Gouging on gold...

Well, now that the panicky idiots are fleeing from the stock market they have used and abused, now they are instead buying up all the gold and sellers like apmex are gouging people...The other day I am looking to buy an ounce krugerrand like I always do and apmex not only doesnt have any ounce krugerrands but the gold they ARE selling is all at outrageous prices above spot. So I assume the problem is the panicky idiots have been buying up all the gold and the companies that sell it, what they have...is now far to much over spot for me to even think about buying (up to 70-100 bucks over spot)

I sure wish these jokers would scamper back to the stock market and start dumping gold so I can continue my hording of krugerrands

 

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Yes please. I want silver back to 10-15% over spot. ;,(

 

I agree, Drusus. I used to buy a lot of coins from Apmex. But, when they started charging 100% and above over spot for silver, I took my bisiness elsewhere. I understand demand is high, but just how wide a profit margin do they want before they're just crooks?
Guy~

 

Agreed. :thumb:

 

yeah...it used to be I could get a nice price on an ounce Krugerrand there (krugerrands always being one of the more modest priced of gold bullion) and I told people I thought they were great...now I dont know. Its like hotels when there is a big function in town and 80 dollar rooms turn into 180 dollar rooms...It just seems like gouging and I wonder...who the HECK pays 80 to 100 bucks over spot for gold Krugerrands? That just doesnt make much sense IMO.

If anyone here has a place that still has reasonable prices over spot for ounce gold...please let me know...if its against the rules to post it here...PM me...It time for me to purchace some more gold and I cant seem to find a decent price.

 

Supply and demand.
The demand is high now, so the suppliers are in control.
They can name their own markup.
Their thinking is, 'If you don't like it, someone else will.'

I hope you are kidding about this.
In times of plenty, a bullion dealer's markup is in the 2-3% range.

 

Buy all the silver and gold you can. There's no way they can mine silver at $8.90 oz. and nobody is gonna sell Gold for $765 an oz. There's major manipulation going on out there. BUY BUY BUY. Prices simply have to get back to sanity. And Sanity is much higher than it seems to B right now.

 

Just wished the gold stock I have in my 401k would follow this upward trend. Well they say patients is a virtue, guess I will find out

 

Free markets charge whatever the market will bear. To complain that a supplier is charging too much or that buyers are paying too much is pointless. Maybe they are right and the complainers will turn out to be wrong. Everyone was happy to pay the exact same price that is available now in the not too distant past. Maybe everyone should complain that the spot price is too low since that seems to be what's bugging everyone. There are many people who buy whenever the price is below the cost of production and they don't worry too much about other factors.

 

It's easy to say this with gold and silver. But, if this were the case with gas, bread, or gasp....beer, I'm sure it would be a different story alltogether.
Guy~

 

Not at all. Having lived through the gas lines of the 70s, I would much prefer paying a higher price than living through a shortage. What people forget is that high market prices are the means in a free economy to signal to producers/investors when more resources must be directed toward the production of certain items -- because a profit can be made. No profit, no investment, no production, continued shortage.

 

They made profit already at lower margins so if there is more demand then you can charge less, wal-mart and volume sales equals lower prices. Of course the free market is effecting it, thats my complaint, people are turning to gold and people know they will pay higher amounts. I dont know if there is a huge shortage of Krugerrands as I see plenty for sale but just much higher prices...certainly, you could say that about anything...it doesnt do any good to complain...but I do anyway since I was buying plenty and cheap not long ago. I am more than happy to buy gold at a bit over spot simply because I like to have them in coins but I dont want to pay 100 over it. So I cant buy Krugerrands cheap any more, so I complain I just thought with the nice dip in prices I might be able to snatch up some more closer to 700 than 800.

I guess though, you are right, if people are snatching it up then those of us cheap bastids that dont arent a big loss. Hotels hike prices because they know they have people that MUST stay in hotels for a certain amount of time, so prices go up for those weeks. Nobody MUST buy gold but I guess they will...I look at them as longer term investment and dont sell it even when the price went up to 1000, hundreds more than I paid. It goes up and down and in the long run always up. But I am on the hunt for some cheaper gold, they dont have to be pretty.

 

I guess my concern is when will the profit margins equalize. Will we continue to see a 100% markup on gold and silver when the markets cool and supply is in order with demand? I think a lot of suppliers will try to continue getting such markups, destroying the market for those who buy bullion.
Guy~

 

:headbang:

 

good lord man...my complaint is the flood of people into the gold market (free market activity) is making it more expensive to buy gold, it is personally effecting me negatively right now. So I am complaining...about how it is effecting me and my ability to buy....I am not saying abolish the free market. How much of a rise is gouging on a bullion coin and how viable is a bullion coin as an investment in gold when it is being sold at high premiums over market? It negates the reason for gold bullion coins...to buy gold close to spot price as a form of investment...

I'm not calling for revolution and the overthrow of the free market system so relax.

 

I think it's more likely that they are trying not to lose money. I bought alot of silver at $6-$9 an ounce and sold it ALL when it was at around $18 an ounce, I'm sure some of it sold (remember it went to $21), but you know that dealer was stuck with what people couldn't afford.

I agree there is manipulation (I would have to be retarded not to) , and that it wouldn't be a bad idea to buy though :thumb:

 

Think of what OLPEC is doing.

 

Straight Talk

Hello All,
This is my first post here, though I have been reading around this forum - and other highly reputable forums for some time now.

I wanted to take a minute to address some of the valid, however mis-understood concerns you have in the following quotes:

A few weeks ago, I wrote on Gold Is Money about this very subject. A writer for Motley Fool picked up on the post and is writing / has written an article for them explaining what is really happening.... So you guys aren't the only ones concerned about this.

Here is a brief synopsis of this post but you can read the original here:


As many of you know, there is a HUGE disconnect between the paper and physical market - which is very apparent right now. The spot price is influenced more by the COMEX paper contracts than anything else.

As the huge stock market companies (AIG, Bear Stearns, JP Morgan..anyone..) are desperately trying to raise capital, pretend that a recession isn't here or looming, and stay somewhat liquid - they sell off assets. Namely, tons of paper contracts, futures, shorts, etc., at firesale prices - this drives the spot price down.

Meanwhile, you have a glut of people (Drusus called them idiots) flooding the market trying to escape from the debacle the stock market has become - they are buying up physical metal in droves... which causes the mints (the US Mint in particular) to ration or even discontinue the production of investor coinage causing further physical shortage.

Dealers, like APMEX are very much caught in the middle of this riff. On the one hand, we have investors like Drusus and Coleguy, who rightfully want to purchase investments and have done so for some time without much competition. (Drusus - if we could find Krugs, we'd load up on them - no one has them, anywhere. If we did find them, they'd last for minutes or at best hours and be snatched up in a heartbeat..keep reading)

On the other, we have the Distribution Wholesalers, who are asking us "How much are you willing to pay" when there are many other dealers that are out of product, with many customers trying to buy, creating insane competition and driving up cost.

Believe me, if we could even touch product for lower premiums, we would - but the market is extremely tight - so we are paying much higher premiums to the wholesalers than ever before.

In fact, our profit percentage really hasn't moved much at all - though from your perspective, I can see why you'd think it has.

From the GIM Post: " As an example of this—recently APMEX paid up to $5 over spot for 17,000 Silver American Eagles just so we would have something to offer. Within 24 Hrs of making those SAEs available online, they sold out at $6 over spot! We have been seeing this happen almost on a daily basis for the past two months. Last Friday in fact, our servers almost buckled as a result of all the orders being placed at the same time."

KEY Take-Away to Notice here - the sale price was $6 over (which people gladly paid since we completely sold out in less than 24 hrs) - of which we had $1 - the other $5 went the the Distributor --- so I ask you, who's gouging who??? This is the situation with just about all of our "bread and butter" products - take a look at the APMEX Top 40 Page - the product just isn't available in the market right now...investors aren't selling (they're hoarding), mints aren't producing (they're rationing or discontinuing) and the Distributors are competing heavily. What product we do secure ( we are scouring our resources daily ) sells out literally in HOURS...what does that tell us about the market.

I understand your frustrations, I really do. Hopefully, this post will help everyone understand what is really happening, strange as it may be.

The folks at GIM understand. The people behind Motley Fool get it. I'm sure that everyone here at CoinTalk can understand it too - especially when it is clearly and honestly addressed.

Thank you all for your support in the these very odd times. Who knows when business will resume in a "normal" capacity, but you can rest assured, we want it to normalize too...

 

Dave, thank you for taking the time for such a thoughtful response.

 

No Problem Cloud... glad to be a part of the community and offer what insights I can, when I can.