Don't buy at these premiums, are you nuts?!

Discussion in 'Bullion Investing' started by myownprivy, Mar 19, 2020.

  1. myownprivy

    myownprivy Well-Known Member

    I know, but it's so hard. Look around us? College kids are still going on spring break. People of a certain political party think this is a hoax. People typically of the other political party refuse to heed doctors' advise because they know better. There are a lot of stupid and selfish people all around us.
     
    ripple likes this.
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  3. losthomer

    losthomer Active Member

    What you describe is day trading. I suspect most people here have longer time horizons.
     
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  4. myownprivy

    myownprivy Well-Known Member

    Selling bullion on a short term basis is not wise. I simply provided a basic example that could hopefully make sense to even the dullest tool in the shed.
     
  5. -jeffB

    -jeffB Greshams LEO Supporter

    There's an old saying that "you catch more flies with honey than with vinegar".

    Unfortunately, some people go on to rationalize that they can catch ALL the flies with manure.
     
  6. Santinidollar

    Santinidollar Supporter! Supporter

    Hey, gang. It’s still too early to go stir crazy. Plenty of time for that later!:wacky:
     
    ripple likes this.
  7. TheFinn

    TheFinn Well-Known Member

    Bullion dealers are not unethical. There is a thing called "replacement cost". If I sell silver at $13/oz., but it costs me $16/oz. to replace my inventory, then am I unethical to sell it for $18?
    No. Just the truth.
     
    CoinHawkeye likes this.
  8. baseball21

    baseball21 Well-Known Member

    Being one no it doesn't you unethical. Far to many are with what they say
     
    slackaction1 likes this.
  9. slackaction1

    slackaction1 Well-Known Member

    Its just messed me up I know I not as fluent as you all but.. these premiums got me frustrated.. I was buying rolls of quarters for 115.00 to 120.00... halves were more when silver was 16.00. now when silver dropped to 12 or whatever it is now.. the prices went straight up.. prices now since silver dropped
    Roosevelt Dimes (65 per roll)

    Mercury Dimes (75 per roll)

    Barber dimes 85.00

    Washington Quarters (145 per roll)

    Franklin halves (157 per roll)

    Mixed halves (157 per roll)

    10 oz prospector bar (210) SO THE DEALERS SHOULD BE HAPPY AS ALL GET OUT WHEN SILVER DROPS.. IF SILVER GOES UP THE PRICES DROPS CAUSE PREMIUNS ARE LOWER.. ALL THIS TIME I WANTEDS SILVER TO GO DOWN AND MAN I WAS TOTALLY OFF BASE THOUGHT I COULD AUCTUALLY BUY SILVER FOR 12.. VERY HARD LESSON BUSTED MY ENTHUSIAM OR HOW EVER U SPELL IT.
     
  10. -jeffB

    -jeffB Greshams LEO Supporter

    Yeah, I just had a look at recently completed BINs on eBay. People are still buying rolls of dimes for $75. I found one roll of 1964 Kennedy halves that went for a bit under $110 shipped, but everything else had gone for 12x-14x FV, or even more.

    If I were looking to buy, I'd look for Best Offer listings, make offers, and expect a lot of rejections. It may take a good long while before people give up and start letting stuff go closer to spot.
     
    slackaction1 likes this.
  11. TheFinn

    TheFinn Well-Known Member

    Used car dealers, lawyers, politicians...
     
  12. baseball21

    baseball21 Well-Known Member

    Hard to tell most of those apart from metal bugs
     
  13. CaptHenway

    CaptHenway Survivor

    I was going to write a long dissertation on "The Law Of Supply And Demand" here, but I decided it was not worth the trouble.
    Classics Illustrated version, for a market such as Precious Metals where previously sold goods are welcome so long as not damaged:

    Within an equilibrium range market, the amount of product being offered by producers (mines) plus the amount of product being sold back into the market by previous buyers (private citizens) is approximately equal to the amount of product being purchased by industrial users (jewelers, catalytic converter makers, Kodak back when cameras created images on silver-backed film) plus the amount of product being purchased by private citizens. Result: reasonable premiums taken or charged by middlemen.

    Within a bull market (prices up substantially) some to many to all buyers stop buying, but sellers try to dump on middlemen. Result: super low to negative premiums.

    Within a bear market (prices down substantially) some to many to all sellers stop selling, but buyers try to take advantage of low prices to buy. Result: middlemen cannot get product unless they pay reluctant sellers huge premiums to sell their product. These huge premiums must then be passed on to anxious buyers.

    Saw all three markets while working in Chicago coin shops. You cannot pretend the current market is not the current market.
     
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  14. MeowtheKitty

    MeowtheKitty Well-Known Member

    Meow spent the money Meow was going to buy silver with on SLV.
     
  15. Santinidollar

    Santinidollar Supporter! Supporter

    Meow and Santini think alike. Likely I’ll do likewise with the GLD ETF.
     
    MeowtheKitty likes this.
  16. GoldFinger1969

    GoldFinger1969 Well-Known Member

    Why doesn't SPOT rise to the price including the premium ?
     
  17. baseball21

    baseball21 Well-Known Member

    You definitely know that answer :p
     
    GoldFinger1969 likes this.
  18. GoldFinger1969

    GoldFinger1969 Well-Known Member

    Actually, I don't....unless it's because this is a temporary short-term issue of not being able to produce ingots and/or coins at any price because of non-supply/demand things like the virus (in the past, I think shortage of blanks might have led to a similar situation).
     
  19. baseball21

    baseball21 Well-Known Member

    No matter what spot is there will always be a premium unless spot has included that in which case buying and selling will always be below spot. The mints generally sell to very few people in large locked prices to make money, the distributors do it to make money, so do the end commercial sellers. Spot could be 1 dollar and theyd all want a profit or 50 and same thing.

    Basically we either have a premium over spot or spot is the premium and buying and selling goes under it.
     
    GoldFinger1969 likes this.
  20. GoldFinger1969

    GoldFinger1969 Well-Known Member

    But as I understand it right now, the premiums are abnormally high because of non-market forces (i.e., The Virus). You can't even get raw/bullion gold or silver at the quoted spot price.

    LCS's are shut....monthly coin shows (and bigger regional/national ones) are shut or will be shut....basically, you have only online auction sites like Ebay and HA.

    I've been to shows in recent months where you could buy ASE's at spot, sometimes a shade below or above. No proofs, no slabs.
     
  21. baseball21

    baseball21 Well-Known Member

    Many of the sellers like to hold their prices when spot goes down, same thing happened after the last spike. Obviously holding previous prices or trying to market it for higher prices increases the premiums, then they average out again when they can't sell there anymore.

    If you look at it in the past when premiums are skyrocketing thats when you run from physical bullion
     
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