jim4silver
Silver Member
- Apr 15, 2008
- 3,662
- 495
Just wondering what everyone here believes the next month or two holds for the silver and gold situation?
I believe that locally the premiums are going to be much higher as supplies stay tight over the next 4 weeks (maybe longer?), as they are projected to be by a local coin dealer I spoke to this weekend who has been in the business for a long time. However, he (like the other coin dealers I spoke to locally over the past week or so) believes that they will NOT have a problem getting the metals on the dates they are promised by the wholesalers- which should be 4 weeks or so for silver generic bullion and longer for ASEs. I have no direct personal experience as a retail coin dealer, but I think these guys (the coin dealers) are going to be unpleasantly surprised in a month when things do not show up on time. Here's why I think they are going to be unpleasantly surprised, and why this time things might actually "be different".
For example, the difference between this spike down and the one in 2008 (where silver went from 21 to 9), is that in 2008 all the local coin dealers (I don't know about large wholesalers at that time) had lots of inventory on hand. They didn't want to sell that low so they jacked up premiums quite a bit in response to the relatively fast decline, but there was still product if you wanted to pay. I remember buying lots of wonderful Merry Christmas type bars and paying $2.50 or so over spot when the paper price was $9 something. I thought that was outrageous to pay such a premium for crappy bars like those but in hindsight it was a great buy for me.
Fast forward to now, and the prices are spiking down like in 2008, but today there is no real supply like last time. Even for people who want to pay $3.50 or more for buffalo generics here, they are having to pay now and wait 4 weeks. People are paying $6+ over spot for ASEs they won't see till June. I am sure some coin stores across the country have "reserves" on hand they are selling if they can get large premiums, maybe thinking that they will replace said inventory in a month or so at the lower prices.
One local store that had been maintaining decent supplies relatively speaking was pretty much out of any silver bullion or regular junk silver as of close of business Saturday, except for higher priced stuff like slabbed ASEs, coins and such. I got there early and grabbed a couple more Kilo Koalas (1.75 over spot) before they disappeared (they had 4 left after I got mine).
I think things are going to be interesting in the near term in gold and silver. At the right time I will put some money into a silver ETF. Probably if it breaks 20 and there is no physical around for a decent premium. I would not be surprised to see them push the paper price into the high teens before the prices start rising again.
We may witness this year the actual breaking of the physical and paper price for good (I would consider a situation where the premium is $6 over spot (26%) for junk silver as TreasurePirate observed in his area, to be a sign that such a breaking is starting to get underway. I predict that there will be a problem with wholesalers being able to obtain enough product to satisfy the current and future orders that will accumulate over the next few weeks in retail silver bullion markets across the country. This is not due to any malfeasance on the part of the wholesalers, but instead due to lack of sufficient retail product to meet the orders. I think this will last for at least the next month or two (maybe longer ?)but IF and only IF the prices stay low. If the prices rise significantly from here, things will balance out much faster.
Gold is still available at decent premiums although not all the different types of bullion/coins are available like usual. I don't plan on buying any gold for a while due to lack of extra cash, but now would be a great time to grab some if available at good premiums.
Just my opinion.
Jim
I believe that locally the premiums are going to be much higher as supplies stay tight over the next 4 weeks (maybe longer?), as they are projected to be by a local coin dealer I spoke to this weekend who has been in the business for a long time. However, he (like the other coin dealers I spoke to locally over the past week or so) believes that they will NOT have a problem getting the metals on the dates they are promised by the wholesalers- which should be 4 weeks or so for silver generic bullion and longer for ASEs. I have no direct personal experience as a retail coin dealer, but I think these guys (the coin dealers) are going to be unpleasantly surprised in a month when things do not show up on time. Here's why I think they are going to be unpleasantly surprised, and why this time things might actually "be different".
For example, the difference between this spike down and the one in 2008 (where silver went from 21 to 9), is that in 2008 all the local coin dealers (I don't know about large wholesalers at that time) had lots of inventory on hand. They didn't want to sell that low so they jacked up premiums quite a bit in response to the relatively fast decline, but there was still product if you wanted to pay. I remember buying lots of wonderful Merry Christmas type bars and paying $2.50 or so over spot when the paper price was $9 something. I thought that was outrageous to pay such a premium for crappy bars like those but in hindsight it was a great buy for me.
Fast forward to now, and the prices are spiking down like in 2008, but today there is no real supply like last time. Even for people who want to pay $3.50 or more for buffalo generics here, they are having to pay now and wait 4 weeks. People are paying $6+ over spot for ASEs they won't see till June. I am sure some coin stores across the country have "reserves" on hand they are selling if they can get large premiums, maybe thinking that they will replace said inventory in a month or so at the lower prices.
One local store that had been maintaining decent supplies relatively speaking was pretty much out of any silver bullion or regular junk silver as of close of business Saturday, except for higher priced stuff like slabbed ASEs, coins and such. I got there early and grabbed a couple more Kilo Koalas (1.75 over spot) before they disappeared (they had 4 left after I got mine).
I think things are going to be interesting in the near term in gold and silver. At the right time I will put some money into a silver ETF. Probably if it breaks 20 and there is no physical around for a decent premium. I would not be surprised to see them push the paper price into the high teens before the prices start rising again.
We may witness this year the actual breaking of the physical and paper price for good (I would consider a situation where the premium is $6 over spot (26%) for junk silver as TreasurePirate observed in his area, to be a sign that such a breaking is starting to get underway. I predict that there will be a problem with wholesalers being able to obtain enough product to satisfy the current and future orders that will accumulate over the next few weeks in retail silver bullion markets across the country. This is not due to any malfeasance on the part of the wholesalers, but instead due to lack of sufficient retail product to meet the orders. I think this will last for at least the next month or two (maybe longer ?)but IF and only IF the prices stay low. If the prices rise significantly from here, things will balance out much faster.
Gold is still available at decent premiums although not all the different types of bullion/coins are available like usual. I don't plan on buying any gold for a while due to lack of extra cash, but now would be a great time to grab some if available at good premiums.
Just my opinion.
Jim