Silver prices, insane mark ups on small quantities?

[Member 34319]

What's going on with silver coins? I'm seeing premiums all over most places at up to 30% per 1 ounce.

Am I missing something here? Last I purchased the mark ups on coins was never that high.

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[gryghin]

Time to sell?

Seriously though, I think metals go up when inflation goes up.

 

[Member 34319]

Time to sell?

Seriously though, I think metals go up when inflation goes up.

Could you sell above spot? Most folks seem to think spot is the price, but if the retailers are selling at 30% over spot, makes me curious what I should be asking.

 

[Alexx1401]

Could you sell above spot? Most folks seem to think spot is the price, but if the retailers are selling at 30% over spot, makes me curious what I should be asking.

Does anyone sell silver at spot price?
If they do how do they make any money? I started buying silver while back. Every so often the one place sends me a deal where they are selling some kind of rounds at a few bucks over spot and I will buy another $500 or so. They will buy back at spot. If anyone sold for the same price they buy not sure how they could stay open??

 

[Member 34319]

Does anyone sell silver at spot price?
If they do how do they make any money?

Yes, or at least I did before. IE when it was $10 an ounce (2008ish), then goes to $35 (2012ish) an ounce. It was usually easier to sell at or close to spot to offload when it was high.

Now it's not really fluctuating as badly as it did and most places are selling lower quantities at pretty high mark ups.

The market git kind of weird.

 

[Alexx1401]

Yes, or at least I did before. IE when it was $10 an ounce (2008ish), then goes to $35 (2012ish) an ounce. It was usually easier to sell at or close to spot to offload when it was high.

Now it's not really fluctuating as badly as it did and most places are selling lower quantities at pretty high mark ups.

The market git kind of weird.

I can find plenty of places around me wanting to buy at spot. Just never seen one willing to sell at the same price they buy. If they did how would they keep the place open???

 

[Listeroid one]

Hi Reno; I have heard recently that actual price is way above spot. Last time I purchased larger 100 oz bars I paid only .25 cents above spot. Been a few years though. There are some good local shops that might treat you well. My guy passed away and his shop got sold and I no longer do business with them. You might try Miles Franklin. They are in Minnesota. If you want better pricing on 1 oz. look at silver rounds and don't let anyone sell you silver with numismatic markups. You probably know all of this. Tempting to purchase from retail sellers but you need to do it at a very safe place and they never know who you are. A lot is going to depend on the quantity that you are after. The bad news about silver is that when your metal goes way up, eveything else your are invested in will be tanking. Ain't life grand? On a positive note, We're going to the range tomorrow! If you find some deals, share it back here. I guess you are in Nevada?

 

[mrblond]

silver has been all over the last year or so so dealers who bought higher need to cover the loss in profit. and also

Former J.P. Morgan Traders Convicted of Fraud, Attempted Price Manipulation, and Spoofing in a Multi-Year Market Manipulation Scheme

A federal jury in the Northern District of Illinois convicted two former precious metals traders at JPMorgan Chase & Co. (JPMorgan) today of fraud, attempted price manipulation, and spoofing in a multi-year market manipulation scheme of precious metals futures contracts that spanned over eight...

www.justice.gov

 

[Alexx1401]

silver has been all over the last year or so so dealers who bought higher need to cover the loss in profit. and also

Former J.P. Morgan Traders Convicted of Fraud, Attempted Price Manipulation, and Spoofing in a Multi-Year Market Manipulation Scheme

A federal jury in the Northern District of Illinois convicted two former precious metals traders at JPMorgan Chase & Co. (JPMorgan) today of fraud, attempted price manipulation, and spoofing in a multi-year market manipulation scheme of precious metals futures contracts that spanned over eight...

www.justice.gov

Damn! I had never paid much attention to the "paper" trading of this stuff but had often wondered about just this kind of thing. Sounds like the Fed's wanted to make an example of these guys to warn others who were tempted to play the same game.

 

[Cavedweller]

What's going on with silver coins? I'm seeing premiums all over most places at up to 30% per 1 ounce.

Am I missing something here? Last I purchased the mark ups on coins was never that high.

The spot price of silver only applies to paper contracts. The fact is the physical metal is in short supply, and if you want it you have to pay a high premium over spot.

The metals markets right now defy logic. In an inflationary environment, you would expect precious metals to increase in price. Yet they have been declining even as .gov debases the fiat currency. Partly because rising interest rates make it more expensive for speculators to hold the metal with borrowed money.

Market manipulation? Maybe. Buyers and sellers of futures contracts seem to determine the spot price, not actual supply and demand of the physical commodity.

But, the long and short of it is that the "real" price of silver is spot + premium. Forgot about spot - it's an illusion.

 

[Alexx1401]

The spot price of silver only applies to paper contracts. The fact is the physical metal is in short supply, and if you want it you have to pay a high premium over spot.

The metals markets right now defy logic. In an inflationary environment, you would expect precious metals to increase in price. Yet they have been declining even as .gov debases the fiat currency. Partly because rising interest rates make it more expensive for speculators to hold the metal with borrowed money.

Market manipulation? Maybe. Buyers and sellers of futures contracts seem to determine the spot price, not actual supply and demand of the physical commodity.

But, the long and short of it is that the "real" price of silver is spot + premium. Forgot about spot - it's an illusion.

FAR from any kind of expert here. No idea how the "paper" trading of metals works. As for physical I have not tried yet but, the place I bought from claims they will buy it at spot. When I buy they pay to ship it to me so they of course can't sell it to me for the same price they will buy. It would be like the grocery story paying a $1.00 for an item and then sell it to me for $1.00. How would they keep the doors open?
I only started doing it with silver due to inflation. It's cash I would otherwise have in the bank making far less than inflation. I chose silver as it looked like it would be easier to "cash out" a few hundred at a time if something comes up and I want the cash. Now if the price goes "nuts" again like it did a while back I would probably dump what I have but then I would again be "now what do I do with the cash"?

 

[Member 34319]

FAR from any kind of expert here. No idea how the "paper" trading of metals works. As for physical I have not tried yet but, the place I bought from claims they will buy it at spot. When I buy they pay to ship it to me so they of course can't sell it to me for the same price they will buy. It would be like the grocery story paying a $1.00 for an item and then sell it to me for $1.00. How would they keep the doors open?
I only started doing it with silver due to inflation. It's cash I would otherwise have in the bank making far less than inflation. I chose silver as it looked like it would be easier to "cash out" a few hundred at a time if something comes up and I want the cash. Now if the price goes "nuts" again like it did a while back I would probably dump what I have but then I would again be "now what do I do with the cash"?

Silver is definitely a slow going investment metal in my experiences. Buy some, when you can. Keep it and wait. Need some cash, sell it, usually for more than you paid. If you do it right you should never lose money, but you don't always make a ton more.

 

[Cavedweller]

the place I bought from claims they will buy it at spot.

Of course they will buy it at spot. But they won't sell it to you at spot. That's the point.

I'm a little confused. If you haven't tried physical silver, what did you buy? I'm assuming coins, maybe? That would be physical silver. Whether coins of various denominations and mintage, rounds from private mints, bars of various sizes, ingots, it's all physical silver.

Figure out what percentage of your portfolio (in dollar terms) you want to have in precious metals. If the price "goes nuts," sell off a portion of your holdings until you are back down to that percentage. Stash the cash away and wait for the price to drop, because it probably will. Then buy back in at the lower price. Go "all in" or just buy back the original amount and pocket the profit. Either way you can't lose. It just takes discipline and patience.

Silver is no easier to cash out of than gold. Dealers will take either equally readily. But if you are looking for a SHTF ciurrency, silver might be easier to trade, as it's kind of hard to cut up a gold coin. On the other hand gold, being a more compact store of value, is more portable than silver if you think you might have to hit the road with it it. Those are just a few considerations, and I'm sure some folks will want to argue the particulars.

A mix of both might be good, depending on how much you've got to put in, but silver, sometimes called "poor man's gold," is not a bad way to start.

One thing you can do is watch the gold to silver ratio. They fluctuate in value relative to each other. When the gold to silver ratio is high (generally considered to be over 80 as I recall), it's time to buy silver. When it's low, it's time to buy gold.

Gold Silver Ratio Charts | Kitco

 

[Member 34319]

The spot price of silver only applies to paper contracts. The fact is the physical metal is in short supply, and if you want it you have to pay a high premium over spot.

The metals markets right now defy logic. In an inflationary environment, you would expect precious metals to increase in price. Yet they have been declining even as .gov debases the fiat currency. Partly because rising interest rates make it more expensive for speculators to hold the metal with borrowed money.

Market manipulation? Maybe. Buyers and sellers of futures contracts seem to determine the spot price, not actual supply and demand of the physical commodity.

But, the long and short of it is that the "real" price of silver is spot + premium. Forgot about spot - it's an illusion.

Thanks for this, helped me do more research online knowing these terms.

What I got out of it, the market is bugged up and investing in silver has lost its edge for small amounts investments. Living through 2008 saw a much different, more typical rise in value as the dollar went to hell. Now, the dollar is going to hell and silver is going down! I'm likely going to get out of it than.

 

[Alexx1401]

Of course they will buy it at spot. But they won't sell it to you at spot. That's the point.

I'm a little confused. If you haven't tried physical silver, what did you buy? I'm assuming coins, maybe? That would be physical silver. Whether coins of various denominations and mintage, rounds from private mints, bars of various sizes, ingots, it's all physical silver.

I have been buying silver by the ounce. This is why I have been confused about people who seem angry that the places will not sell it at spot. Again how can anyone in business buy and sell and item at the same price?
If I set up a store and pay $1 for an item and then sell it for $1 how would I keep the doors open?
I have been buying the 1 OZ rounds. The place sells old coinage minted before 64 when it was still partial silver but that was of little interest to me for what I want. Those the price is of course the amount of silver in them and the price the coin is going for to collectors. The place I have been buying from is normally about $5 over spot for silver. If you buy enough they ship it free which of course means they are paying the shipping and I have to guess insurance in case it's lost. They have some that are priced higher due to being "special" printings or whatever. Have to guess the buyers of those are hoping it will be worth a premium later? Those also did not interest me. Every so often they have a "special" where they have something at a few bucks over spot. If I have some extra cash that's when I buy and buy about $500 worth at a time so its free to me shipping. Now how the paper stuff for metals works I have no clue. Have to guess it must be like buying stock? There must be a fee for them to do the transaction otherwise they could not pay people to do it? Would guess if people buy the paper version probably a fee to sell it also like with stock but never have even looked at how it works that way. Bottom line the people handling sales have to make some money somewhere along the way here to pay the people doing it. I guess for anyone wanting to buy physical at spot price they may be able to find someone wanting to sell some. Then be able to buy it from them at spot assuming they were comfortable that the people were selling them real silver, gold, or whatever metal it was.

 

[Alexx1401]

Silver is definitely a slow going investment metal in my experiences. Buy some, when you can. Keep it and wait. Need some cash, sell it, usually for more than you paid. If you do it right you should never lose money, but you don't always make a ton more.

That is the only reason I bought some. No real plan to make bank off it. Just cash that was losing value as it sat in the bank waiting for some "need" so come along. Figured the silver will never be worth nothing and will at least hold the value. May not but the money in the bank was guaranteed to keep going down in value while it sat there. The bank was only slightly better than just leaving it sitting in my safe at home.

 

[Cavedweller]

The place sells old coinage minted before 64 when it was still partial silver but that was of little interest to me for what I want. Those the price is of course the amount of silver in them and the price the coin is going for to collectors.

Not always. Sometimes this is what is known as "junk silver." It's often sold in bags of various weights and values and consists of old coins of no numismatic value due to wear and high rates of mintage. It's sometimes preferred by those wanting a SHTF currency because it comes in coins of different sizes. And the premium is relatively low.

Now how the paper stuff for metals works I have no clue. Have to guess it must be like buying stock? There must be a fee for them to do the transaction otherwise they could not pay people to do it? Would guess if people buy the paper version probably a fee to sell it also like with stock but never have even looked at how it works that way. Bottom line the people handling sales have to make some money somewhere along the way here to pay the people doing it

Generally, individuals would not deal in futures contracts, except perhaps the very wealthy. Producers (miners) traditionally use them to hedge, just like farmers do. If the price is high now, and they expect it to drop, they might sell their future production for the next 10 (?) years at today's price on contract. On the other hand, if the price is low, and they expect it to rise, consumers (refiners) might buy 10 years worth of future production at today's price. Hedge funds also engage in this sort of activity, buying and selling contracts, which is a promise to deliver a certain amount at a certain price on a certain date. Something like 90% of these contracts do not involve any actual commodity at all, and end up cancelling each other out, with winners and losers on both sides. The futures market is a bit of a casino, and I don't pretend to understand it fully.

I guess for anyone wanting to buy physical at spot price they may be able to find someone wanting to sell some. Then be able to buy it from them at spot assuming they were comfortable that the people were selling them real silver, gold, or whatever metal it was.

Anyone who would sell physical silver at spot these days is either a fool or an idiot.

 

[Alexx1401]

Anyone who would sell physical silver at spot these days is either a fool or an idiot.

So where are people like me, if I decide to sell some for the cash supposed to sell it? Who is it offering to pay me more than spot for it and how much more are they paying?

 

[Alexx1401]

Not always. Sometimes this is what is known as "junk silver." It's often sold in bags of various weights and values and consists of old coins of no numismatic value due to wear and high rates of mintage. It's sometimes preferred by those wanting a SHTF currency because it comes in coins of different sizes. And the premium is relatively low.

Did not see any of that from the place I have been using. Maybe it's on their site and I just did not see it. Was not really looking for that. I did see them selling Morgan Dollars but did not pay attention to what they sold for. Have to guess it would depend on what value they had??

 

[Alexx1401]

Generally, individuals would not deal in futures contracts, except perhaps the very wealthy. Producers (miners) traditionally use them to hedge, just like farmers do. If the price is high now, and they expect it to drop, they might sell their future production for the next 10 (?) years at today's price on contract. On the other hand, if the price is low, and they expect it to rise, consumers (refiners) might buy 10 years worth of future production at today's price. Hedge funds also engage in this sort of activity, buying and selling contracts, which is a promise to deliver a certain amount at a certain price on a certain date. Something like 90% of these contracts do not involve any actual commodity at all, and end up cancelling each other out, with winners and losers on both sides. The futures market is a bit of a casino, and I don't pretend to understand it fully.

I hear ads on the radio a lot of people offering to put metals in your 401K. I had always assumed this must be paper? Not the actual metals?