Am I the only one who has noticed that the price has not really moved on coins or on bars despite the price drop of about 10%, making most premiums about 20-25% over spot? Is this a sign of high interest/sales or is it simply the dealers making the most of a fairly sharp drop in spot and hitting regular buyers?
Here in the US, the premiums on most silver coins (generic and gov made bullion) are fairly static. For example, right now the average premium in town on ASE's is around $3. When silver was $35 a few years ago, the premium was $3. Everyone in the chain of delivery has to make their "cut", no matter what the price of silver. If silver drops to $5, I would opine that premiums will still be $3, as it would be if silver hits $50 again. The only time we see premiums change here is when there are inventory issues, like when the price falls too fast and people rush in to buy. Jim
The cheapest rounds I can even find at the moment are more than $3USD; for an actual coin, about 25% over current spot (over $5AUD) is the cheapest I can find for smaller orders.
Premiums tend to go down with volume purchases and are highest with small amounts purchased. Dealers like APMEX purchase lots of silver for under spot from what i understand. .
Oh of course, I've been buying for quite a while so I get that, I have just noticed that prices don't seem to be dropping nearly as quick as spot. I was just wondering if others have noticed this and what people think is the justification.
spot is short span, metal take sometime to turn around. its been like that all along, unless there is an estate sale the local will enjoy some discount a little bit
The difference is between fixed costs and variable costs. Spot goes up and down, but fabrication, delivery, rent, labour costs, etc are fairly static.
Topher, where are you looking? I don't know what the coin shops are like in your area but if you're buying online you can get lower premium :- http://www.perthbullion.com/shop/detail/buffsco1/ That's a roll for about $3AUD over spot per coin.
If premiums are high, buy either allocated or unallocated to get closer to spot. With unallocated, convert to physical when premiums are lower.
