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<p>[QUOTE="desertgem, post: 3429894, member: 15199"]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</p><p>"absurd the statement sounds to someone who actually understands how that whole market operates."</p><p><br /></p><p>And since he does, best wishes to him with his bullion operation.</p><p><br /></p><p>If you are interested, this is likely the most easily understood discussion by the Perth Mint.</p><p><b> Bullion Dealer's Spot Price</b> in the second URL in post on page 6</p><p>_________________________________________________________________________</p><p>"So how do bullion dealers selling to customer set their spot price? They do so by considering the following factors into account:</p><p><br /></p><ul> <li>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.</li> <li>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.</li> <li>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.</li> <li>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.</li> </ul><p>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.</p><p><br /></p><p><span style="color: #0000b3">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.</span></p><p><br /></p><p>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"</p><p>_____________________________________________________________________</p><p>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.</p><p><br /></p><p>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[/QUOTE]</p><p><br /></p>
[QUOTE="desertgem, post: 3429894, member: 15199"]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. [B] Bullion Dealer's Spot Price[/B] in the second URL in post on page 6[B][/B] _________________________________________________________________________ "So how do bullion dealers selling to customer set their spot price? They do so by considering the following factors into account: [LIST] [*]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. [/LIST] 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. [COLOR=#0000b3]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.[/COLOR] 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[/QUOTE]
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