When do Dealers start selling Bullion at market Value?

Does it have to stay as say 14.50 for a few months for dealers prices to reflect the down turn of the price of Bullion. I'm kinda new to watching the prices... I know the Dealers would like to capitalize on the stuff they have and there are people buying gold and Silver all the time so the Dealer might never mark it down when they bought it over for the current going price.

 

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When the buyer starts buying the size of bars that spot price is based on.

 

As long as we are willing to buy with their added premium, it might never come down. I talked to a dealer the other day and he can't seem to keep silver on the shelf.

 

Premiums are up right now because demand is up. It usually comes back down, but it's a slower process than up.

 

Spot, right now, is what the dealer will buy your silver for; less a small discount. He doesn't follow the same rules when selling. He will put a high premium on spot to compensate for the metals current value. It's called Capitalism. It's like the food chain; the bigger fish eat the little fish.

 

It's the law of supply and demand. Right now, supply is okay, my dealer has run out a few times but her always gets it back in shortly. Demand is strong. Therefore at the present time, dealers can charge a larger commission on both ends. If you buy in bulk, larger quantities, then you will save on the markup as a good dealer will lower that. A steady price in PM will not make any difference in the dealer's cost or markup.

A dealer must be very careful and good at what they do, otherwise they will go out of business fast due to the ever changing prices of PM. In other words, they are in a business to make money and is the Pm goes suddenly the wrong way, they can lose their shirt.

 

I'd say the price at which most sellers are selling is "market value".

Sellers can feel free to ask a higher price than this, but they may not sell enough to stay in business.

Sellers can feel free to ask a lower price than this, but they may not be able to keep stock, and they may not make enough profit to stay in business.

Spot price is not the same as market value, unless you're buying or selling Good Delivery bars (1000 ozt for silver).

 

I just posted this on another thread, but JM Bullion is more than $1.50 per oz premium on their cheapest bars - even in large quantity. That's over a 10% premium and that's really high.