Why are you buying silver for 5 bucks over spot?

Discussion in 'Bullion Investing' started by FryDaddyJr, Apr 18, 2020.

  1. goldcollector

    goldcollector Member

    They want to pay $30 an ounce because if they do, the GSR has magically fallen to 58. ( Gold at $1740 )
    But if they buy the same ounce of silver for $17.40, the GSR is 100.
    This is the latest silvidiot "logic"
     
    FryDaddyJr likes this.
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  3. BunkerTrapMan

    BunkerTrapMan Overcoming adversity is the key to happiness

    I have recently looked on-line to see what has been occuring. At 14.96 per oz spot
    JMB is selling 1 oz American Eagles at 24.88 ea..thats almost $10 over spot. They buy back at just over $18.. something wrong with that picture. They are making good money on Silver Suckers in my opinion. Silver would need to hit $40 for you make even a small profit. Please know these profit remarks are estimates only. The buy/sell premium spread eats all that profit or most of it.
     
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  4. losthomer

    losthomer Active Member

    I can only assume people are buying at that price.
     
  5. alucard86

    alucard86 Active Member

    It would be nice if the popular YouTube silver stacker channels call out APMEX and JMB etc. for their prices. The popular gun channels on YT always call out the price gougers like Cheaper Than Dirt.

    https://www.apmex.com/product/23331/1-oz-silver-american-eagle-bu-random-year

    Spot is at $15.36 and APMEX wants $27.35 (check/wire) for 1 random year ASE. Who in the right mind would pay that!? I called all of my LCS when silver crashed to $11.90 on March 18th, and no one would sell ASE for even $2-3 over spot. The cheapest I could get locally within a 50 mile radius (Chicagoland) was $19 for 1 ASE. $18 per coin if I bought a tube. Even their Maple Leafs were still $16 for 1.
     
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  6. baseball21

    baseball21 Well-Known Member

    It's standard practice, this happens every time spot falls. PMs are nothing more than a business and whenever they go down sellers will generally hold their profit margins until forced to adjust
     
    FryDaddyJr likes this.
  7. alucard86

    alucard86 Active Member

    Then for average stacker there's no point to get into silver. A new stacker would have to wait till silver was in the $30s in order to make a tiny profit. Might as well just buy the ETF, SLV on E-Trade, Fidelity or Robinhood at $0 commission buy/sell. SLV is at $14.30 as of writing this reply, and silver spot is $15.44.
     
  8. alucard86

    alucard86 Active Member

    No coin shop or smelter to deal with to cut down your profit margin. With the trade apps you can buy and sell at anytime. The ETF does stay relatively close to the actual spot price of silver. In this case $1.14 under spot. Sure metals are a hedge against inflation and a "savings" account, but we all want a profit eventually when we sell. If you can only get silver at $11.99 (online) over spot for 1 ASE, or $7.10 (LCS) over spot why bother with physical when you go with an ETF as a newcomer or seasoned stacker who doesn't want to pay $7.10-$11.99 over spot?

    I sold my stack when silver was close to $18. I had a thread discussing it last year. I got into silver when it started to fall below $20 back in Spring of 2013. Then stopped and waited. When silver fell below $16 and $15 I got back in and at that time my LCS were still doing $2 over spot for an ASE and Maple Leafs for spot. Then I stopped when silver got back into the $16s. Then slowly bought 90% during that time then stopped. Held for 2 years and finally sold the stack in late 2019. Made a very good profit. I wanted to get back in at $11.90 - $13.50 but no one would sell for a decent price or even attempt to make a deal.
     
    Last edited: Apr 24, 2020
  9. Stevearino

    Stevearino Supporter! Supporter

    I have been stacking junk silver for several years (dimes, halves, quarters and war nickels). I decided to slowly sell off my stack and started a few weeks ago with rolls of mercury dimes on ebay, one a week. Have been getting about $75 plus $4 shipping. Just figured out that they are about $5.50-$6.00 over spot.

    I don't get it. But I'll take their money.

    Steve
     
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  10. Bob Evancho

    Bob Evancho Active Member

     
  11. Kentucky

    Kentucky Supporter! Supporter

    [​IMG]
     
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  12. john65999

    john65999 Active Member

    remember during the bad opec times and gas lines, and always in a store down town, "HART"S" they offered 10 times face value for pre 1964 coins in trade for merchandise, lol this was back in the early 80's
     
  13. bditto39

    bditto39 Member

    As an avid gun owner who has boycotted Cheaper Than Dirt for their overall scumbaggery since the .22 shortage, I have to say this is completely different. As I said in my long rant, silver spot price is NOT tied to the subjective market value of physical silver in these situations. I won't go into all that again, but basically, the subjective value of silver bullion is much higher than the subjective value of paper silver futures and etf's right now...and for good reason!

    On top of the fact that physical silver ought to be trading much higher than spot, there is another factor these companies are pricing in as well: volitility. As someone who has traded options for years, I expect premiums to rise with increased volatility because there is increased risk and price fluctuation. If one company is willing to take on more risk with a lower premium, more power to them, but it doesn't make financial sense to keep premiums the same when spot price swings are so violent and in this case against the demand of actual silver bullion.

    That situation is in opposition to the price gouging of the "ammo crisis" where there is no "ammo spot" price that is based the obligation to purchase a .223 round in several months that the trader has no actual interest in obtaining. Ammo value went up with demand. Some companies chose to take care of customers instead of raising their ammo prices. Unfortunately crap companies like Cheaper Than Dirt capitalized on this in an unethical and greedy way that both perpetuated the problem and showed that they really only care about money. The difference is that volatility was the same. Nothing changed in the world, just the supply was trying to catch up with increased demand.

    So, it's very different, and what you are calling price gouging is actually, IMO, simply trying to figure out what the market price ought to be of physical silver. Bullion has so far diverged in demand from paper silver that spot price just shouldn't be seen as a way to gauge physical silver value right now. So, in application, if you find a company's prices too high, don't buy it, and if someone else's price is attractive, buy that!
     
  14. bditto39

    bditto39 Member

    I look forward to the day I can barter silver! Nice find on that trade @ToughCOINS!
     
  15. FryDaddyJr

    FryDaddyJr Junior Member


    Only an idiot wants a total economic collapse
     
  16. bditto39

    bditto39 Member

    I didn't say anything about wanting total economic collapse. I hope it wouldn't come to that for people to realize that silver is a far more stable trade unit than fiat currencies printed by incompetent governments.
     
    Jeffjay likes this.
  17. alucard86

    alucard86 Active Member

    @bditto39 You're right it is a different market and situation. You're right its not 1 to 1 like with ammo price gouging. However with these prices who would want to get into silver stacking atm (seasoned or newbie)? I was ready to get back in when it crashed to $11.90. Buy low sell high. But no one local and clearly no one online wants to make a deal, or sell at a reasonable price per coin (1oz bullion & 1oz rounds). I'm not buying silver when its $11.90 an oz (market value) but I can only purchase it for $22 an oz. Or the current situation of $15 something an oz for $27 per coin. So I'll stick with the ETF. At least when silver crashes the SLV ETF price isn't listed for $14.30 but I have to pay $24.30 to buy a share.
     
  18. bditto39

    bditto39 Member

    I agree with you fully on the lack of motivation to buy for those of us who bought lower or at least observed it at lower prices. SLV's price will definitely be driven up with the demand for physical silver over time as it did a decade ago, so I think you are very wise to take a position on SLV...heck, I have already traded several profitable call spreads on SLV in the past two months. Absolutely buy some SLV, but be careful that it may not just pop at the start of a bear market and may not even keep this level.

    I think my point was that physical silver never crashed...what crashed was the paper silver from traders needing liquidity as the market tumbled. While paper wenr down, physical just moved up with demand a few dollars from it's previous highs when spot hit $18 and $19. Don't lose hope though! As others have showed, there are still opportunities to get silver at decent prices! You can't trade physical silver quite like a stock because of those nasty premiums, so it's more of a asset that I buy in a certain range based on the charts. I know it's not $12 or $15, but $19 is actually still in my buy range, so there are some opportunities out there, especially in junk silver. Not a great entry compared to $15, but it will be relatively good if silver does make 100 or 200% gains out of this recession.
     
  19. txguy

    txguy Active Member

    i’m actually selling locally right now a lot of junk silver. it’s a sellers market for sure!
     
  20. goldcollector

    goldcollector Member

    $75 for rolls of mercury dimes is really not that good at the moment. Especially after shipping costs, eBay fees, PayPal fees.

    Silvidiots are paying 18x-20x for 90% right now. You might be walking away with $60 a roll after all fees. 12x face = $17 an ounce. Not good at all.
     
  21. Gilbert

    Gilbert Part time collector Supporter

    Good point. I haven’t sold on EBay for quite a while, but when that was the case I figured 12% of sale price was lost to various fees.
     
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