Silver Eagle pricing. I don't understand.

Since this thread has taken a keen look at bullion premiums I wanted to add a screen shot of a purchase I made from JM Bullion back in 2017.

Note the first item on the invoice. It is a tube of 10 one ounce rounds. These were a promotion from JMB for one time only at zero premium. They were sold at spot $16.38/oz. JMB no longer offers this promotion.

The second item is 10 silver rounds with a premium of $1.59/oz.

The third item are two 10 oz silver bars with a premium of $.79/oz.

The last item is just a silver round purchased for a friend who's daughter enlisted in the Navy. Premium unimportant for him.

 

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The thing was that 2015-2019 was 5+ years after a spike to $45 an ounce.

So you had YEARS of FALLING prices and lack of demand/interest in silver. People made money in stocks.

There was NO WAY dealers could get away with charging a premium for something which was falling in price for years.

 

So we'll see if your theory pans out in a couple more years. In the meantime I'll continue to buy zero bullion at these premiums. I'm all set forever if need be.

 

I wasn't paying attention back then, but I've been tracking the online dealer sites lately and have noticed something interesting. Their premiums tend to be a bit better than brick and mortar places, however, there also seems to be a bit of a "premium" built into their spot price.

I've had a handful of dealer sites open for a while, along with the bid/ask spreads on futures contracts. The first thing that is immediately obvious when simultaneously refreshing all of the pages is that there is very little consistency in the spot prices presented on each page. While the rank order between sites is not always the same, there is almost always a spread of 15-20+ cents on the whole.

I'm sure they are all using an automated API (periodically gets info from a separate database) to keep their prices concurrent. But, to me, the lack of consistency indicates that there are some extra manipulation algorhithms running on the backend. I haven't systematically collected and analyzed the data, but passive observations indicate that the spot prices given tend to react immediately on the way up, while tending to lag a bit on the way down. This, again, would indicate some manipulation that accounts for some extra bit of "premium".

 

$38.89 for a silver eagle with spot price at $18.91.

This is a new record for APMEX with an eye watering 105%+ premiums on ASEs.

And if you just want a single coin with the mint packaging, get ready to be fleeced......



The premium on a single ASE with the mint box is so ridiculous it's not even worth calculating.

 

Hey, now, those quality presentation boxes don't grow on trees...

 

That's about 1% spread, reasonable when dealing with a commodity.

That's normal....prices tend to be "sticky to the downside." It's human nature, price discovery, and accounting math that requires replenishment of inventory at higher prices for longer periods of time than replacing inventory at lower prices for shorter periods of time.

 

With these retail sell premiums being so high, anyone have current data on buy premiums?

Simply put...have any of you (us) sold ASEs to a dealer in recent weeks and what price did you get per ASE?

There's always 'upside' to most anyone if one has the correct attitude.

I ask because if I had a 'big' pile of ASEs right now and needed space, I'd look at converting to AGEs which only have about 10%-15% premium right now on the 1 toz-ers.

 

Unless you're talking about a national dealer with advertised prices dealer prices will vary wildly. Its easy enough to just sell them on eBay and get basically the full price over low LCS offers

 

Agreed.

So, got a price for such an action you've taken recently?

 

Not for bullion ones. Took a bit of a beating on a couple congratulations sets, the milk spotting this year across all the silver products is some of the worst I can remember. The military 2.5oz seem to be okay knock on wood, but out of the like 8 commemoratives and ASE products i've gotten this year 7 were milk spotted when they got back from grading.

 

(Not that I "like" that you took a beating, but thanks for the data points...)

 

Haha I get it. My worst beating by far came from the Negro League Privy Commemorative where one of the boxes was empty. Just had to eat that, theres no way the mint would ever believe me that the coin was missing. I'll very likely just stick to the 2.5 military medals from now on until they get the spotting under control.

 

I suppose I wasn't clear enough.

Data points on the price paid to you when you sold to a dealer.

This is the information that's important to understand both ends of the current retail market for ASEs.

 

I guess I wasnt clear enough then. Unless its a national dealer what someone can get from their local dealers is completely irrelevant to anyone other than people that go to that specific dealer. It just flat out doesnt matter what an LCS pays and again varies wildly. Is that clear enough?

 

No it's not. It's useless opinion.

A data point is a data point, because the small, medium, large dealers are likely taking cues and market 'direction' from the huge national dealers (and ebay more likely).

 

That missing commem would have dusted me for sure. I'd have filed a report.......

 

What your paying for with a trustworthy middleman is the security of knowing you aren't getting ready to be ripped off.

 

It wouldnt have done anything other than create more of a hassle for me. If it was a more expensive coin or medal I would have, but with the amount of hours and hassle that would have come trying to rectify it I decided it wasnt worth it and just had to eat that one and move on.

 

What an LCS pays for in Philly is different than Austin, or NYC, or SF, or Duluth, or Omaha, or Baton Rouge, or Starksville, or Tulsa, or Phoenix etc etc etc. Shops will offer different prices and sometimes wildy different in the area.

Its not a hard concept that the only place an LCS price is relevant is that actual LCS. There could be reasoning behind it in that they just dont have the market for it, but often times its just because they think they can or dont know better. LCS also give different customers different prices.

If you want a data point look what you can get for them online on eBay or national offers, subtract the fees and use that as a point. Thats actual data. What Joe Shmoe can get at the local shop that no one else has access too is not a relevant data point for anyone other than Joe Shmoe