Mark ups on bullion has gotten out of hand

I used the term mark ups to describe premiums on buying your silver or gold. When I look around online or at my LCD, the thing I have noticed is that a lot of these online dealers have pushed the price of bullion way up over spot on some of these so called art bars or rounds.

Some good examples are the Pamp bars or the Lunar series items that have become very popular as of late. It seems a lot of these companies are pushing the numismatic value as a selling point. So what you are getting now is a over priced piece of bullion. Think about it, your paying up to 2-3 times the true value of spot for something that has a fancy design on it.

Also they mint such a limited mintage it causes the price to rise if you want to be the small group of lucky people who can actually own one of these limited pieces. thats a bunch of crap in my eyes. Don't get me wrong, I do like the designs of some of the silver and have overpaid in the past for some of my bullion.

I think my issue is they are trying to compare this bullion with coins that were minted years ago and have true numismatic value from age and rarity. It was not in the thought process when those coins were minted to shorten the amount made to make a profit on selling those coins.

Now that a good portion of people are interested in investing or hedging their assets to protect themselves against what many people feel will happen, which is the dollar becoming worthless, I feel like these companies have jumped on the fear factor, and we have allowed these companies to dictate the value because we have and will pay what they ask.

I would love to get some insight on how others feel about the grabbing our asses without knowing us sensation I get out of this when dealing with purchasing bullion now. BTW I had another analogy I wanted to use, but the language would have gotten me in trouble

 

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It's pretty simple really. If you don't like the price of Pamp and Perth items, don't buy them. There are tons of bars and rounds available that have only an average markup. If you are a hoarder or a stacker preparing for the uber-hyped Armageddon, why would you want Pamp and Perth anyway?

The production quality of the P and P products is typically outstanding and, to some people, justify a higher premium. Collectors really don't mind paying it. Also, with most Perth products (and Pamp bars to a lesser degree), the larger the item, the less premium per ounce is charged. I really don't see an issue here at all.

 

If and item is more than just a lump of assayed metal I don't consider it bullion.
For instance, in spite of ASE's being touted as bullion items you will not only pay for the ounce of silver, you will also pay the cost of Mint production (dies, special planchets, marketing, etc.) PLUS the numismatic premium.
Yes, numismatic premium.
The coins are dated and there are albums so that you can collect the set.
And people pay that premium.
ASE' s are NOT bullion items.

Bullion is a chunk of metal with its accurate weight and purity punched into it.
To acquire them I would pay spot price plus a small handling cost.
That's it.
Bullion.

 

You are wrong.

No one spends $300 on a PR70 Silver Eagle because they are fearful.
They don't spend $100 on a slabbed Lunar coin because they are scared.
And they don't buy the Pamp lunar series bars to barter for necessities in a post apocalyptic world.

Quite the opposite. They spend that kind of money because they are doing well and they are optimistic.

The marketing for these collectibles makes no mention of armageddon.

 

You took a small portion of what I said and replied, if you read my whole statement I also say that it could be purchased as a investment or hedge. What I am saying is that a lot of the dealers out there right now have seen the current craze for buying bullion and taken advantage of the buyer with trying to sell bullion as a numismatic item. Not all mind you but a lot of dealers are giving you the shaft so to speak

 

It should be way over spot. If spot was a fixed price then maybe it could be less, but the mint buys, then melts, then makes, inspects, and ships all while spot changes. I think $3-$5 over spot is very reasonable for silver.

 

I ha

I have no issue with that range, its the $10 and up premiums that I question. I do realize that these mints are making collector bullion and there is a cost to make it, but some of the proof reverse minted coins are down right insane for buying.

 

So, you are saying that the products are not collectibles?

 

Don't forget, in the relatively recent past the bottom dropped a bunch in the spot prices.
The higher mark-up is probably caused as much by that situation as anything.
[Fictitious example just to make a point:]
Dealers buy silver at $2/oz over spot and sell at $5/oz over spot.
Spot drops $5.
NOW they would be taking a loss if they continued selling at $5/oz over spot.
So to avoid a loss they hold their former mark-up which now is $10/oz over spot.
Now they look like money grubbing dealers.

Yes, there are ways to take care of that.
Drop the mark-up a bit.
OR don't sell their older purchases until the spot rises again; only sell what has been recently bought at the new lower spot.
But only the bigger dealers can survive this.

 

Some are, but some are bullion with nothing special about them other then the design and where they are minted

 

Another good example is they use the term art bars, but you have bars with beautiful designs made in the US for example that don't carry anywhere near the premiums that names like the Perth Mint make. Whats the difference from a Perth mint design and a Minted bar made in the US with a similar design?

I think its the name, just like Calvin Klein, your paying for the name. The way its minted is no different.

Now I know there are collectible minted bullion that is made specifically for that purpose and that is different, but the other stuff should not be so costly. Specialty proofed and made minted bullion makes sense why it would cost more, but the rest not so much.

Just for clarification, I do realize it costs money to have the foreign bars shipped to the US, and that may raise the price a bit, but some bars are still 2-1 or more in cost of the actual spot price.

 

Not at all.
They are VERY collectible.
But that's what they are -- collectibles.
They should NOT be confused with investments, at least not bullion investments.

 

It's marketing and demand from collectors. If you want to stack and aren't interested in collecting, that's fine but it doesn't mean the dealers are sticking it to stackers.

During the silver crash it seems like the guys who held premium products did better than those holding generics. Maybe the guys sticking it to the stackers were the ones putting out all the end-of-fiat propaganda.

 

He was asking me if I thought they were collectibles, it was more of a are you kidding question to me, he was not really asking.

 

Actually it was a serious question because you were making the point that the coins should not carry a $10 premium and the dealers were doing something wrong.

Plenty of people in these forums have argued that modern bullion coins are only worth melt.

 

And with only a few exceptions that's what they'll get when they try to sell (except on eBay).

 

Ok, I was wrong about that statement lol. I don't think all bullion should carry low premiums, but it has gotten to a point where the mark up has gotten high even on more generic bullions. I have no issue with sellers trying to make a profit, I just think some are trying to make up for their losses when they bought at above $35. Its a combo deal lol

 

They can try all they want but dealers and knowledgeable numismatists aren't going to bite.
That's why there's so many listed on eBay.
But the competition is SO fierce that even the newbies can get reasonable deals.

 

Ebay does crack me up, you have people trying to sell some bullion for way higher then they should because it has the name Engelhard on it for example. Then when you contact them to see if you can negotiate the price down, they act offended like your nuts for wanting to get silver at a more resonable price. The same type of Engelhard 10 oz bar I bought recently for $255 when silver was going for about $240 for 10 ozs was selling for $350 or higher. These people are wanting to catch a moron it looks like

 

Are you sure it's the dealers marking it up? If you go here, you'll see it's not a cheap date to buy direct.

http://www.perthmintbullion.com/us/Buy-Silver-Coins/1oz.aspx?size=18

PAMP was set up more as a supplier to the jewelry industry than bullion, so you're a little off in your thinking there, too.