What were premiums before recently?

Does anyone know the average premiums on silver from online dealers before the recent hike? I am talking recently though, not 2000, but lets say 2011 or 2012.

Specifically :
Silver American Eagles
Silver Maple Leafs
Junk 90%

 

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I bought some Libertads from Provident in early May of 2012 for 32.66 each. Silver was at $30.20. List price per ounce for credit card purchase was $32.66. Shipping brought the total price paid per ounce to $33.36. So the premium was either $2.46 or $3.16, depending on how you calculate your costs.

I bought some Maples, Moose and Cougars from them in late May of 2012. Spot price was $27.03, list price was $31.28 per ounce, and total cost was 32.27 per ounce. Premiums were $4.25 or $5.24.

I bought some 2013 Wood Bisons and Maple Leafs on Apr 15, 2013. Spot price was $24.10, list price (not CC) was $27.72, total cost was $27.93. Premiums were $3.62 or $3.83.

The first two orders were CC since I was new to ordering from Provident. The last order was personal check and was larger than the previous two combined, so the shipping wasn't as much per coin.

Hope this helps!

 

From 2009 through 2012 it was pretty consistent:

Silver American Eagles: $2-$4 over spot
Silver Maple Leafs: $2-$4 over spot
Junk 90%: No premium. Sometimes less than melt.

In times like these where metals get hammered everybody who knows it's a buying opportunity spends their dry powder and we see premiums rise.

 

I just went to a lcs. The dealer wanted $8 over spot for eagles, $4.50 for generics. Crazy.

 

Inflexion, I think that is one thought, but I don't see it is happening beyond a few on bullion forums. My thought is that the dealers don't want to post losses, so are waiting for the price they paid for it themselves to come back. Even the large bullion suppliers didn't buy everything at below $25. Many bought in the 30+ range as they had to get inventory. They may be holding it at the large premiums for a very long time, so hopefully they are hedging better.

Saying it is because "everyone in the know " is buying just allows people to make mistakes without thinking things out carefully as to portfolio balance, currents needs, etc. If one does think it through and still jumps in because they want to be in the know also, then that is their error.

Jim

 

Until recently, I had been paying $3 over for ASE and .5 over face value for junk silver. Meaning if the price was 19x face, I would pay 19.5x.
Hope this helps,
Jesse

 

Dealers who are hedged have no need to raise their premiums. It's only the mom and pop shops who don't hedge that fall into this category of holding out for higher prices. Any dealer that hedges makes and loses no money on the spot price movements since every physical purchase is offset by a paper short and they cancel out. Any profit is derived by the spread, so they aren't concerned with selling for a loss. If the high premiums weren't warranted they wouldn't be there, because people wouldn't be paying them. Any properly hedged dealer is making a killing right now, and the free market is saying that's OK.

 

The reason the premiums are going up is the suppliers are not keeping up with demand. U.S. mint is rationing the silver eagles that is why their premium went from 2.59-2.79 for a monster box (500), up to over $6 at the peak, now its back to about $4 at the major dealers.

Producers of generic also raised their prices that is why the generic prices are up, plus they are having trouble filling their orders as well.

The big dealers are hedged so they aren't facing any losses due to price drops. As long as you can replace the inventory you are selling then their is no reason to not charge regular premiums, but they aren't able to replace the inventory right now. If they were selling a million ounces at $3 premium for say eagles, but now mint tells them you are only getting half their normal allotment they have to raise the premium to make the same money they were before.

Their is definitely a shortage of "retail" silver, 1 oz , 5 oz , 10 oz ect pieces, whether or not their is an actual shortage of silver is hard to say.

 

I don't think there is any shortage of physical metal, but if the price doesn't rise enough to stem the retail silver constraints it might not matter. Most people don't want to invest in silver shot or 1000 oz slug bars.

There is still some retail silver available too, with the price divergence evidencing that demand is exceeding capacity to make+ship new supply. I wouldn't call that a retail shortage yet either although it's walking that tightrope. If that continues then eventually it will cause a shortage since that's just a lot of demand.

I do think we will see a physical shortage in silver within the decade regardless though unless the physical market is allowed to take precedence. Above ground available silver is less than a year's worth of mining supply, maybe half that. Mining supply falls short of total demand by roughly 200 MOz each year, and is only met through existing metal being sold at whatever the spot price is. Unless the price rises to bring more metal to market it is inevitable Mr. Anderson.

 

At Apmex (before that big slide down to $22), you could get 2013 ASE as low as $2.99, 2013 CSML as low as $2.59 (they had a temporary sale last month for $2.49 any qty). 2013 Austria Philharmonic for as low as $2.49, 2013 Fiji Taku & 2013 Somalia African Wildlife Elephants for as low as $2.79. I don't recall 2013 Kookoburra & Koala 1oz... maybe $2.99.

I recall Apmex had temporary special sales on their 1oz. rounds at 99 cents.

If you already know this, nevermind then. I started buying only a few months ago in March and didn't know what the premiums were before that.

 

If you look at Goldmart and things they actually sold and delivered all of last year, regardless of how slow...

Silver Eagles spot + $2.59 to $2.99
Silver Maples and Philharmonics spot + $1.99 to $2.19
90% was usually + $.59 to + $.99

The above info is from wrote memory, but that is usually pretty solid...

 

Thanks for all the info guys. In your opinion, do you think the premiums will come back down to the prices you each quoted if the spot price of silver does not recover?

 

Absolutely.

 

Yes, but the spot price must increase or demand decreases.

 

Or simply the passage of time. The longer prices stay at these levels, the more dealers will buy at these prices, and in turn, sell to new buyers. Spreads will return to normal after the retail market adjusts to whatever the new prices might be.

 

Right, so demand will decrease if people are selling to dealers.

 

I'm not sure that is the exact case. I think they're pointing out that if spot stays in this range for a while it will be a more normal price instead of a deflated price, psychologically, and the inventories will be replaced with inventory that was purchased at these lower prices.

 

Yes, I would agree with this. Demand doesn't necessarily have to decrease for price margins to moderate. There will always be buyers and sellers of PM at any price. The current margins are exaggerated, in part, buy dealers who were not properly hedged. However discounted some people might believe silver to be, there are still sellers in this market. As sellers continue to provide a supply of lower priced metal to dealers, they will slowly begin to adjust their margins back to more traditional levels as competition overtakes panic.

Obviously, the longer that silver stays in this price range, silver bugs will eventually become satiated with what they can afford to buy and the surge in physical demand will subside. But a dramatic drop in physical demand isn't necessary to see declining margins.

 

I think the way to look at it is when people sell something, then unsatisfied demand decreases by that amount.

 

Dealers cant sell inventory at the lower price so they make up for it with higher premiums. Pawn shops have a higher turnover and are not effected as much. I found pawn shops normally sell at spot or under if you are a good customer. I dont remember the last time I paid a premium for ASEs, maples or junk, but was probably last summer. With falling prices most will have a large supply they dont want to sit on too long. My local pawn guy sells me 90% halves for $7, 20% under spot! ASEs normally go for spot but if they have a good amount I offer $20 each knowing they only paid $16-18. I was even lucky enough to witness a guy bring in a box of proof ASEs and get paid $20 each and was able to scoop up a good number for spot.