Reason for the shortages is here http://www.perthmintbullion.com/blo...ng_Our_Silver_Bar_Manufacturing_Capacity.aspx "The spot price is really out of whack compared to physical." Perth Mint sells physical at spot, it is not out of whack. However dealers who pay cash for metal and don't hedge can't sell on drops because they lose. In those cases the unwillingness of the dealer to sell does not indicate the spot price is wrong, it indicates that the dealer hasn't/can't hedge themselves. "As there doesn't seem a shortage of unallocated for storage, perhaps the bulk of currently available physical is being used up by these accounts?" We have now closed unallocated, but are selling Pool Allocated and will be publishing bar lists every Monday. "I can't see how 'unallocated' accounts can't be backed by physical stacked bars, namely when the amount of ounces in these accounts exceed the mint current production. I've purchase as part of a SMSF but can get physical delivery by paying the barring premium. So who looses there physical if I request delivery?" Maybe this might help http://www.perthmintbullion.com/Blog/Blog/11-02-28/Understanding_Unallocated.aspx No one is losing out when you take delivery, effectively we are just taking the metal backing your unallocated and making it into the product you want.
I think we are all struggling with the huge demand that the drop has made. Today has been a very very busy day for all of the traders i'm sure. I have no physical left to sell right now but am happy to take orders and lock in prices for customers who don't mind waiting for stock. The question is, how long will the wait be? i don't think i will have physical stock for at least a couple of weeks (if im lucky)
I notice one re-seller is still taking order at the moment with a clear instruction that delivery will be in the future. Can someone tell, if someone make an order now for some PM (said 10oz silver bar) to a re-seller when there is none, does the re-seller make an order with Perth Mint (at today price), then wait until Perth Mint can deliver? Is this how it work?
Ummm i dont mean to be rude but you had no physical nearly a fortnight ago when i rang you ..its all ordered was what i got from the conversation Feel free to clarify this .Do you actually keep physical ? or is it all ordered on demand ?.
bron suchecki, My fault - I do understand PM's Unallocated storage - never should have written "So who looses there physical if I request delivery?" but tell me this (if you can)...does the total amount of ounces in the PM 'production line' match the Unallocated accounts? or exceeds? or do some physical bars need to be offset to make everything balance? My guess was the ounces in the 'production line' couldn't match the Unallocated accounts hence why the accounts needed to be closed and offer allocated only?
@ Renovator - Not rude at all, I do keep stock but have also been waiting for this drop to happen, i wasn't prepared to buy stock at mid 40's and then hold on to them until the market picks up again, or increase my premiums. Instead, I try to offer competitive prices and keep my premiums down for the customers. Hope this helps.
"if someone make an order now for some PM (said 10oz silver bar) to a re-seller when there is none, does the re-seller make an order with Perth Mint (at today price), then wait until Perth Mint can deliver?" Most probably, that way they are not exposed if prices go up or down. "does the total amount of ounces in the PM 'production line' match the Unallocated accounts?" It never can match exactly. At the start of the Depository business and as it grows, we have more metal in the production line than unallocated - the excess is funded by borrowing metal from bullion banks. During this growing phase, as unallocated goes up, we are effectively repaying more and more of our leases from the banks, "disintermediating" them out of their profit on such lending. The end result is that over time all the production line metal ends up getting "funded" by the unallocated clients rather than the banks. We didn't close unallocated silver as soon as we reached our operational requirements for two reasons: 1. We wanted a buffer in case we had client liquidations, so that if there was a bit of a sell off by clients the remaining unallocated would still be equal to our operational requirements. 2. We needed to make some computer system changes to do pool allocated. When we have more unallocated than operational requirements, then we end up holding excess bars. This has been costing us as we are not collecting any fees on that part of the unallocated backed by this excess metal. Hence we had to shut it down and explicitly do a Pool Allocated product instead.
@ bron suchecki - Thank you for the explaination - I know these Noob questions probably drive you nuts but I personally am thankful! Regards Ag
