Why are the premiums for Platinum so high?

Discussion in 'Bullion Investing' started by myownprivy, Dec 12, 2018.

  1. myownprivy

    myownprivy Well-Known Member

    Will someone with more knowledge please chime in?

    I suspect the premiums are higher because the platinum metals are much harder to work with than gold or silver, so I suspect the process of minting might be more expensive. Is it?

    I know the mintage numbers for platinum releases are much smaller than gold and silver figures, so it makes sense the premiums are higher for the simple reason of smaller volume.

    Similarly, platinum is a much less popular investment than gold or silver, so numbers sold are smaller as well, so premiums are higher.


    I could potentially get interested in owning more platinum, but the buy back prices have the worst spread of all commonly traded PMs, so I avoid it. Why are buybacks so low?
     
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  3. V. Kurt Bellman

    V. Kurt Bellman Yes, I'm blunt! Get over your "feeeeelings".

    What makes you consider them low? What makes one low or high?
     
  4. Clawcoins

    Clawcoins Damaging Coins Daily

    Initial purchases have a wide spread.
    Even secondary purchases also have a wide spread. But, this also varies some. In the past I've found some non-Proof APEs somewhat close to spot, within $40 for 1 oz.

    The best you can do is to Make An Offer to someone selling Platinum on places like eBay. I've found PL owners are more stubborn than Silver or Gold sellers. Smaller market, less demand and less supply and a larger hope that the price will recover to over $1k.

    The online companies buybacks are low, but then they do that for any metal.
    It's just kinda the way it is ...

    Although I posted recently that online PL inventories have dropped like a rock when PL spot dropped below $800. There's minimal inventory out there and virtually squat fractionals on the bigger websites.

    I don't know anything about rounds or bars.
    have you looked at Palladium at all ?
     
  5. myownprivy

    myownprivy Well-Known Member

    What makes a buy back low or high is the price relative to the selling price. A buy back is low (and bad) if it is significantly lower than the selling price.
     
  6. V. Kurt Bellman

    V. Kurt Bellman Yes, I'm blunt! Get over your "feeeeelings".

    And that is the ONLY way I've ever found ANY of them to be, regardless of metal. That's why I say metals are HORRIBLE investments, per se.
     
    Last edited: Dec 12, 2018
    medoraman likes this.
  7. myownprivy

    myownprivy Well-Known Member

    A terrible short term investment, yes. long term? No, I think it's a great safety net.

    On Provident Metals a random year gold Maple Leaf is $1297. The buy back price is $1247. Spot is $1244.
    https://www.providentmetals.com/1-oz-canadian-gold-maple-leaf-dates-our-choice.html

    The premium over spot to buy the coin is 4%. The buy back price is 0.3% over spot. So, the risk to buy the coin is 3.7%. If the price of gold rises above that amount, you've made money.

    If you run the same equation for silver, the risk is higher. If you run the same equation for platinum, it's scary. Platinum premiums are 10%+ to buy and the buy back is 5% or more under spot--meaning even to make your money back, platinum spot must increase at least 15%.

    Now I understand your position is that buying bullion is stupid because average stock returns are higher than average bullion returns. Therefore people should save in traditional bank accounts, invest in the market, and buy property. But I'm approaching this from the position that after I have done all of that with my cash as I expect to, that I also buy bullion because I enjoy collecting it and because I know it is an extra safety net if traditional investments fail. I think that's not only smart, but also fun.

    The only people I think are stupid are the ones who spend their hobby income on tvs that are too big, cars that are too extravagant, football tickets that are too high up to see the game.
     
  8. -jeffB

    -jeffB Greshams LEO Supporter

    Meh. They're trading money for enjoyment, which seems to me one of the very best reasons to spend spare money. It's arguably more sensible than spending your days hoarding and counting -- except that some of us enjoy that more than the stuff the commercials instruct us to crave.
     
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  9. Clawcoins

    Clawcoins Damaging Coins Daily

    upload_2018-12-12_13-38-3.jpeg [​IMG]
     
  10. -jeffB

    -jeffB Greshams LEO Supporter

    Any advertising campaign that wants to make me crave that has its work cut out for it.
     
  11. Clawcoins

    Clawcoins Damaging Coins Daily

    maybe a Monster Box would work better ...
     
  12. V. Kurt Bellman

    V. Kurt Bellman Yes, I'm blunt! Get over your "feeeeelings".

    Where? Where have I ever written that? Point to where I have. You can't because I haven't.

    Metals are a HORRIBLE INVESTMENT on ANY randomly selected time horizon. ONLY by CAREFULLY cherrypicking only very specific date ranges can metals EVER be seen in a good light.

    Metals may be a SORT OF inflation hedge, but 1) ONLY THAT, and 2) a horribly overpriced one at that.
     
  13. Randy Abercrombie

    Randy Abercrombie Supporter! Supporter

    Speaking as a businessman rather than a PM trader..... A business cannot keep its doors open at a 4% premium. And when you ask a business to buy back their product, in effect they are showing you that 4% will be their overhead when they re-sell the piece. If my salesmen made 4% deals, they wouldn't be my salesmen for very long.
     
  14. myownprivy

    myownprivy Well-Known Member

    Hi,
    I have no desire to go back over your posts to see if you directly said stocks/bonds, real estate, and banks were better investments than bullion. But, since you say bullion is a terrible investment, I'm curious what you'd say is a good investment if not the aforementioned alternatives?


     
  15. V. Kurt Bellman

    V. Kurt Bellman Yes, I'm blunt! Get over your "feeeeelings".

    Mostly, a highly diversified package of Index Funds, mixed in with certain recently UNDERperforming sector-specific mutual funds. Never invest in individual stocks unless the company is "God, Incorporated". And I hear he has his company structured similarly to Zuck's. He holds all the voting shares.
     
    Last edited: Dec 12, 2018
  16. -jeffB

    -jeffB Greshams LEO Supporter

    Tesla, then? :troll:

    Somehow I had you pegged to own at least a little AAPL... but I guess if you've got any general index funds at all, you already do.
     
  17. V. Kurt Bellman

    V. Kurt Bellman Yes, I'm blunt! Get over your "feeeeelings".

    I have NEVER owned even 1 share of any single stock. Funds only. Sometimes a little too heavy toward Small Cap, but hey...
     
    Last edited: Dec 12, 2018
    myownprivy likes this.
  18. V. Kurt Bellman

    V. Kurt Bellman Yes, I'm blunt! Get over your "feeeeelings".

    Not even Space-X. Not that I'd turn down a Mars mission. I'd sign up to go in an instant. OTOH, I don't expect to live to see it, thereby reducing my chances to go.

    I repeatedly rebalance to go HEAVIER into whatever sector has been doing badly.
     
  19. V. Kurt Bellman

    V. Kurt Bellman Yes, I'm blunt! Get over your "feeeeelings".

    I am SWIMMING in Apple products, but no stock.
     
    Last edited: Dec 12, 2018
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