Dealer "buy price" for junk silver coins?

SilverSurfer, that is called supply and demand. That is how spot is decided is on how much is being bought vs sold and the price moves from that point.
The same can be said for buying... "Here is a secret no dealer wants you to know....Dealers make their money selling , not buying. If everyone demanded spot and the dealers said no, how would they make any money"
You have to get EVERYONE to agree to this and then the market moves. Regardless of sellers or buyers.

 

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My belief is that the market is flooded with silver (and gold) buyers with tons of overhead and advertizing costs. They are usually those ads on TV late at night, and jewelers. They pay rediculously low prices . Some other buyers take advantage of that, and offer more, but still lower than it should be. I personally believe you shouldn't settle for less than 90% of spot. If you have a large quantity, buy a spot at a coin show, and sell them at or above spot. Many sellers are getting a 20% premium on 90% silver currently.

 

Keep in mind that no government issued coin is worth less than spot because the weight and purity is assured. The coins don't have to be assayed, and this fact alone makes the intrinsic value of every gold and silver coin at least a small premium to spot. No large buyer is going to tell you that.

 

Duke, the market isn't influenced by me, a small fry in the game. It's influence by big money, investment bankers and such. There is a sell and a bid price. They are never the same thing. Sometimes the gap between the sell and bid is small when the market is really moving. Other times the gap is huge. So, 90% of spot on a tight day during a bull run might be a bad deal. While the same 90% of spot on a huge gap day when the trading is light and the market is in a bear run might be a darn fine deal.

My point on the not selling for less than spot is that, you can always shop around. Why sell your silver or gold to some dufus that wants to give you 60% of spot, when you can go down the block and find someone willing to offer 80% spot? Heck, keep searching and you might find some dumb pawn shop that doesn't keep track of bullion prices daily and they might offer you 90% of spot right after the market dropped 6% that day.

But regardless, this is the seasonality time when gold and silver usually go up. You'd probably get a better price in late April or early May right before the summer doldrums hit. So, why sell now for a price that isn't agreeable to you?

I will agree though that you probably won't get spot for 90% junk silver. But, it is up to the individual to do the research to find out if the gap between sell and bid is tight or large, and if the market is going up or down. These things can change daily. But, seeing as we are in a long term bull run, why sell now for less than what you want or think you should get? It just doesn't make sense to do so.

And like you can shop around and find a dealer offering what you want, the store dealer doesn't have that option. All he can do is sit there and wait for a sucker to come along and sell for less than what he should be getting. So, be diligent.

 

Silver - Yes I totally agree that people should shop around and get their best price.
I thought you were saying that we should do something like a strike or picket and not sell to anyone until people give you full spot prices.
Sorry for the confusion.

 

Premium to spot even with 90% coins? They have 10% impurities that have to be refined out, which would cost money. It was said earlier that 'spot' is for a 1,000 oz bar (.999 of course), so anything less could expect to fetch less than spot.

 

Isnt that just like a pawn shop:secret:

 

Correct, a 1000 ounce bar. So, if I wanted 2750 Ben Franklin half dollars......don't you think I'd have to pay more, since I'm getting 2749 more "things" than you are with that 1000 Ounce bar. Plus, mine is minted by the U.S. gov, has a $.50 value as legal tender, and has neat artwork on it......Wow, Ben Franklin and the Liberty Bell!

 

The point is that coin silver is one of the highest and best uses for the metal. It makes no sense to melt something from a more valuable to a less valuable state unless there is no other option. This isn't widely understood at present, and the result is the market discount. Besides, the "impurities" are actually copper, and are not worthless. So 1,293 morgan silver dollars, or 5,530 silver washington quarters would be more valuable than the single 1,000 ounce bar even when you exclude or ignore the numismatic premium. But as I said, your viewpoint is the more common one because the idea that coins exist to ultimately be melted is the more prevalent one. It may not always be that way.

 

These days with all the hype of "investing" in gold and silver, the impurities do not make any difference to someone who just wants to add to their portfolio. If a bigtime dealer/ buyer/ wholesaler gives you these reasons for shooting you a lowball price on your 90% silver, tell them you will find someone else to sell it to for a fair price. It won't be hard to find that individual either! These big advertizers didn't pay for their commercials by paying a fair price on precious metals.

 

So true. I had one dealer actually tell me that he had connections with smelters and if I sold my 90% junk to them, they'd just turn around and sell it back to him. He suggested cutting out the middle man and going right to him. I asked if he'd give a better deal then the smelter, and he assured me he would.

Of course, if there is a shortage of silver and it is greatly needed, this might not be true.....but then you'd expect the price for even 90% junk silver to be astronomical.

 

Thanks for the explanations of the last few posts. I have a much better understanding of the dynamics of the .90 vs. .999 pricing.

I would never want to see silver coins melted. If I was going to invest in some silver, it would be with junk coins.

 

I was just wondering if there is a better term for "junk silver." I don't consider any 90% silver coin to be junk. Obviously a coin collector like myself did not coin this term (pun intended).

 

I agree. And so my mind was busy...

If ASE's are also known as Eagles, then junk silver could be:

OWLS (old, worn, loose silver)

I should go to bed now.:whistle:

 

You sound like a buddy of mine. He hates when I call it junk silver. Now I am always searching for a better term, but always end up using the term junk silver. I think most people, collectors anyway, understand what you are trying to say. The term is like an oxymoron.

 

If you are buying 90% silver coins that are in XF or better condition, I wouldn't call it junk. But, if you are buying XF pre-1965 coins for bullion prices, please let me know where. I consider it junk when it looks like, well, junk. I should learn to post pictures and show you some of the coins I bought...you'd probably consider them junk as well. But, for just a $.25 premium over spot, who's complaining.

But, a nice XF pre-1965 silver coins isn't junk....and it usually also doesn't sell for bullion price.

 

I ususally refer to it as "coin silver."

 

I would estimate that at least 90% of all 1960 to 1964 silver US coins in existence are in high XF to BU condition, and if they are not some rare variety, mint error, or high-MS quality, they are definitely only valued for their silver content - hence the highly accurate description of JUNK SILVER.

And yes, they sell for bullion prices if you buy them by the bag...

 

How about coins with numismatic value be referred to as "collector grade silver," and low grade or 1960's silver be referred to as investment grade silver? I know I'm reaching a little here, but when I hear the word junk, I think of a rusted out beater car that smokes, rattles, and is a safety hazard to other motorists.

 

I have been thinking of getting some junk silver (or coin silver). Where would be a good place to buy in order to get the best prices? Is it best to buy $100 bags if you can?