Maybe short your girlfriend, buy gold with the proceeds, watch it appreciate against your gf, then buy her back at a lower price. Please, oh please, never tell her I said this Zargor
the same is true of most markets now. i used to play some forex and managed to do pretty good after some bad mistakes learning the trading client, mastered the money management and stop losses and turned 100 into 500. started playing again more recently on the eur/usd, my favourite pair of yore, and pulled off about 25% in 4 months on play forex with oanda. but something i saw and have heard talked about in many places that there is players so big that their bid and ask orders shift markets almost 1% all by itself and last week when the tumble happened after the 31 dollar peak i could SEE the sell orders going down on the comex spot market. i counted 7 of them, sounds like a reasonable number to attribute the big players who have a share of the 80-90% top end of the market volume-wise. i'd love to be able to play derivatives trading on silver right now, volatile markets are exciting and with good money management (lot size) and trailing stops it's a fairly reliable method to make profits but i'm not in silver to win piles of fiat. i'm in silver because it's a genuine savings. up and down it goes against the fluctuating fiat floaters but when the credibility of the issuers of fiat is finally incinerated that stack of pretty silver coins is gonna be better for buying food than the fire-bricks (we can't even use our damn notes for fuel!) of million dollar notes that is coming soon.
As to there being very little to buy on major dips,I take your point. But before this major leap,there were just us hardcore silver buffs:but now lots of newbes have joined us. Big interest in silver lately I wonder if they will still be interested if silver falls from $30 to$18. If they lost 30% ,I think there would be plenty silver around to buy. I note that though people are shouting that silvers going to $50-$7000 ,there is plenty to buy on the forum.
The initial inventory is part of the business like the brick in the building, or the furniture in the office. He should sell those once as well to increase his turnover.
You have to understand that dealers who know what they are doing lock in their profit on every sale regardless of price. They do this by buying at the same point they sell. Say they have a monster box of silver 500 ounces. Say a monster box costs $15,000 to them. Say they can sell for $16,000. Now if they have the monster box on hand, they can sell at $16,000 and they immediately buy another for $15,000. So the net effect is that they have $1000 in profit, and the monster box is replaced. It doesnt matter what the price goes to. Say it falls to $9000 buy and $10,000 sell. They sell at $10,000 and immediately order for $9000. Net effect $1000 profit, and a monster box on hand. Say price goes up to $49,000 buy and $50,000 sell. They sell at $50,000 and order another for $49,000. Net effect of $1000 profit and a new monster box. The difference between the buy and sell prices is called the spread. A dealer only ever cares about the spread, not the price. Hope that makes it clear.
Spread only works if they can easily replace the order. When supplies get tight, time to delivery takes longer. Its quite possible that downstream suppliers may not accept orders until the backlog has been cleared. So maybe ordering a new box will be 18,000 instead of 15,000 when the box was sold. Also it depends on whether the dealer is just purely buying and selling and is only interested in fiat. Some dealers don't care about PMs, they are just flipping on profit as they don't keep up with the news. All they notice is more demand and longer wait times. There will be a day where the mint may ration supply. These dealers may find it harder to replenish stock when those days are near. Either way, its interesting times ahead. I really hope a supply crunch happens soon. Slam
Delivery time is no problem because the profit is locked in, but if the mints do not take orders dealers should not sell either. The price increase will be the dealers profit until sells resume.
