Buying on the dip and local coin store report

[jim4silver]

I picked up a roll of 2013 ASEs today at 4.50 per ounce over spot. At under 27 per coin I still think that is a good deal considering I thought it was a good deal at 31. I could have picked up a roll of generic 1 oz brand new coins for 2.50 per ounce over spot. I am putting this roll away for long term so I figured what the heck and got the Eagles. I remembered to check out the coins before handing the money over this time and the first few coins were perfect so I took it. After I got home I checked them all and they were all perfect.

I was at the cranky coin dealer's store today and he wouldn't have tolerated me emptying all the coins to examine them. Since he is the only coin dealer that I use that actually has ASEs in stock I knew I would not be able to look at all of them like I wanted to at the store. I asked him about seeing off looking new ones and he said he has seen them too. They don't have the normal milk spots per se, but have a weird type of spot/mark on most of the coins in the roll in the same place on each coin. He said he has seen some of these but the coins are not considered damaged in anyway and he will buy them back just like those without spots which I believe he would do from my past dealing with him. But I am not going to buy any with the spots anyway because they look like crap in my opinion.

I haven't talked to this coin dealer in a while and he thinks silver will drop to 15 or so in this current correction. His opinion was that the price would not remain at that low point for a long period though. This guy is very PM bullish and I know has a large portion of his own wealth in gold and silver so he is not like TreasurePirate and such. He has been in the coin business for a long time and does a large volume business for a local store. With respect to what he was buying for himself, he said he is buying only silver with the prices where they are now and not gold. He said he doesn't personally own any PGMs (other than what he has in inventory to sell).

He said recently he has seen increased orders from financial planning/investment advice type customers who are buying for themselves (at least that is what they are telling the coin dealer). He said they have been buying decent sized amounts gold bullion but not silver for whatever that is worth.

Just thought I would pass on what I saw and heard today.

Jim

 

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[TreasurePirate69]

Thanks for the update. I'm going to the coin show tomorrow and I'll report back on my coin show thread. Sounds like premiums are coming down a bit. I'm curious to see what the coin dealers are selling silver for at the show and if they even have any to sell.

 

[Seajay]

Here in Jacksonville, NC the local coin dealer with a store is asking $31 for his Silver Eagles, so you are getting a great price when you buy from your dealer! In talking with other dealers, they have too much in their ASEs to let it go at $4-$5 over spot. At some point, it seems that their overhead costs will "force" them to sell at current prices. Then again, perhaps they will cut off their nose to spite their face! Maybe $18-$22 will be the new norm? Then what will they do? Another dealer who works by appointment only is selling 90% for 18.5 - 19 x face and has no problem selling it, as long as he can find someone who will sell to him. My experience since this recent decline in silver prices began is that hardly anyone/individual is selling and dealers cannot find enough to buy. During the Azalea Festival Show here in Wilmington last month, $25-$35 in face 90% silver came through the door on Saturday and was sold to a major dealer; that was all! Unbelieveable! Anyway, if your area is like mine, there are alot of guys sittting on alot of coin and will not part with it..sounds like more potential treasure leads in the making! Seajay

 

[0121stockpicker]

Do you know what these same dealers will PAY over spot for ASEs? Or even what the "average" over is? Obviously it's the "spread" that's important. Why not just by an ETF and buy and sell at spot?

By the time you pay the premium / spread and any potential tax or shipping on physical you have eaten into a lot of your potential return? Seems like you really start off in the hole?

 

[skeeterd]

Do you know what these same dealers will PAY over spot for ASEs? Or even what the "average" over is? Obviously it's the "spread" that's important. Why not just by an ETF and buy and sell at spot?

By the time you pay the premium / spread and any potential tax or shipping on physical you have eaten into a lot of your potential return? Seems like you really start off in the hole?

But then all I have is paper. I want silver!!

 

[0121stockpicker]

But then all I have is paper. I want silver!!

Got you. But that's a big price to pay to have it physical?

 

[0121stockpicker]

But then all I have is paper. I want silver!!

Understood, but its a big price to pay just to have physical metal.

 

[skeeterd]

Got you. But that's a big price to pay to have it physical?

I look at it kinda like coin collecting. I recently bought a 1932s washington quarter for 200 bucks. I could have taken a washington quarter out of my pocket for 25 cents and saved the$199.75. But I like old coins. I could buy SLV but then I can't hold it in my hand. If I were in it strictly as an investment, an etf would be the way to go.

 

[mtk76]

Prices in my area:
ASE - +6 over spot (none in stock)
Halves - 9
Quarters - 4.50
Dimes - 2

Picked up some quarters some older worn ones from the 20s plus some real nice silver proofs 61-64.

 

[TreasurePirate69]

Prices in my area:
ASE - +6 over spot (none in stock)
Halves - 9
Quarters - 4.50
Dimes - 2

Picked up some quarters some older worn ones from the 20s plus some real nice silver proofs 61-64.

That's actually lower than most places. Most LCS's in my area are charging at least 20X face value for junk silver.

 

[jim4silver]

By now I thought that maybe premiums would be dropping since the price has been at these relatively low levels for a while now with silver. My local stores however are still selling ASEs (ordering them for you for future delivery) and junk silver (what they have in stock) for very high premiums. Right now my local stores are selling regular old junk silver for close to $28 per ounce of pure silver. That is actually HIGHER than the cost for ASEs. Why would anyone want junk silver over ASEs? I don't buy the whole barter theory but that is the only reason I can think of. And as far as counterfeits, there is still virtually a zero chance anyone will get counterfeit ASEs if they buy new tubes for a reputable store.

I like junk silver myself and have been buying some when I can get it cheap, but when it comes to ASEs and junk I'll take the .999 any day over junk. Back in 1980 when silver spiked the coin dealers were paying quite a bit less for junk coins than they were for .999. Don't know if history will repeat again but I would not be surprised.

Jim

 

[Stymie]

I rescued a '64 Kennedy from the junk pile.
My favourite US coin by a large margin.
It is a shame to see what is being melted up here.
It is not junk, it is the silver.

 

[billjustbill]

Jim,

Same elderly fellow sells ASE's at the flea market each month. Today he had some in the late '80's and early '90's, and selling them at 3 for $90... So, from what I hear you saying, that's a fair price, right?

Also, had some old pocket knives, with hardly anything thing tied up in them, and with another vendor, I traded them and $200 for a Unc. roll of 1964 Kennedy halves.... Considering current scrap at 6/2/13 pricing, but what's your take on what I did?

 

[usandthem]

What kind of pocketknives did you have? You already paid over melt for the coins.

 

[billjustbill]

What kind of pocketknives did you have? You already paid over melt for the coins.

These were Schrades and one Leatherman. I understand about the current low ($22ozt) "melt" value, but these days, I keep seeing that physical Silver is hard to get. Then, when you get it, the vendors are adding a "Premium" on top of melt......So with that added to each coin, I'm thinking I've almost broke even, plus have some recognizable coinage if the Economy goes South.

Having a roll of almost uncirculated 1964 Kennedy halves these days seems much better than a handful of old knives I got for almost nothing and have no interest in.

 

[skeeterd]

Stopped by my LCS today for the first time in over a month. Bought $2 face in 90% kennedy halves for $48 (24x face). Thats down from 25x face a month and a half ago but still too high in my opinion. I only buy from him to keep a relationship with him. He does have more junk silver in than last time. He said he finally got a large order in from a wholesaler. He also said he has seen an increase in people walking in off the street to sell 90% silver, but I didn't think to ask how much he is paying. I did ask about ASE's and he said he's selling them for $9 over spot, but if I wanted a roll, he would sell them to me for $6 over spot. Maybe premiums are finally starting to come down a little.

 

[billjustbill]

I've always wanted to ask: When you buy from your Local Coin Store, do you pay sales tax each time?

 

[skeeterd]

I've always wanted to ask: When you buy from your Local Coin Store, do you pay sales tax each time?

Depends on the state and their laws. In my state, we don't have sales tax on anything.

 

[jim4silver]

Jim,

Same elderly fellow sells ASE's at the flea market each month. Today he had some in the late '80's and early '90's, and selling them at 3 for $90... So, from what I hear you saying, that's a fair price, right?

Also, had some old pocket knives, with hardly anything thing tied up in them, and with another vendor, I traded them and $200 for a Unc. roll of 1964 Kennedy halves.... Considering current scrap at 6/2/13 pricing, but what's your take on what I did?

Your prices are a bit higher than in my local area (new ASEs are roughly $5 over spot if you want to walk out the door with them). I know that prices are high all over though. If I were going to buy a large amount and couldn't get decent local prices, I would probably go with one of the big online dealers but that would be a last choice for me because I like to walk out the door with the metals after paying for them.

PS For example, today Apmex has their 10 oz silver bars on sale for .99 over spot any quantity. I cannot get near that at any of my local stores; don't know why they have them so cheap. I hope it is not because they know silver is going to tank soon.


Jim

 

[lost]

Not only does Apmex have ten oz bars at $235, Provident has the 10 oz'er at $235 and free shipping. If the past holds true both companies must think Silver is going into the toilet.

I think I have an answer to this slipping and sliding $22.?? silver spot. How about you and Charlie go to your lcs and sell a couple hundred bucks of silver for what ever his spot plus X is? I figure if you guys do this, and take one for the team, silver will be at $40 by Thursday. What'da think. For the team guys.