Silver Coins-- Selling Prices?

This weekend a local (NJ/PA) coin dealer told me that silver coins were selling for 10x face, even tho the melt was about 86 cents.

He stated that the reason was because people are just not selling them, and there is increased demand because of the current financial crisis.

How are prices in your area?

Or is this silly spread everywhere?

 

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I Live in florida, this past weekend I paid 10.5 times face value for rolls of "junk silver" franklin halves. The dealers either chose not to sell bars and rounds at this time, or else they just don't have any!!

 

10X seems to be the going price these days. Coin prices have decoupled from the spot price -- for now.

 

That is pretty silly Frank. People are hording Franklin halves because of an imending financial crisis? Ahhhh, who will then by them over spot?

Ruben

 

The argument goes as follows...

There is a developing physical shortage of silver [for a variety of reasons]. Since the spot price comes from the futures market where most silver transactions are settled in cash, not bullion, it is distorted and artificially low.

Is it true? Maybe, maybe not. How can we know for sure? If it is, the spot price is the wrong price for junk silver coins.

 

My local coin shop dude said the smelters are paying a little over spot for scrap silver coins and he too quoted me 10 bucks on the dollar. He said he can't keep silver, it's just flying out the door. :goofer:

I just wish some older copper would come through the door. He never has any older copper.

Ribbit

 

A few of the coin dealers in my area say the same as above - people are happily buying over spot, the only problem is finding any at all!

 

I think that there was a run on selling when it hit the major high a few months ago and now that price is still fresh in everyone's minds and they don't want to sell at the current price, so it's creating a shortage on scrap coins. Plus, when it hit it's high, was during a period peeps were hurting for spare cash so I think a lot of peeps sold and then the special tax checks showed up and that fixed the cash shortage . . . for a while. If prices go above 15 bucks an ounce, I think peeps will be selling again.

Ribbit

 

Around here, (Southern Ohio), we're paying $1.80 to $2.50 over spot price for (junk silver). That's if you can find it. On another note, they are buying back the silver at $0.50 over spot. This trend seems to have changed from a year ago when they would dock you $0.50 and buy your silver back from you under spot price.

 

Ok here we go again.

I do suppose that it varies to some degree from location to location but in my area there is indeed a shortage of physical silver.

We are selling at 12X spot and getting it. I have seen some rather extraordinary amounts of silver (by my boss's standards) being sold.

We have a few regular customers/dealers that do a lot of running for us. It's usually to Chicago. The Saturday before last my boss was able to lock a price on 500 silver rounds. One of our guys drove to Indianapolis (an extra 150 miles one way to pick it up). He told us when he got back we were lucky to get it.

Last Saturday my boss locked into a "monster box" of 500 2008 Silver Eagles. We got them today. Finally an actual delivery. I believe he paid $4.50 over spot per coin. Usually about $1.55 over spot.
The same day he gave another regular $10,000 in cash to find "junk". The guy had a table at a show and the boss told him to buy what he could at 10x face.
He came through on Monday dropping off $1000 face that MY BOSS paid 10x for.

People aren't selling that much now that "on paper" silver is so much lower than a scant few months ago.

Now, dealers obviously don't want to sell at a loss. Can't stay in business too long doing that. Believe me on this one though folks - the supplies on hand are dwindling and people are paying a much larger premium.
It's spilling over into gold as well. 2-5% premiums on gold are now 10% or more.

Here's a good example.

http://www.tulving.com/goldbull.html#silver

I have consulted this site for years and NEVER seen it like this. Tulving sells physical product only.
I've seen his 100 oz Ohio Precious Metals bars sell out in less than a day.

People are doing a lot buying "on paper" but seriously doubt they can back it up in physical. If you buy and they tell you 8-10 weeks to ship what does that really say? They don't have it.

Personally, IF I had better funds and could find "junk" at 10x face I'd be buying a lot more.

 

I watched my dealer move 2000 oz. of silver last week at 14X spot, and he can't get enough of it to fill demand even paying 10-12X spot. Additionally I've watched gold move at spot +$200-250 an oz for maples, pandas, eagles, and krugs. And they are just going, going, going.

 

Just trying to follow the arithmetic, here, BQ. Spot = $11, let's call it. 2000 X $11 = $22,000. 14 X $22,000 = $308,000. You're talking 14 X face...not spot...right?

 

Sure, I agree that dealers don't want to lose money, but neither do investors!

So, why not pay more and they will be able to get some stock, but, instead, then they quote market price.
But, are more than willing to sell at the higher markups.

 

He has been Treashunt. Very little walking in the door these days so he has to find other sources and they are tight and margins high.
The last batch of "junk" from the show he paid 10x face so he could sell at 12x.

A guy walked in with 10 rolls of 1990 and 91 Silver Eagles and he paid $15 per coin. Way over spot and very unusual for a dealer. We NEEDED the silver.

I traded in a Krugerand a few weeks ago for junk. He gave me OVER spot for the Krugerand. Unheard of and not because I work there.

My advice to "investors" is to hang on to what you have and get more if you can. That's why we're selling it as fast as we can get it.

PS. I did find a few goodies in the bag of junk. The 23 SLQ, a few Barber quarters that I needed and yesterday plucked out solid 08-S and 15-S halves.

 

Hmmm... I have quite a bit of silver. I wonder if I should look into selling it. XD!!!!!


Yeah right!

 

Clembo:
If he is buying at 10X & selling at 12X that is a very fair markup.
Nice finds in the junk silver, by the way.

Were the SLQ's dated?

 

Unless he's operating out of a trailer, that 16.7% margin is barely covering his overhead. I'll add to your observation, he's probably turning over that inventory very quickly at 12X.

 

What? The spot market is the current market. The futures market is a market on CONTRACTS based on speculation of future prices. So you lost me here.

Are you saying people are buying the coins above spot to use as guarantees for the futures market? That would be equally stupid.

Joe has 100kilos of Silver at say a current value of $14 on the spot market and Joe makes a futures contract with Tony for 12/31/08 at $30. Now on 12/31/08 if the spot of silver is $38, Tony is a winning as gains 8 bucks a head and Joe loses $8 a head.

With the market now down, there is a lot of futures silver being brought at high prices. Why dump that silver on the spot market if you still think the fundamentals are for higher pricing?

You either hang onto it or sell it on the futures market is the price of those contracts are still high, and hope you don't get burned TWICE.

None of this has to do with spot selling/buying, or affects spot selling/buying.

Ruben

 

Which brings us back to, If your investing in coins your an idiot.

Ruben

 

Nope not a trailer. An old bank actually. Three employees on any given day for a start to overhead.
Eddiespin is seeing it the way it is. Silver is tough to get and flying out of the store. The ten rolls of Silver Eagles I mentioned earlier were long gone by the day's end.

I could be considered biased as I'm working at a shop but believe me I'm not. Dealers are getting a bad rap over this.
Just a few months ago there were hundreds of rolls of silver eagles in the vault. Go in there now and the crickets are chirping.
Dealers are scrambling. We call all over looking for the silver. We've locked into lots and had them "disappear".

The dealer that came through with the monster box actually acquired them in a trade.

Until the "paper traders" get called on it the physical dealers are the ones that look bad. I'd honestly like to see the "paper traders" take a hard hit. They are selling what they don't have.

My boss has been at this over 40 years and never seen it like this. EVEN when the Hunt brothers tried to corner the market.

Only bought one SLQ Treashunt and you saw it on another forum. 1923. 3 visible as well as 9 and a mushy 1 to the naked eye.
Boss charged a premium on that one. He shelled out $2.50. I gave him $4.