Silver has dropped below $18 today; any chance the Silver Proof Set will drop below the current $53.95?
When spot prices drop more people will be buying, hence, more demand. The dealers can maintain the current retail price levels because fewer people are selling what they have to them creating a temporary "shortage" of supply. The margins do tighten up in a matter of time when things settle down and stabilize.
Hype and hoopla. Headlines will read silver at NEW LOW!, 12 MONTH LOW!, etc. There will be an initial rush to buy because of the drop in spot price which will prevent spot and retail price from changing proportionately to each other. In other words the spread will increase. Once the hype settles the spread will return to what is considered normal (from a historical perspective). Bingo. Well explained.
Now, that makes perfect sense, and that's what I expect to see at the show this weekend -- stubbornly unchanged prices.
I don't know that it is stubbornness as much as it is just reaction to the market. When people are buying prices stay up. When people are not buying prices come down. I know you know this already, just reiterating it. Most of the people at the show won't be stubborn (about their prices anyway) if they've been dealing for a while. The stubborn don't last long in retail.
It looks as though my initial question was misunderstood. I was not talking about the retail-resale market of silver proof sets, I was talking about the price to order new silver proof sets from the mint (current 2014 silver proof set is $53.95, down from the $67.95 back when silver was >$30 an ounce). With silver now below $18, could we see the mint price drop to maybe $49.95?
Although my replies were in reference to dealers/resellers, I think the same applies to the mint. I wouldn't expect them to drop the price any time soon while there is a small pop in buying due to new low spot price. Eventually however they may very well lower their price.
