Just completed my monthly review of the bullion portfolio. Seems the gap has widened substantially on half ounce eagles. Apmex is now sporting a 34% premium on them. I suppose it's merited given they are about the only place I can find that has any. Worse yet, even platinum bars are pretty scarce, at least for reputable bars. Makes me wonder if spot prices even matter at this point? Seems the physical market is failing when there is no real physical supply available, yet prices seem to dictate nobody wants the stuff.
We have been here before. Remember physical pm in the small amounts collectors buy are a tiny, tiny fraction of the pm market. The price is set by the large user of pm like automotive catalyst manufacturers, jewelry manufacturers, etc. Its very common for the real price, (spot price and futures), to go down and coins and tiny amounts to stay high. I guess an analogy could be in my industry, the dairy industry. You have consumers who buy those little coffee creamers, and other companies who buy 200 truckloads a week of cream. Would it make sense for the consumers buying creamers to say, "since the price of my creamers hasn't gone down much, but the price that someone who buys 200 truckloads a week pays has gone down, that means the price the large manufacturer pays no longer is indicative of the real value"? Or, is it the consumer buying creamer is a specialty market, and THEIR purchases do not matter enough to move the market? To anyone who says "spot prices don't matter" or are artificially low, then buy one. Place the cash up front for a contract and take delivery. Nothing is stopping anyone from doing so.
I'm puzzled as to why the bullion makers aren't buying pallets of bullion and stamping out bars. Provident and SD used to stock platinum bars, and they haven't had squat for quite a while now. I agree we're just a tiny fly in a big market, but if the mints are in business to make and sell this stuff to us, why isn't it happening?
One reason could be they are afraid of holding stock if prices decline. Or maybe demand isn't as robust as you think it might be. Maybe they make more money keeping prices of whatever little stock they might have high than creating a lot of supply and lowering the premiums for their older stock. I just know there is tons of supply out there. For Pt, South Africa has got over their strikes and really producing metal right now.
Look for the Valcambi bars, they are usually priced reasonably. Here's one for $49.99 over spot which isn't too bad given what premium other platinum products are sporting: http://www.jmbullion.com/1-oz-valcambi-platinum-bar/
