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Is Silver next?
- Thread starter Magyars
- Start date
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People have told me that price over spot is directly tied to how much inventory they have or can get. No one is telling me anything near that $2 mark. More like $10 over. And BTW lest we think the guy we are buying from is gouging, they have to pay an over spot price also to acquire it to sell to you.
The "exchanges" are companies that have to make profit to stay in business too.
The spot price (Continuous silver contracts - SI00) is NOT tied the to retail price of physical silver metal.
Spot price is "on paper" market speculation of the perceived value of theoretical silver.
Just like the market price of gasoline is not fixed to the price that you pay at the pump next door, down the road or across town.
There is a relationship, but it's only loosely coupled.
The spot price (Continuous silver contracts - SI00) is NOT tied the to retail price of physical silver metal.
Spot price is "on paper" market speculation of the perceived value of theoretical silver.
Just like the market price of gasoline is not fixed to the price that you pay at the pump next door, down the road or across town.
There is a relationship, but it's only loosely coupled.
I've (mostly) been paying between $4.50 and $5.00 over spot online for rounds. So far, my "secondary market" rounds have been the best deal as far as difference between spot and actual purchase price goes, with the Krugerands coming in a close second when Provident had them on sale. They've gone back to normal pricing now though.
As recently as December he (my local dealer) was selling it to me for $1.50 over spot.
I've bought from a couple different INGO members for spot and one even sold me Eagles for below spot.
This keeps come up. Spot price is great as a ballpark, but when you're buying any pm especially online you're not going to be getting today's spot price. You're buying the material they bought in the past when the rates were something else and they still have to sell that off before dropping all their prices to todays level.
For example, if you bought 1,000,000 of silver two weeks ago and the SPOT prices drops down by 10% you're still going to need to sell what you already bought and paid for at the older/higher rate. That's what drives the markup over spot more than anything else I've seen. When spot prices are dropping the charge on top of it gets higher to cover those costs. The prices are rising I normally see a thinner margin on top of spot. Just a couple things I've noticed over the years.
For example, if you bought 1,000,000 of silver two weeks ago and the SPOT prices drops down by 10% you're still going to need to sell what you already bought and paid for at the older/higher rate. That's what drives the markup over spot more than anything else I've seen. When spot prices are dropping the charge on top of it gets higher to cover those costs. The prices are rising I normally see a thinner margin on top of spot. Just a couple things I've noticed over the years.
My first order of 4 secondary market silver rounds is arriving today. I'm excited! 
spencer rifle
Grandmaster
My sovereigns and Hungarian 100 Korona arrive today!
Junk from Gainesville Coin is already a week late and not shipped yet.
ETA: Aaaannnddd.... USPS screws up again. Of course no one is living inside the mailbox to sign your form. You actually have to DRIVE BACK to the building - you know, where the people are - to get a signature. Hope they don't screw it up again tomorrow.
Gainesville says it ships tomorrow. We'll see.
Junk from Gainesville Coin is already a week late and not shipped yet.
ETA: Aaaannnddd.... USPS screws up again. Of course no one is living inside the mailbox to sign your form. You actually have to DRIVE BACK to the building - you know, where the people are - to get a signature. Hope they don't screw it up again tomorrow.
Gainesville says it ships tomorrow. We'll see.
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I've been wanting to shift a little towards gold and was going to sell some silver to do so. Watching the ratio drop to 65:1 or less was egging me on. It has crept up a little again but the premiums on silver are so far out of whack as to make it less appealing.
This morning I looked at some numbers. The silver to gold spot price ratio was 66.8:1, call it 67:1. Cheapest silver I could find on Provident was some buffalo rounds at $30.47 each or $2,041.49. A 1 oz gold bar from the Rand Refinery was $1,761.83. So while the ratio was 67:1the same money to buy 1oz of gold only gets you 58oz of silver.
This morning I looked at some numbers. The silver to gold spot price ratio was 66.8:1, call it 67:1. Cheapest silver I could find on Provident was some buffalo rounds at $30.47 each or $2,041.49. A 1 oz gold bar from the Rand Refinery was $1,761.83. So while the ratio was 67:1the same money to buy 1oz of gold only gets you 58oz of silver.
I picked up 5 oz. of .925 Sterling today at $26.44/oz. Which I guess is really only considered to be 4.63 oz.? Premium was minimal, but they (APMEX) charged tax, which they didn't do on secondary market rounds. I don't know what the difference is that makes one taxable and the other one not.
spencer rifle
Grandmaster
These finally arrived today:
My silver Krugerands that I got on sale at Provident should be here Saturday. So far, the .925 sterling rounds/bars that I just bought are the only ones that are currently showing as valued above what I paid for them, but today silver is up a little bit.
Just got two more orders from Provident this morning. The 10 Silver Krugerands and 10 Buffalo Silver Rounds. 
There are "gold IRAs" available. The idea is that you have x$ in your account and you contact a dealer (provident or money metals exchange etc) and buy x oz gold/silver which is stored in a depository's vault. Instead of interest, the value of your account goes up or down depending on the value of gold or silver. Annual vault storage rates run around $1.50-1.75 in addition to IRA mgmt fees.
If you're holding cash in an IRA instead of putting it all on the stock market roulette wheel, this might be a good idea since interest rates are 0%, inflation is officially about 1.5%, and .gov is dumping another 1.9 trillion $ in "stimulus"
If you're holding cash in an IRA instead of putting it all on the stock market roulette wheel, this might be a good idea since interest rates are 0%, inflation is officially about 1.5%, and .gov is dumping another 1.9 trillion $ in "stimulus"
Yu can do that with silver as well.
Interested in others' thoughts on 90% junk or constitutional silver versus regular bullion & coins/bars. Other than the Mad Max scenario where we are trading these for a canteen of water, do you see any significant advantages?
spencer rifle
Grandmaster
Around here at least, people will be very familiar with our US currency. Junk can often be had with minimal premiums, but you have to watch carefully. While online shops were selling $100 face value for $2500, our local coin shop was selling same for $2200, and you got to pick the denomination. Some places charge extra for halves.
In the Mad Max scenario:
Advantage - they won't have to guess what it is and what it's worth.
Disadvantage - they might think it's worth what a copper clad is worth, face value. Especially confusing is the proliferation of Kennedy halves - 90%, 40% and 0%.
Most rounds and bars will say what they are, but I can see non-stackers being hesitant to accept that at face value.
In the Mad Max scenario:
Advantage - they won't have to guess what it is and what it's worth.
Disadvantage - they might think it's worth what a copper clad is worth, face value. Especially confusing is the proliferation of Kennedy halves - 90%, 40% and 0%.
Most rounds and bars will say what they are, but I can see non-stackers being hesitant to accept that at face value.
I agree there is security in a known quantity of silver and counterfeiting a circulated coin is pretty hard to do and rare. I did see a video once from Backwoods Home where they had received a counterfeit quarter. But the risk is mitigated. And yeah, even with higher per ounce premiums, it is some of the cheapest fractional silver.
