Silver Bullion vs Gold Bullion as an investment

Discussion in 'Bullion Investing' started by masterswimmer, Mar 8, 2019.

  1. Tokens

    Tokens Member

    The point here is, you're not telling the truth when you make a claim about a bullion wholesaler selling under spot. It's a fabrication.

    It's objectively not true. Something you just made up, not realizing how absurd the statement sounds to someone who actually understands how that whole market operates.

    Which is why, quite simply, if you're asked to provide who it is, you'll do everything but. You'll reference google searches, other posts, you'll create theories as to why 'maybe it might be true' but you won't simply substantiate the claim with evidence.

    Because your claim is not true.
     
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  3. SLACKACTION

    SLACKACTION UNION REPRESENTATIVE

    Hey Token... Did you get beat up every day after school? jus wondering.. BLIND NOTE:: DOES MESS WITH THE MODS...The Boss may not always be right..but he always the Boss..
     
    Randy Abercrombie likes this.
  4. Santinidollar

    Santinidollar Supporter! Supporter

    He’s why the ignore button was invented.
     
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  5. mpcusa

    mpcusa "Official C.T. TROLL SWEEPER"

    Do your own research, and always tell the person in charge that
    he,s right, even if you think otherwise, getting along 101...LOL
     
  6. desertgem

    desertgem MODERATOR Senior Errer Collecktor Moderator

    Slack, Leave the poster me out of the moderator me. Some people think they buys the groceries at the price the farmer got for them if he wants. If it wasn't a real secret I would tell what price the mining company 45 miles away gets per ounce when they deliver to the refinery in Nevada.

    Jim
     
  7. myownprivy

    myownprivy Well-Known Member

    I don't think it's unreasonable at all to pester the staff to reveal information about where to buy under spot. I don't think it's unreasonable to not reveal the information, either!

    My understanding is mints (or deep pockets) may buy contracts to get silver delivered at a particular price. That price will be under spot, as spot is the market price for an ounce of silver, not the mined cost of an ounce of silver. That price is determined at the time of sale, not the time of delivery.

    The purchasing party may then refine that silver, mint it into bullion or coins, or resell it on paper. If turned into bullion or coins it will be priced at the spot price at that moment.

    Am I missing anything here?
     
  8. desertgem

    desertgem MODERATOR Senior Errer Collecktor Moderator

    No, one can ask and if not answered, just say thanks for the answer. and continue to believe what one wishes as one is sure they are the absolute answer. As the poster said
    "absurd the statement sounds to someone who actually understands how that whole market operates."

    And since he does, best wishes to him with his bullion operation.

    If you are interested, this is likely the most easily understood discussion by the Perth Mint.
    Bullion Dealer's Spot Price in the second URL in post on page 6
    _________________________________________________________________________
    "So how do bullion dealers selling to customer set their spot price? They do so by considering the following factors into account:

    • The spot/futures price may change in the time between committing to a price with their customer and executing a deal with their OTC counterparty or futures market broker.
    • OTC and futures markets are wholesale markets (trading in "lots" of 1,000oz and 100oz of gold, respectively) whereas a dealer's retail customers will be buying in much smaller amounts. This means it may take some time before they have accumulated enough ounces to execute a deal, during which the OTC/futures price will change.
    • The dealer may not be quoted the Reuters or Bloomberg screen price when trying to lock in a price in the OTC market, especially when the market is moving quickly and bullion banks are not updating their prices into those information services quickly enough.
    • For futures trading, the dealer will be charged brokerage fees. For both futures and OTC trading there is also general costs of employing dealers and settling trades.
    The way bullion dealers manage the above factors is to add a margin (or buffer) to the spot or futures price they see quoted. How much they add and how often they will change their spot prices depends on how volatile the wholesale price is and how much buying or selling their clients are doing. This changes dynamically during the day and will also vary between each bullion dealer. Note that this spot price margin is in addition to any fabrication premium.

    The result is that you will find each bullion dealer quoting different spot prices. This can be confusing to first time investors who are used to, for example, a single price for a company's stock on a single exchange. It often leads to questions about whether they are being quoted a "fair" price.

    The only way to know if you are getting a fair price is to do what bullion dealers themselves have to do, which is to shop around and see who is offering the best price at that time and take it. In doing so, you become part of the huge, opaque precious metal market “network” of over-the-counter traders"
    _____________________________________________________________________
    Notice it says 1,000 oz bars silver at the top level and what is left out is safe delivery fees , the amount the refiners will also have to add to melt it and cast into the forms to sell such as coins or smaller bars to sell OTC to normal end market customers. The company selling also has to have a cost to maintain their own staff, owners, taxes, etc. IMO.

    I am sure some will interpret this how they wish and that is fine, let them explain their idea. The main thing. Thank you for the tone of your question. Jim
     
    spirityoda likes this.
  9. Tokens

    Tokens Member

    Your claim was that there was a bullion wholesaler who, as a function of their business, sold under spot.

    You applied an infantile grasp of the wholesale/retail dynamic from, say, a grocery store and assumed that must apply to comex delivery.

    The bottom line here is you lied; you made a false statement, and there's no amount of specious theorizing, abstract riffs or "links" that can extinguish them. This is why you simply don't name this mysterious wholesaler and instead, just provide your own personal theories on markets you don't understand.

    The amusing thing is, you're vastly more likely to encounter a RETAILER selling below spot than a wholesaler (where the margins are ridiculously small), particularly in market conditions where there have been big rips and their cost basis is low, or near tops when prices are high but the buyers start to dissolve. A wholesaler below spot would present an instant arbitrage opportunity and would be drained of all the physical metal they had, instantly.

    The idea that someone is wholesaling precious metals meaningfully below spot (beyond short term shifts on options contracts) as a default function of their business is as absurd a statement as my saying I have a "secret retailer" who sells me gold coins for half off spot. You just don't realize how absurd it is, because no amount of linking to webpages hides the fact that you don't understand the market dynamics, so you've fallen into the classic liars trap of saying something blatantly untrue that may sound plausible to other ignorant parties, but is laughably absurd to someone who isn't.

    That the side is 'moderated' by someone who does this... says a lot about the site.
     
    Last edited: Mar 24, 2019
  10. SLACKACTION

    SLACKACTION UNION REPRESENTATIVE

    You been here a week and your going to call some.. (ignorant parties) and then laugh...…….. but after reading your last remark... looks like your out of here...…………………….TY SLACKACTION
     
  11. twoshadows

    twoshadows Member

    I actually prefer the smaller 1/10 oz gold coins if the need arises to sell they would move much faster than larger gold or collectable gold. While I do have a little of everything I find purchasing smaller gold is easier on the old wallet.
     
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  12. twoshadows

    twoshadows Member

    I keep hearing all these stories about all the monies lost in gold and silver? I know exactly what I paid for every piece of gold and silver I own and the only way I can lose money is by selling it for less than I paid? Any investment should be considered as long term and if your not willing to wait on your sell price you should not be buying into any kind of investment. On the flip side I have a son who owns a lot of Apple stock and he always said if it ever doubles I will sell. I told him if that time comes at least sell half of it, get your initial investment back, and the remaining stock will be all profit regardless when you sell it. He agreed but did NOT sell when it doubled as greed sat in, Apple stock dropped, and he lost thousands of potential profit. He still has the stock but missed the opportunity to get all his investment back while retaining nothing but basically "free" stock to play with in the future. One must set a goal and STICK with it!
     
  13. Clawcoins

    Clawcoins Well-Known Member

    I can't wait until we mine asteroids/comets.

    You can easily buy bulk silver well below spot. You'll just have to separate it from stone and refine it and make your own bars. :)
     
    spirityoda likes this.
  14. Randy Abercrombie

    Randy Abercrombie Supporter! Supporter

    I have sold PM’s twice. Once for a dream guitar and once for some engine work on my old hot rod. Neither was a huge amount of cash though. I cashed $900.00 in silver for my guitar and $1300.00 in gold for my engine work. Both transactions were no fuss, not a problem at all. And in both cases I expected and offered up front 10% below spot so my guy could realize a return...... I believe the important factor here though is that I have a long relationship with my guy and have purchased from him far more than I sold back to him..... So in my case the answer is no, I had no issue at all exchanging PM’s for liquid cash.
     
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  15. mpcusa

    mpcusa "Official C.T. TROLL SWEEPER"

    It,s an easy process as long as price is negotiated and fair, having a relationship
    Does help tremendously with the guy your selling to :)
    I have been buying from my local guy here in Henderson for years 10 OZ
    Silver bars and ASE,S and rounds, but when its time to sell, i know i can
    Count on him to give me a good price.
     
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  16. myownprivy

    myownprivy Well-Known Member

    What?! Why would you do that? What was the gold and silver?

    There is no reason to sell for 10% under. Were they generic silver bars and junk silver? If so, 10% under sounds about right. But if we're talking silver Eagles, Maples or other gov.-issued 1 oz coins, that is not acceptable to be paid that low.

    But 10% under for gold is not ok. Most gold traded at coin shops will not be generic, because people just don't buy as much generic when it comes to something at that price point. So are you talking gold Eagles, whole or fractional? Those should be bought at spot or OVER spot, not under.

     
  17. Randy Abercrombie

    Randy Abercrombie Supporter! Supporter

    I get it. And in my business I am brutally stringent with expenses. But this stuff is my fun money. The bulk of my gold was purchased in the 1990’s. Suffice to say I did well. Probably broke about even on the silver rounds. And biggest thing is that given the relationship I have built with my dealer, I am the first guy he calls with killer deals. So it goes both ways, really. One less than perfect deal for me comes back to me on future business Tenfold. And fact is, I stress entirely too much over business expenditures. I refuse to stress over my fun monies.
     
  18. myownprivy

    myownprivy Well-Known Member

    10% under makes perfect sense for the silver rounds.

    But what was the gold? I am trying to imagine the possibilities of what you could have sold to lose 10%.

     
  19. Randy Abercrombie

    Randy Abercrombie Supporter! Supporter

    And besides.... When a 1959 Precision bass custom built by a world class luthier comes available at $900.00...... Losing 10% on some silver rounds becomes very unimportant!

    E9A988B7-82AC-4A9A-BA44-CDC2600C473E.jpeg
     
  20. Randy Abercrombie

    Randy Abercrombie Supporter! Supporter

    It was an raw BU St. Gaudens that should have brought upwards of 1450.00 at the time.
     
  21. desertgem

    desertgem MODERATOR Senior Errer Collecktor Moderator

    Randy value isn't always measured in monetary terms. It often takes one's whole life time to understand that. Lucky are people who do early enough to enjoy the trade. You did well! Jim
     
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