If the smelters are paying 90% of spot who do they make their 10% from? Also there has to be a certain price that silver cant go below befor its not even worth being smelted right?!? Also, at what point will dealers stop buying silver, worried they will get hung with it on a overnight crash? If silver hits a $100 will you still be able to walk into a coin shop and get 85% of spot for a 1 ounce round?
Smelters would generate their profits by reselling pure silver, which seems to be garnering up to a premium currently of around 7% above spot. So, they would be expecting an 11-19% ROI on each 100 OzT equivalent that they run through their machines. Also, I'm positive that the US government is buying casting silver for 97% of spot at this point. There's no other way they could meet the ridiculous demand for Eagles.
Great question. Right now, the market is very liquid and everyone assumes that the way things are is the way they will always be. But back in 1980 when silver had its spectacular rise, the highest prices were only available in the futures market. The physical price was quite a bit lower because dealers and smelters were swamped with silver sellers, and many stopped buying silver. So the posted price might have been $50, but few were able to get out of the narrow door due to the crowd. I have no idea if this will happen again if the bull market really takes off, but it's something to think about.
So, they're non-sovereign? Usually non-sovereign goes for a slight discount (98% of) to spot. Post on craigslist in the collectibles section, and you should get a response or two.
Sell your silver on Craigslist or eBay. I prefer Craigslist - have never had a problem selling silver, and don't have to pay eBay/PayPal/shipping fees. Just be careful, and learn to sort out the bots.
Since some bullion dealers don't have the silver coins to sell, I believe the buying will continue for quite some time. You cannot sell what you don't have and sales are what generate cash flow and profit. I say this because not long ago, I looked online for Washington quarters thinking to buy and search. Of the sites I viewed, all reported the quarters to be either "out of stock" or "unavailable". That information got me to decide to keep all of mine for the time being. gary
I think the commercial buyers that have big money aren't afraid a drop. They're in it for the long run. If they have unmelted silver on hand they'll store it and run their show with the new low prices. Then the price will climb again even higher and out comes the old stored silver making them a profit. The mama and papa buyers will be in worse shape but the smartly managed ones will succeed in staying in business. I heard awhile ago that big dips in the market are always higher that the previous lows. So the starting point to the next rise won't be that low and will generally take less time to recover than the previous big dig did. That's my humble opinion. For guys like me. I hope I'm not over invested in PM's at that time. If I can sell what I need to at a little above what I paid or just break even I'll feel okay.
