ASE prices I'm a little confused

So I have been watching silver like everyone else and I don't understand how silver can be below $20 and the ASE prices seem to stay the same? Seems like it's just more profit for the coin shops when the price goes down?

Jeff

 

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It seems like the premiums for generic silver have stayed the same. Eagles wholesale are now spot +$3.50. Local coin shops do not make more when silver prices fall. However, big bullion dealers such as apmex and provident may if they hedge their positions.

 

My guy's got them at $5 over spot. Gotta allow the devil to make some profit ya know......

 

$6 over spot here. I passed and went with Maple Leafs as they seem to be staying the same prices over silver.

 

Not long ago, the dealers would mysteriously run out of silver when the price fell below what they paid for it. Some buyers would claim they just left it in their safes until the price recovered. If it stayed low for a long time, the need to get a cash flow going, would see it come back out. The old adage was the market would even out on the rise of prices to offset losses when price fell. Now the likelihood has premiums rising, when silver goes down, instead of the inventory disappearing. It looks like they have found a way to pass any loss onto the small investors. We are the fall guy now, not them.

 

i have a $50 amazon gift card, which i was going to invest in ASEs, but theyre still $29.95 each!

 

Supply and demand!!!!!

The wholesaler I use is paying $22.37 for ASE's and selling @ $23.22. So if I want to make a profit after shipping I have to sell at 25+

 

i also noticed that the price of junk morgan and peace dollars has been the same for months. i wonder why

 

just buy

 

Junk US silver coins have a problem that ASE's and other "bullion" items don't have.
Junk US silver coins are only 90% silver and for many uses have to be purified during the melting process.
That costs extra.

ASE's and other "bullion" items are 99.99%.
No purifying necessary except for some lab purposes.

 

This post has no relevance to what the OP posted. Premiums for Eagles are usually more than "Junk" silver. However, now the premiums have appeared to gotten out of control because of the recent price fall.

 

True.
It was more an aside to jlogan's post.

 

What BS. Let those idiot local dealers and pawn shop owners stick those coins! You know how many ASEs they mint each year? I get a nice kick our of watching knuckleheads stay with a trade even though they're bleeding and then finally they're slaughtered. Serves them right for not hedging their risk. Don't waste your time with them. Plenty of bigger brokers keeping premiums low. I hope silver tanks some more and stays low for a few years. Won't bother me a bit. I don't put all my savings into bullion purchases. Then, you'll see plenty of low IQ local dealers go out of business. Good riddance, I say!

I see plenty of these people spamming Craigslist. 40 bucks for Kooks and 30 bucks for ASEs. Are you kidding me? Keep wasting your time dealing with hate replies and refreshing your ad every couple of days. I have never gotten back the premiums I paid for any of my bullion. I always lose a bit in premium. That's how it works. Why would anyone pay you $7 in premiums when they can go to a big dealer and get the same thing for $3?

Last year, I sold ASEs for $1.5 over spot. Sold about 12 rolls in less than 2 hours. All to the same guy! That's before I found this forum. Now, if I ever decide to unload, I'll probably offer them for 2 or 2.25 over. That's a fair price for me and a good deal for the buyer.

 

I dont know what "big dealer" your talking about but Apmex is selling 2013 ASE for $25.61 credit/ $24.86 cash. So for a cash buy that's a $5 premium and you have to pay shipping. $6 to $7 over sounds much better when you look at the big boys now.

 

Wish the price of silver would sink a bit lower so I could get back in the game. Reluctant to play at today's prices......

 

JM has them for 3.50 over in any quantity. Free shipping $2500+

Besides, considering the mintage, even 3.50 in premium is high.

I won't pay a 25% premium to own physical silver in the current environment. That's outrageous. There's nothing special about ASEs.

 

If you want silver for silver buy generic silver ounces or bars (ie. Golden State Mint rounds or JM's). Silver Eagles command high premiums because everyone wants them and they are easy to sell. From what I've heard it's pretty rare for someone to buy ASE's for spot, even for dealers. And honestly when silver goes down, most dealers lose out which is why the premiums are so high. After all, if a dealer bought silver when it was $26 way back when, and then sold them for spot, his business would be screwed (especially if he bought those eagles originally over spot). Even at a $6 premium a dealer would lose out on the labor costs for getting the rolls of silver in. That's why many places don't even bother with bullion. It's a tricky business. That's why I think it's better to diversify and keep bullion for long-term investments only.

 

If you are interested in coins that are a step above bars, but not as pricey as ASEs, have a look at the Armenia Noah's Ark and the Suriname Map. Both are nice coins, with a premium of about $2.50 at Provident.

 

That's crazy! You should walk in to your LCS and demand he sells ASE's closer to spot. Tell him/her it's not your problem if they loose their butts!!!

The above was a joke but I hope you get my point.

 

And it always has been sir. Its not just pm market either, this is a very common occurence of physical markets. Its one of the primary reason why paper markets were created, to mostly eliminate this middleman markup.

I am not one to begrudge anyone a profit or a living. If you can get it, good for you. However, as a buyer of pm, I find it very convenient knowing this is happening and how to sidestep it. If silver were to drop quickly to $16, I would probably look at buying paper silver. This way I am locked into the base price, and can wait for premiums to subside. Premiums always DO subside, they always have in the last 35 years I have been looking at this market. So pay attention to premiums, and if they are simply way to high for you right now, buy the paper pm, and swap it out for physical pm when premiums are more historically reasonable.