Have premiums on physical gold been changing recently?

PutTogether

I've recently read claims that premiums on physical gold have been rising.

Until earlier this year, I hadn't paid a lot of attention to physical gold prices for quite some time. I purchased some AGEs in January, and the spread was in the range of $35. That's 3%, which is as low as low as I ever remember it being. I checked again a moment ago at my usual place and there was a $34 difference between buy and sell.

Was the spread actually LOWER than that recently? Seems hard to believe, but who knows.

Spot prices are easy enough to track, but I don't know a reliable method to look up old buy/sell quotes for physical gold products, so polling the readership here seemed to make sense.

Thanks

Pokermandude

Seems to be that the premium has gone down when buying. Places/people buying at wholesale are now paying (more) back of spot, so the overall spread is about the same.

derryb

Originally posted by: Pokermandude
Seems to be that the premium has gone down when buying. Places/people buying at wholesale are now paying (more) back of spot, so the overall spread is about the same.

Premiums tend to move lower after a rise in price. In recent years (as priceds declined) higher premiums have been the result of volume sellers trying to compensate, in many cases, for selling at a lower price than they actually paid. In other words, as the profit margin grows there is room to reduce the premium.

cohodk

I thought the "increase" in premiums was due to undersupply (as I read right here in this forum). Now I hear its just the typical pump and dump scheme by volume dealers. Sheesh!!

derryb

Originally posted by: cohodk
I thought the "increase" in premiums was due to undersupply (as I read right here in this forum). Now I hear its just the typical pump and dump scheme by volume dealers. Sheesh!!

Stop thinking, you'll get hurt. Stay in the box.

PutTogether

Originally posted by: derryb

Premiums tend to move lower after a rise in price. In recent years (as priceds declined) higher premiums have been the result of volume sellers trying to compensate, in many cases, for selling at a lower price than they actually paid. In other words, as the profit margin grows there is room to reduce the premium.

You lost me, but I know you pay a lot of attention to the physical gold market, so you might be best suited to answer my question.

Buy/Sell Spread for a one ounce AGE in 2016 is $35 Below is a list of years where I remember buying gold and approximately what the spread was. Can you help me fill in the blank spots? (or correct errors I've made in my recollections)

2015: 35
2014: ?
2013: 50
2012: 50
2011: ?
2010: ? (but i feel like I remember some 70-100 premiums there for a minute)
2009: 70 or so
2008: 50-60
2007: 50-60


The $50 premiums in 2007 were obviously much larger than the $50 premiums in 2013, but if we could flesh out a list of what the spread was in nominal dollars, it is easy enough to get to a percentage basis.

I wish for the life of me I could remember what I paid for my first ounce of gold in 2003 or so. I remember spot was in the 400 range, but no idea what the spread was.

cohodk

Originally posted by: derryb

Originally posted by: cohodk
I thought the "increase" in premiums was due to undersupply (as I read right here in this forum). Now I hear its just the typical pump and dump scheme by volume dealers. Sheesh!!

Stop thinking, you'll get hurt. Stay in the box.

Yeah, stay in your box and quit calling out my contradictory comments. Lol.

Premiums are a tool of hucksters and manipulators.

derryb

Precious metal premiums are the difference between reality and fantasy. When you look closely, real gold really doesn't cost that much more than does a promise for gold. Consider premiums to continue to be a bargain.

BAJJERFAN

It might simply be that many dealers have a decent supply or not a ready enough market that they can turn them easily. APMEX is paying around $10 less than normal for 1 ounce gold AGEs.

s4ny

I remember back in Dec 1987 I had some 1986 $50 AGEs that I wanted to sell. I had purchased them
in Jan 1987 for $435 and a B&M offered me $515, a nice profit. (I wanted to buy stocks which had recently
crashed.)

I agreed to his price and said "OK, let's go to your bank and get a cashier's check for the amount."

He wanted to give me his company check, and I said I would only sell for a cashier's check from a local bank.

So, no deal.

This was in Texas. By 1993, every NYSE listed bank in TX had gone bankrupt, or had to be merged
with an out of state bank.

As an aside, I trust the CME, but I would not take a company check from
a coin shop.

TwoSides2aCoin

It's expensive making money.

BAJJERFAN

Originally posted by: TwoSides2aCoin

It's expensive making money.

And it literally takes money to make money.

Wingsrule

As part of the investment contests since the beginning of 2015, I have been tracking both the Kitco ask spot price of gold and the Apmex random year 1 oz BU AGE. Premium over the last 18 months shown below.



I realize you can often find them cheaper from local B&Ms or the occasional APMEX sale, but this is the only documentation I have.

BAJJERFAN

Originally posted by: Wingsrule

As part of the investment contests since the beginning of 2015, I have been tracking both the Kitco ask spot price of gold and the Apmex random year 1 oz BU AGE. Premium over the last 18 months shown below.



I realize you can often find them cheaper from local B&Ms or the occasional APMEX sale, but this is the only documentation I have.

What was APMEX paying over KITCO ask on those same days? Assuming you bought right, what you can get for them is just as or even more important.

topstuf

DEMAND dictates premium.



On any dump, all the sideliners rush in and try to buy because they THINK the dealer can ALWAYS replace lower if spot is lower.



Well guess what?



Just the opposite.



At major JUMPS, EVERYONE..... dealers and customers.... is trying to capture the higher price.



Vice versa on major DUMPS.



The FACTS are that at HIGH prices, product is EASY to find and at LOW prices there ain't no one (with any brains) dumping it.



Flat market tends to get SPREAD a bit closer.

BAJJERFAN

Originally posted by: topstuf

DEMAND dictates premium.



On any dump, all the sideliners rush in and try to buy because they THINK the dealer can ALWAYS replace lower if spot is lower.



Well guess what?



Just the opposite.



At major JUMPS, EVERYONE..... dealers and customers.... is trying to capture the higher price.



Vice versa on major DUMPS.



The FACTS are that at HIGH prices, product is EASY to find and at LOW prices there ain't no one (with any brains) dumping it.



Flat market tends to get SPREAD a bit closer.

IIRC years ago, Tulving would quote a sell to you price for gold that was good for 2 hours. Does this mean that he had a similar window in which to buy the gold that he committed to sell to you or buy replacement gold for that which he committed to sell to you?

topstuf

Edit: It meant that he had 2 hours to TRY to fill the order without losing his butt.







Tulving is bankrupt.



As are ALL the SOBs who try to pretend that spot is spot no matter what.



My CLOSEST call on a bad check was from a guy who....suddenly...."went bad."



Highest buy on the tape for MONTHS!



Done deals by the hundreds.



Until they weren't.



Fortunately I had presence of mind to CALL HIS BANK rather than queue up in line like the rest of the guys on the tape.



I got cleared funds TWENTY MINUTES before they froze his account.



Physical metals are not gameable.

BAJJERFAN

Originally posted by: topstuf

Edit: It meant that he had 2 hours to TRY to fill the order without losing his butt.







Tulving is bankrupt.



As are ALL the SOBs who try to pretend that spot is spot no matter what.



My CLOSEST call on a bad check was from a guy who....suddenly...."went bad."



Highest buy on the tape for MONTHS!



Done deals by the hundreds.



Until they weren't.



Fortunately I had presence of mind to CALL HIS BANK rather than queue up in line like the rest of the guys on the tape.



I got cleared funds TWENTY MINUTES before they froze his account.



Physical metals are not gameable.

I know he is BK, but he's the only place I ever saw give a quote like that. I think he was more reliable back then.

My Bro's wife is a vet and ended up with a bad check after doing emergency surgery on a dog. After a few attempts to collect, a teller telled her when the person had money in their account and to show up then. He warn't happy when he found out she finally got her money.

topstuf

"Reliability" depends on the extent of reputation and the patience of the major wholesalers.



There are always "signs" that the big guys get and....if you are fortunate....they share.

TwoSides2aCoin

It's like work in any field. Except in metal , it's heavier with thinner margins.

BAJJERFAN

Got $10 over on a couple of 1 ounce leafs a couple days ago. I doubt I could have done better anywhere else. I spose I could have put emp up here for $30 over, but by the time you ship and move money, it's easier just to take the sure thing. In hindsight, I wish I'd waited until today.