What do dealers pay for Silver Eagles from the Mint?

Discussion in 'Bullion Investing' started by cphine, Oct 31, 2009.

  1. FryDaddyJr

    FryDaddyJr Junior Member

    Sure as long as you get to cherrypick the 5 years
    masterswimmer likes this.
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  3. midas1

    midas1 Exalted Member

    Cherry pick? Due diligence? Yes.

    I own every investment I've listed.
    Invest in what you know. I retired after a career in IT.
    I bought Home Depot and the S&P index fund for diversification.

    BTW, Apple $116.47 $267.10
  4. midas1

    midas1 Exalted Member

    I could've gone back 10 years which = much more gains. Over the long haul stocks win out.
    baseball21 likes this.
  5. Michael K

    Michael K Well-Known Member

    Home Depot is down 11 points today. Good thing I bought it at 27.
    midas1 likes this.
  6. midas1

    midas1 Exalted Member

    it's up 39% for the year. will probably bounce back some later today.
  7. myownprivy

    myownprivy Well-Known Member

    I'm not sure how this thread got on to yet ANOTHER subject, besides that someone decided to post in a very self important way about a topic that this thread has nothing to do with: stocks vs PMs. Take that nonsense somewhere else and start your own thread or find one that already discusses the subject.

    In response to this thread, to get us back on track, allow me to summarize what I believe to the situation:

    1. Large dealers place ASE orders from the US mint for the upcoming year. They place this order when they believe silver is a a currently low price, giving themselves more space to make profit when silver goes up and they sell their Eagles to their customers.
    2. Dealers pay the US Mint a lower (underdetermined) premium for the Eagles than they will sell them for. What is this amount?
    3. Dealers make money on Monster Boxes of Eagles by sending in nice examples for grading, allowing profit on ms70s.

    Today, dealers are selling forthcoming 2020 Silver Eagles for $20.53 while spot is $17.20. That is a premium over 16%. Outrageous! Anyway, what is the premium they pay? We still haven't answered that. But I think we can speculate it is much smaller than 16%.
    ripple likes this.
  8. Derek2200

    Derek2200 Well-Known Member

    Not outrageous at all. I pcice slabbed MS69
    ASE won on the bay at cost plus $10 for shows I setup at lol. Strong sales.

    no free ride in numismatics
    Last edited: Dec 9, 2019
    ripple and GoldFinger1969 like this.
  9. GoldFinger1969

    GoldFinger1969 Well-Known Member

    Yeah, but what if silver is in a multi-year decline ?

    How do you make money then ?
  10. slackaction1

    slackaction1 Supporter! Supporter

  11. GDJMSP

    GDJMSP Numismatist Moderator

    Some of them simply don't buy, and of those that do sometimes they make less, sometimes they break even, sometimes they lose. Just like in all markets - there are no guarantees.
  12. Revi

    Revi Mildly numismatic

    I got bored with bullion and even junk silver a while ago. I like to buy what I call "mildly numismatic" coins. For example a walking liberty half dollar goes for about a buck higher than a Franklin for example. I usually get them for the same price, so I always pick the older coin. In a few years they may be worth even more, depending on how things go.
    ripple, Chasinva69 and GoldFinger1969 like this.
  13. Derek2200

    Derek2200 Well-Known Member

    Not sayin lol.
  14. Chasinva69

    Chasinva69 New Member

    "semi-numismatic" bullion is really a thing. I've been dabbling in it lately. I agree the plain bullion and junk silver is pretty boring.
  15. Sting 60

    Sting 60 Well-Known Member

    I thought I would revisit this thread because I am amazed at what some friends of mine are paying for American silver eagles. Today's silver spot is $22.79 and I gather, from what I've read, dealers are paying less then $5 dollars over spot from the mint, unless I'm wrong. So best prices I've seen out there is $37 plus shipping or $8 dollars on a 2023 silver eagle. I would just like to say that I have not, since 2021, bought any silver eagle from the mint, and never will in the future. Wow, look at the kind of coins that can be bought for that price that are so much more exciting to look at and appreciate for the history of the hobby. Rant done, regards.
    jamor1960, Jeffjay, eddiespin and 3 others like this.
  16. Nate Flannery

    Nate Flannery New Member

    Yep! On Nov. 19, 2019 Gold was around $1,520/oz. and just 7 months later (due to COVID) it hit a record high of $1,972. This was one of the fastest and biggest run-ups in gold in modern times. But it was only up about 30%, and it dropped back down to below $1,800 by November 2020. For the next year gold traded between $1,900 and $1,700. In March 2022 Gold made a new run-up close to its previous record high ($1,953), and then dropped like a rock down to almost $1,600 by Oct. 2022. Then inflation kicked in and gold set a new high of over $2,100 c. Dec. 2023.

    So, if you put all your money in gold in Nov. 2019 (pre-COVID) at $1,520 and have held onto it for over 4 years, you made a 73% return. That may sound good, because IT IS! But buying gold in 2019 was probably the best timing EVER to buy gold, and we will probably not see returns like we have seen during the past 4 years for many decades. And that will only happen if gold drops below $1,500 first.

    However, if you had just put your money in the DOW Jones ETF (DIA) on Nov. 18, 2019 at $280.27 (28,027 on the DOW Jones), waited through the "COVID Crash" in the stock market, inflation, Jerome Powell saying there will be "pain ahead", interest rates going up faster than we have seen in 40 years, and held your position for the last 4 years until today (Dec. 28, 2023), you would have made 74.3% PLUS an annual dividend of about 2%-3% EACH YEAR. So that's a minimum of 2%x4=+8%. Add that to 74.3% and your return would have been 82.3%!! AND, this has been the hardest 4 years to navigate the stock market since the financial collapse in 2008. But DIA doesn't require "navigation." It just moves 1 to 1 with the DOW Jones. So you can buy it and forget it. And did I mention it is FREE to buy AND sell!!

    In addition to all that, EVERYBODY forgets to include LIQUIDITY as one of the WORST things about owing physical precious metals. How "liquid" an investment is, is determined by the ability to sell an asset quickly without taking a significant loss. Gold and Silver are both pretty ILLIQUID investments. If you buy a 1oz Gold coin right now and try to sell it the next day, the SMALLEST LOSS you will incur is about $120! Ouch!! Guess how much of a loss you immediately incur when you buy a stock or ETF? $0.00000000!!! NOTHING!!

    And if you still want to do gold, GLD is a great ETF. You can buy about 11 shares for the price of 1oz of gold for NO FEE! And you can sell it 5 minutes later, sitting at your desk in your underwear for FEE!! This is called a VERY Liquid investment! GLD is extremely liquid by definition, physical metals are not. And as my "Regan Republican" Grandfather said many times, "gold don't pay dividends." Stocks do.
  17. Nate Flannery

    Nate Flannery New Member

    OOPS! My calculation was wrong for how much you would have made if Gold went from $1,520 (Nov. 19, 2019) to $2088 (today) the return is only 37.4% NOT 73%. So, you would have done TWICE as well if you had just stuck your money in the DOW Jones ETF - DIA. And you can sell almost immediately for FREE!
  18. GoldFinger1969

    GoldFinger1969 Well-Known Member

    Your post was excellent. I would add the following:
    • Gold historically has lagged stocks AND bonds because it doesn't have a dividend or interest component.
    • Only when one times the gold market or if one was lucky to buy a large amount before a huge, multi-year run-up (i.e., 1972, 1985, 1999, 2002, 2015) can one make decent $$$.
    • When using ROLLING TIME PERIODS -- which eliminates timing bias -- gold does horribly compared to stocks, bonds, and even real estate over longer time periods.
    • Even for trophy coins purchased at advantageous times the returns rarely exceed 10%. For many famous coins -- i.e., the 1933 Saint-Gaudens Double Eagle -- returns are mid-single digits for capital appreciation only. The Bass Proof Double Eagle (recently sold) is one coin that generated a stock-competitive return of 12% during the holding period.
    • If one is buying gold for disaster insurance, best to hold the actual metal rather than a paper ETF, even one in which the gold is custodian held. In addition, at least to those reading this post here, presumably you have an interest in coins...so why wouldn't you at least hold the metal in coin form, whether bullion, numismatic, or a combination of both ?

    That said....I do think structural demand and supply issues are both leaning positively for the rest of the decade. I think that gold can make a run at $3,000 by 2030 and maybe even more by 2035. Central bank, SWF, and other institutional and retail buying should support gold.

    Check out the increase in gold historically from 1 large country (India, see attached) and now add millions each year joining the ranks of the middle class in this 1 country alone. That is lots more retail demand and more central bank and other buying to support that boost. India right now is buying 800 tons per year...a huge increase from earlier in the century and DOUBLE what it was just over 20 years ago. Add in 6-8% GDP growth (?) for a decade and you can imagine what formerly poor people might spend their dollars/rupees on. And I'm not even mentioning the demonetization currency fiasco they implemented a few years ago.

    Indian Gold Consumption, 1850-1997.jpg
  19. Player11

    Player11 Bullish

    I see them as a long term hold for time being. Do make money on 69 and 70 pieces.
  20. GoldFinger1969

    GoldFinger1969 Well-Known Member

    Actually, if moderns are involved, you have to LIKE the coins if you are paying steep premiums for MS-69 and 70 coins.

    I've bought some, but no guarantee that future buyers will "pay up" when the coolness and newness of the coins fades.

    Plus...you have creeping population increases as more raws get graded and get top grades. Even on 5-ounce NCLT, you rarely find anything graded less than MS or PF-68.
  21. johnmilton

    johnmilton Well-Known Member

    The big trouble with silver is that it's bulky and takes up a lot room for the value. You can easily fill a safe deposit box and only have a small fortune. Gold is easier to store, but as you probably believe, it has less future potential.
    Player11 likes this.
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