Log in or Sign up
Coin Talk
Home
Forums
>
Coin Forums
>
Bullion Investing
>
Why are you buying silver for 5 bucks over spot?
>
Reply to Thread
Message:
<p>[QUOTE="bditto39, post: 4366336, member: 107194"]The following is just my two cents...</p><p><br /></p><p>It's a question of what physical silver ought to be priced at in opposition to the paper silver that has been selling off rapidly represented as "spot price." </p><p><br /></p><p>If you mean why not wait until the panic comes off and silver premiums come down to allow for a close-to-spot purchase price, there are a lot of unknowns about that. First off, this might work against your favor -- after this paper sell-off from margin calls and ignorant financial investments is over, people may see silver as a safe haven and drive spot price up. At that point, what you now call $5 over spot may well be under spot. Look at the relevant charts on timeline from silver in the 2008 crisis and you will see that premiums were up until spot popped and shot to ridiculous heights. Second, silver's volatility is such that unless you are trading paper silver (futures, etf's, etc), you are going to lose on short-term premiums regardless. Physical silver is either a long-term investment, a long-term hedge against inflation, or a mid-term trade for crisis instability of the dollar and the market. The last, which many are pushing toward, could easily work over the next few years even buying around $20 to $25 an ounce given that the metals market performs anything like in the 2008 crisis. Is $25 silver a good buy? IMO, no, but there is an argument for it if someone thinks it will revisit previous crisis levels. </p><p><br /></p><p>If you mean people should wait until silver premiums come down to match these low prices, I think you may be disappointed in how silver performs for your entry over the next few years. I could easily be wrong on this, but I personally do not see physical silver matching these low paper values for years to come if ever because of bullion shortages, market demand, and the rising gold/silver ratio. Silver is not low because physical silver is not desired, it is low because the paper assets based on small quantities of silver are being sold off with the market drop. Physical silver does not always follow spot price in value because of these external market factors, and this is one of those times. What I mean is, physical silver is not worth $15 spot price right now. This is a representation of silver futures that are not even based on owning the full value in actual silver, so of course the value is low. If you are finding silver at $5 over spot ($20/oz), I think you are finding the actual market value of physical silver for the present time. Wait until "premiums" come down, and you may be paying $1 over spot of $20, $25, or even higher...at which point those "$5 premiums" could look awfully attractive.</p><p><br /></p><p>Now, this all being said, <b>I am not buying at $20 an ounce</b>... I bought for the past 3 years at way lower prices. I also spent time when spot was at $11 and $12 sourcing junk silver from dealers who sold $1 and $2 over spot still. All of that seems to be dried up and past at this point. For those who ignored cheap silver prior to this recession, $20 an ounce may be the best entry price they can get and still could be a good investment. If you can find it cheap, get it, but I wouldn't bank on $15 or $17 physical silver in the broader market for a long while to come.[/QUOTE]</p><p><br /></p>
[QUOTE="bditto39, post: 4366336, member: 107194"]The following is just my two cents... It's a question of what physical silver ought to be priced at in opposition to the paper silver that has been selling off rapidly represented as "spot price." If you mean why not wait until the panic comes off and silver premiums come down to allow for a close-to-spot purchase price, there are a lot of unknowns about that. First off, this might work against your favor -- after this paper sell-off from margin calls and ignorant financial investments is over, people may see silver as a safe haven and drive spot price up. At that point, what you now call $5 over spot may well be under spot. Look at the relevant charts on timeline from silver in the 2008 crisis and you will see that premiums were up until spot popped and shot to ridiculous heights. Second, silver's volatility is such that unless you are trading paper silver (futures, etf's, etc), you are going to lose on short-term premiums regardless. Physical silver is either a long-term investment, a long-term hedge against inflation, or a mid-term trade for crisis instability of the dollar and the market. The last, which many are pushing toward, could easily work over the next few years even buying around $20 to $25 an ounce given that the metals market performs anything like in the 2008 crisis. Is $25 silver a good buy? IMO, no, but there is an argument for it if someone thinks it will revisit previous crisis levels. If you mean people should wait until silver premiums come down to match these low prices, I think you may be disappointed in how silver performs for your entry over the next few years. I could easily be wrong on this, but I personally do not see physical silver matching these low paper values for years to come if ever because of bullion shortages, market demand, and the rising gold/silver ratio. Silver is not low because physical silver is not desired, it is low because the paper assets based on small quantities of silver are being sold off with the market drop. Physical silver does not always follow spot price in value because of these external market factors, and this is one of those times. What I mean is, physical silver is not worth $15 spot price right now. This is a representation of silver futures that are not even based on owning the full value in actual silver, so of course the value is low. If you are finding silver at $5 over spot ($20/oz), I think you are finding the actual market value of physical silver for the present time. Wait until "premiums" come down, and you may be paying $1 over spot of $20, $25, or even higher...at which point those "$5 premiums" could look awfully attractive. Now, this all being said, [B]I am not buying at $20 an ounce[/B]... I bought for the past 3 years at way lower prices. I also spent time when spot was at $11 and $12 sourcing junk silver from dealers who sold $1 and $2 over spot still. All of that seems to be dried up and past at this point. For those who ignored cheap silver prior to this recession, $20 an ounce may be the best entry price they can get and still could be a good investment. If you can find it cheap, get it, but I wouldn't bank on $15 or $17 physical silver in the broader market for a long while to come.[/QUOTE]
Your name or email address:
Do you already have an account?
No, create an account now.
Yes, my password is:
Forgot your password?
Stay logged in
Coin Talk
Home
Forums
>
Coin Forums
>
Bullion Investing
>
Why are you buying silver for 5 bucks over spot?
>
Home
Home
Quick Links
Search Forums
Recent Activity
Recent Posts
Forums
Forums
Quick Links
Search Forums
Recent Posts
Competitions
Competitions
Quick Links
Competition Index
Rules, Terms & Conditions
Gallery
Gallery
Quick Links
Search Media
New Media
Showcase
Showcase
Quick Links
Search Items
Most Active Members
New Items
Directory
Directory
Quick Links
Directory Home
New Listings
Members
Members
Quick Links
Notable Members
Current Visitors
Recent Activity
New Profile Posts
Sponsors
Menu
Search
Search titles only
Posted by Member:
Separate names with a comma.
Newer Than:
Search this thread only
Search this forum only
Display results as threads
Useful Searches
Recent Posts
More...