace the Krugerrand, which Congress had just banned the importation of because of Apartheid. THat is one reason why the American Eagles have virtually the same specifications as the Krugerrands, other than the silver in the alloy to lighten the color. The silver eagles were an afterthought.

They all had low face values so that they would never be used as currency. They weren't even proportional. The ounce is $50, while the quarter ounce is $10. However, the face value made them legal tender coins with the counterfeit protection thereof.

BAJJERFAN

<< <i>I don't think seigniorage is the right term here.

It's more like converting silver value to cash in the Treasury (which eventually ended when the silver was fully sold... No foresight to keep some to continue the program with a working stock)


I think the $1 face value was probably intentional so the gov would never have to worry about it being used as a coin at face

I note many new public laws creating PM coins have them selling for metal price + face + cetera.

Maybe some in the government really don't think gold is money if they worry about recouping face on it. >>



We've never had a silver coin with more than $1 face value that I'm aware of. had a long string of silver dollars tho. Also $1 FV pretty much assures [but doesn't guarantee] that the metal value will never be less than FV.

BAJJERFAN

<< <i>

<< <i>So what was the rationale behind Congress authorizing the minting of silver eagles starting in 1986? Too much government silver in storage? >>


I think the rationale was to compete with other countries that had begun issuing one-ounce and fractional-ounce bullion gold and silver coins. It was partly an issue of national pride, and partly to make money by selling the coins to authorized dealers at a price above bullion value. >>



Prior to that time [and I wasn't paying attention to PMs then] one could buy silver, gold, etc. as bars and as I recall if you had a 100 ounce bar, it pretty much had to be assayed/re-assayed whenever it changed hands. Selling the eagles made it convenient for the public to own gold, silver without worry that it was substandard.

derryb

<< So what was the rationale behind Congress authorizing the minting of silver eagles starting in 1986? Too much government silver in storage? >>

to convert the bulging national defense silver stockpile into other needed metals and to give Americans a way to buy bullion whose content, weight, and purity were certified.

OPA

<< <i><< So what was the rationale behind Congress authorizing the minting of silver eagles starting in 1986? Too much government silver in storage? >>

to convert the bulging national defense silver stockpile into other needed metals and to give Americans a way to buy bullion whose content, weight, and purity were certified. >>



exactly...yes to both posters.

National Defense stockpile had 139.5 million ounces in 1985, after which it declined each year until 2002 when it was all used up (the silver was sold to the Treasury for making Silver Eagles).

bronco2078

There were a few decent members of congress that might have been looking out for We the People. Some of the rest occasionally accidentally do things that benefit us