Dealers Changing their Sell and Buy Back Prices

I started investing in Silver back in January of this year. I went in pretty Naive and bought from an LCS that sold me 80oz of silver at $2.00 over spot when it was $14.27. He said his buy back was $2.00 under spot. I joined some coin clubs started going to coin shows and found much better options. For a couple of reasons I sold those 80oz when spot was $17.50. That was at a coin show and the dealer paid me spot. I was happy and I made a few bucks. I have been purchasing silver still and am well over the silver oz mark that I made my first purchase from. I thought I found the right dealer last month when I purchased a tube of Rounds and some 90%. He said he would buy back at 20 cents under spot and he sells rounds at $1.25 over spot. That was very close to what I could do online and I thought I would use this dealer as my go to guy. Hoping that I could get even better deals if I used him exclusively. Well Then some things happened that I don't understand. Spot was $19.52 a few weeks ago and he sold me some 90% at $14.5xFace. I went in yesterday to buy some 90% and spot was $19.13. He tried to sell me at $14.75xFace. I was kind of upset. I understand market conditions and supply and demand. He said he has a lot of stock right now. That makes sense. But for the future does anyone have any insight on how dealers change their buy and sell rates. When silver is hot what happens. When it drops low what happens? I am tempted to bail on this dealer and just go back to doing business with Online Website where rounds are 99 cents over and sometimes better and they buy back at spot. Only drawback is while selling back it has to be over a $1,000.00. I want a more flexible option to sell back at.

 

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Thanks ToughCOINS that explains it all. I think I will go back with my online site to sell back too. The'yre always buying rounds back at spot and buying ASE's at a nice premium.

 

Thing is, this guy says he specializes in bullion.

 

His spread is $2.25. A few weeks back it was $1.45.

 

Just like you - he is trying to make money. He's also trying to make sure that you don't make the money he should. It's a competitive game when you have a commodity and multiple venues.

 

Well, I'm learning. Hopefully not the hard way. My average cost per ounce right now is $17.09. Still a $2.00 spread. I have some ASE's and Superman Maples that will give me a little extra boost when I sell. I might need a cash infusion next month so I'm hoping a good time to sell will arise.

 

But for the future does anyone have any insight on how dealers change their buy and sell rates. When silver is hot what happens. When it drops low what happens? I am tempted to bail on this dealer and just go back to doing business with Online Website where rounds are 99 cents over and sometimes better and they buy back at spot. Only drawback is while selling back it has to be over a $1,000.00. I want a more flexible option to sell back at.[/QUOTE]IMHO silver is a very long term play if you are trying to make money buying and selling generic silver or 90%. Buying and selling from month to month in silver is like being a day trader in the stock market.

In a falling price market like we have had for the last four years until recently, the silver you buy today is almost always going to be worth less in a week. There are flucuations that occur where you could make a half a point to a point but they are rare and in-between.

Be aware of the historical record of silver prices. See where they have peaked at and how they stayed at that high point. Look at the lows and where the price was 8 to 10 years ago. There is a very nice gap there but you would have to have bought at the lows and then held 8 years to cash in. If only we had some way to know where the next highs and lows are you could really cash in but of course we are only guessing.

Even now when we are finally beginning to see the beginning of an upward market, please, please, to buy silver this month and expect to have to sell it next month for your cash flow is just not a good move. As you have noticed silver still jumps around from a half point to a point in a very short period of time.

I have been in the game (and that's what it is only we don't know the rules) for three and a half years and haven't sold any of the generic silver as my LCS won't even touch it. He deals only with ASE's, Maple Leafs and occasionally Philharmonics. In fact the only thing I have sold is one tube of ASE's that I was lucky enough to buy at 15.00/oz. If the price ever gets to the over 25 range I will consider selling a little more but it would have to be 30 or more to get me to sell a lot.

 

Edit: just realized the above post had my quote in it.

 

If we are in a true bull market where the price has consistently been going up then buyback prices will be better because dealers expect that they will be able to sell at a higher price and make their profit. Rising prices will also bring new buyers into the market so that there is a greater turnover in inventory. To a dealer a large inventory is just like it is to you and me. It isn't making any money until you sell it.

 

I think that's what I am running into. Dealers seem to be pretty cautious right now. Silver dipped below $19.00 today. It went back up to $19.20. I'm not going to sell for a cash infusion, I don't need to it was just a thought. I'm going to put my silver in deep storage and forget about it.

 

I have discussed this dilemma with a friend who also stacks and the best solution we came up with was to buy a table at a show. The next show you go to ask around what the dealers are asking for their junk. Then undercut them slightly and it will fly off the shelves. There are always people looking to buy 90% face and I personally think you will net more than any sale to a dealer as you can charge a premium. Now this of course is only a really viable option if you have bulk as the cost of a table would not be worth it.

 

I thought about this but the cost of tables at shows near me wouldn't make it worth it due to how much I have. I do have one option and that's my coin club. I can get a table for free and auction bullion off. I could undercut there. Thanks for the idea!

 

No Problem! Cash is always king : )

 

I'm going to a coin show today and there will be dealers I do business with there. I am going to be frank and ask them to give me info on premiums when silver is hot, cold, and in between.

 

Let us know their reply! Please...

 

At a coin show right now. Found dealer buying rounds at spot and ASE's at $1.50 over spot. Tempted to sell.

 

OK, so I didn't sell yesterday but was happy to find a dealer who held his buy back pricing. All the other guys were buying back at atleast $1.00 under on rounds and 50 cents over on Eagles. Even the refinery guy who I sold some silver too was buying back at 80% of melt. He was buying back at 96% of melt a few months ago.