Okay, I understand what spot is, but concerning the spot my LCS has on their eagles, I'm curious how you guys make real investments. I've been on these forums before and mentioned that my LCS offers 4 over spot on Eagles. My question is, say I buy 430 eagles I pay an extra 572 for the privilege of getting silver in hand from my LCS. So nearly 2K for 1430 (at current market value). I have to then dream of silver reaching 18.30--but no wait. Will they then offer another 4 under spot when I wish to sell? So I have to reach 22.30 and account for inflation to see a dime? I know I'm missing something and wouldn't mind one of you feller's giving me the obvious, as you always do, which I appreciate. I might just keep to simple collecting...
Typically, a bullion dealer will buy at percentage below spot and sell at a percentage above spot. Spot is roughly the price they could sell for (theoretically) on a precious metals exchange, so this gives them a cushion against the price of silver going completely whacko overnight. In other words, you have it more or less right.
I don't think you'd ever be offered anything like $4 under spot, at least not by anyone reputable. More likely fifty cents below spot, to fifty cents above spot (for ASE).
Spot price for silver is for the 1000oz bars, so when one thinks they should be able to buy something smaller @ spot they're forgetting the additional cost involved in the process of making the smaller pieces
The more you buy the smaller the premium you pay per ounce. In my opinion for over 100oz you should pay no more than $3 over spot for an SAE. If a dealer needs to restock he will pay a higher premium to buy your SAE. My LCS is buying Eagles at $2.00 over spot right now.
I know a guy who took 5 million dollars from investors never paid it back. He owned a coin comic book and baseball card shop in a Mall he has like another 20 years in Prison to serve he was in his 50s seemed like a nice guy he bagged up my comic books in the 90s.
What I noticed with ASEs as spot goes up the premiums will go down and when the spot goes down the premium goes up...that was at my last LCS and when dealing with mint state ASEs.
#1.....never pay $4.00 over spot on Eagles. You can routinely buy them from APMEX, MCM, Baypreciousmetals someone on eBay for $2.50-$3.00 or so over spot, free shipping and no tax typically. My LCS buys ASE's at $1.00 over spot and sells around $2.00 over spot but then you have the 6% sales tax to tack on to the total. Tough for them to compete with the mail order folks. Other Sovereigns, they pay spot....Libertads, Philharmonics, etc. Tough game to make much money unless you own the store or bullion goes nuts.
I agree that it is tough to make money because of the premiums and other hidden expenses. I'm sitting on my stuff for ten years then giving it to my kids.
Makes sense, since some people collect them as coins rather than just pretty ounces of silver. I think you might find some of the less popular world bullion coins would have less of this effect.
I'm sure you were also wondering about the price of tea in China. Here you go. http://www.yixingteapotsale.com/teaname.htm
Or over 9% in California unless it's over either $1500 or $2000 (recently changed ,doesn't affect me - I know better than to pay tax on any bullion purchases - ever)...
Typically you ought to be buying at $2-3 over spot. Eagle premiums have been a bit higher than that at times, but I got some maple leaves for around there recently. When it's time to sell, if you're going to sell to a coin shop then they'll probably offer you around spot price, but you can sell to other individuals to get your premium back in some cases. If your concern is to turn a quick buck you might be better off buying paper silver, but that also undermines your investment since by not buying the real thing you aren't creating any real demand. I don't think investing with the motive of making profit in notes of debt is the way to go though. Dollars by definition are denoted in grams of gold or silver. What we have today are not dollars, not wealth. Every time you divest out of fiat currency in exchange for precious metals which are real money, technically that is 100% profit in real money because you didn't pay any real money to get the notes of debt that we use as currency.
Then that would mean everytime you cash in your silver you loose 100%. So your kind of stuck with it until you can barter it away for something tangibile.
The rise in bullion makes the dealer $$$ when it goes up.....prices are sticky to the downside so the premium is inflated to hold up the profit margins.
