I buy my silver from an online company. They have had great margins on silver, far better than the bigger "PM Exchange." However, recently their margins have risen quite a bit from where they were. Could it be a supply problem from the stampers? Could it be demand pull pricing? I'm not seeing any shortages on anything, so I wonder why the bump up in margins all of a sudden. You'd think given it takes less capital to move a pallet of silver through the shipping department than it did two months ago the margins would be fine.
Most margins are put in place in response to volatility. The Hunt brothers were not "done in" by "the man", the market had good reason to be concerned about the spike in volatility and responded by raising margins. Its been a pretty steep drop, and still dropping. I am guessing that is the reason for increased margins. Back when silver was $4 and didn't change for years margins were extremely low, but that was more a function of low volatility than absolute prices.
Hi folks, Margins increase and/or supplies get tight - when the paper price of bullion diverts from the perceived street value. It happens whenever there is an artificial price. Remember when Nixon froze the price of gasoline? All of a sudden everyone was out. How about a few years back when we hit the liquidity trap? Mortgage rates were down below 4% but bankers weren't lending money. "Sorry, Sir. We're all out. However, if you want to pay 6% I might be able to find something." Right now paper bullion prices are extremely depressed due to a lot of commodity market forces - strong dollar, etc. Folks that deal in physical bullion aren't buying it. peace, rono
I use SD Bullion to purchase my silver. Their margins have gone from 99 cents on generic rounds to 1.49 a week ago. Today, they raised them again to 1.99. I wonder if the stampers aren't raising their mint charge.
Silver fell hard again yesterday. Volatility spiked, so margins rose. Give it a little time and if the price of silver calms down then margins will likely return to normal. PM margins actually seem to normalize quicker than other commodities like oil, grain, meat and lumber.
