Huge divide between Spot and Physical

Aurora et luna said:
Guys, don't sweat it! :)
I have 1000's of ounces arriving by mid June so I wouldn't worry too much about any serious shortages. Spreads should come down once dealers begin flooding the market with product so all you guys asking for top premiums better make hay while you can.
However there's not going to be a lot of variety as the PM continues to give you Buckley choice. It will either be 1oz Koalas or kilo coins.
I underestimated this recent rush and didn't order enough to meet demand so all of this month's supply has already been pre-sold.
I really dislike taking orders and making people wait weeks for delivery but if the Perth mint and other suppliers continue being tardy, I am afraid that's the direction my business is headed in the near future.
Having to shut up shop for weeks at a time until you can replenish your inventory is not a viable or practical business model.
Click to expand...

Ive just checked out you have a site so will inspect later this evening.

Lovin the energy and spirit of this forum ive got to say

1for1.
 
1for1 said:
Aurora et luna said:
Guys, don't sweat it! :)
I have 1000's of ounces arriving by mid June so I wouldn't worry too much about any serious shortages. Spreads should come down once dealers begin flooding the market with product so all you guys asking for top premiums better make hay while you can.
However there's not going to be a lot of variety as the PM continues to give you Buckley choice. It will either be 1oz Koalas or kilo coins.
I underestimated this recent rush and didn't order enough to meet demand so all of this month's supply has already been pre-sold.
I really dislike taking orders and making people wait weeks for delivery but if the Perth mint and other suppliers continue being tardy, I am afraid that's the direction my business is headed in the near future.
Having to shut up shop for weeks at a time until you can replenish your inventory is not a viable or practical business model.
Click to expand...

Ive just checked out you have a site so will inspect later this evening.

Lovin the energy and spirit of this forum ive got to say

1for1.
Click to expand...

What little product that I am able to source this month is going out as quickly as it arrives. No chance to even list it in my store as I have a very long wish list from my regulars.
Come back in about 4 - 6 weeks time and I should have thousands of ozs of silver coins and bars for sale in my store.
Will be competing with every dealer, site sponsor and forum members for your buck.
Can only be good for members as increased competition and supply will definitely lower prices.
 
Aurora et luna said:
1for1 said:
Aurora et luna said:
Guys, don't sweat it! :)
I have 1000's of ounces arriving by mid June so I wouldn't worry too much about any serious shortages. Spreads should come down once dealers begin flooding the market with product so all you guys asking for top premiums better make hay while you can.
However there's not going to be a lot of variety as the PM continues to give you Buckley choice. It will either be 1oz Koalas or kilo coins.
I underestimated this recent rush and didn't order enough to meet demand so all of this month's supply has already been pre-sold.
I really dislike taking orders and making people wait weeks for delivery but if the Perth mint and other suppliers continue being tardy, I am afraid that's the direction my business is headed in the near future.
Having to shut up shop for weeks at a time until you can replenish your inventory is not a viable or practical business model.
Click to expand...

Ive just checked out you have a site so will inspect later this evening.

Lovin the energy and spirit of this forum ive got to say

1for1.
Click to expand...

What little product that I am able to source this month is going out as quickly as it arrives. No chance to even list it in my store as I have a very long wish list from my regulars.
Come back in about 4 - 6 weeks time and I should have thousands of ozs of silver coins and bars for sale in my store.
Will be competing with every dealer, site sponsor and forum members for your buck.
Can only be good for members as increased competition and supply will definitely lower prices.
Click to expand...

Absolutley... competition is the heart of Capitilism and a prospering community so well done to everyone here for keeping prices lower than we would otherwise be facing.

Well hopefully i can get in on your next batch of personalised rounds, let me know how i can go about doing this please.

Thanks again,

1for1
 
Annoying now how spot is $35 Aus and the cheapest 1oz silver is about $40 or 14.2% over spot!

I suppose a $5 premium over spot isnt so bad when all production costs are considered.

1for1
 
What is annoying is when i remember umming and ahhing over the price of a $20 1oz coin not that long ago when spot was below $20
 
1for1 said:
Annoying now how spot is $35 Aus and the cheapest 1oz silver is about $40 or 14.2% over spot!

I suppose a $5 premium over spot isnt so bad when all production costs are considered.

1for1
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I still don't understand why you think that this is a big markup? You are looking at the international wholesale price for a large raw ingot and then complaining that someone charges an extra $5.00 to melt it down, mint it into a 1oz coin or round and then retail it. You might as well look up the wholesale price of a container load of timber and then walk into a furniture shop and tell them that you are annoyed that you can't buy a table for the same price a few lumps of 4x2, purchased at a container lot price. How on earth does someone buy a building, a crucible, presses, pay for die design and fabrication, pay their staff, power, insurances and all the other costs of a manufacturing business, and then how does a retailer make any money buying that coin from a factory to stock in their shop for you to buy?

Spot is a guide to relative price movements only. It has nothing to do with retail. 14.2% mark up is VERY cheap compared to every other retail item that you buy every day unless it is a clearance sale item. If 14.2 percent annoys you, then for your own peace of mind don't buy a cup of coffee from a cafe, you would feel utter outrage if you knew how much mark-up in on that cup.
 
I've been buying my silver in junk form mostly since the drop in June. Very little premium and excellent variety. However lately the markup has been only 2 -3 dollars for a round. And at the vcbe I grabbed a Maple for just over 3 bucks over spot. Now that the premium is more manageable I'm moving back into bars and maples.
 
Jonesy said:
Food usually has hundreds of percent mark-up, Chinese made clothing in Australian department stores can have 500% or more mark-up, glasses, tyres, Jewellery, electricals can be 30-100%... Metals are unique in that the bulk international wholesale price is published every minute. If wholesale prices for everyday retail items were freely available when you went shopping there would be riots.
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i think everyone with half a brain realizes most of our "stuff" is being made in china at much lower prices then what we pay. However if you look at Walmart they are only making 3-4% net on sales i believe. I think that counts in everything(advertisement money ect), but still not an outrageous percentage to profit.
 
hmmm... according to my ebay summary, I've purchased 15k worth of gold and silver in the past 2 months.. and all of it has been at spot or less.

If you're prepared to put in the time to search for stuff, then you'll find bargains everywhere.
 
1for1 said:
their current model, from how i dissect it seems to be focused on producing high grade numismatic coins with huge premiums to make there unallocated storage service at spot seem that much more inticing

Why are they so interested in creating this DIVIDE (i say they do this quite intentionally), my rationale is that they can either leverage the allocation and have multiple allocations per unit, or that there is a supply shortage and its not possible to produce more as there minting processes either dont allow for it or they are unable to cope with a scenerio whereby they sold physical on the local market as say $1-2 over spot.

given the waiting periods already on the premium 100% over spot stuff id say its the blanks that are causing the delay (or lack thereof)

Perth Mint wont produce cheap silver bullion cos it will directly compete with there paper trades, one is a license to print money, the other is combersome and involves sourcing silver, refining, minting, supplying etc... plus they are operating at would id consider capacity... in the short term they will drag supply intenionally or not delays will make people less reluctant to purchase.
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There is no intention to create any divide. Selling numismatic coins does not make unallocated storage more attractive - no one buys numismatic coins as a pure silver investment vehicle. That is a straw man argument. Your theory has no basis when you consider:

1. We shut down unallocated silver.
2. When our Kook limited mintage silver bullion coin started to sell out, we created the unlimited Koala silver bullion coin.
3. We are in the process of expanding not only our bullion coin capacity but also our silver bar capacity, silver bars being the cheapest form of metal.

If paper is a license to print money, why did we close unallocated, introduce a more expensive storage silver product AND continue to make and expand our physical silver business?
 
Well put and I have to agree with you 100% jungfraujock. I started mid last year and bought a few thousand ounces of bullion bars in 10 to 100oz sizes, then PM couldn't supply for 3 months so I began buying coins, rounds, 1oz bars and some gold ones as well. I hardly even look at the bullion any more. But the coins and rounds are a different story, just something about them I guess. I still hope the pundits are right about the escalation of silver but I will leave that up to the bars to accumulate any gains, the coins are different. I wouldn't sell them regardless of where the so called spot price (which I am now convinced is a bankers con) may go.
 
What if the world does run out of silver due to an enormous demand for investment? - but there is still a real need for industrial uses - could not some governments decide that it is illegal to own/stack silver and force people to sell back to the government? In desperate times any scenario is possible~!
All they have to do is make it a criminal offence to possess a certain amount of silver (a bit like drugs or guns!) and most ordinary law abiding citizens, rather than risk imprisonment would own up to their cache. :o
Of course, they would buy it back at a price they set, not real market value!
 
goldpanner said:
What if the world does run out of silver due to an enormous demand for investment? - but there is still a real need for industrial uses - could not some governments decide that it is illegal to own/stack silver and force people to sell back to the government? In desperate times any scenario is possible~!
All they have to do is make it a criminal offence to possess a certain amount of silver (a bit like drugs or guns!) and most ordinary law abiding citizens, rather than risk imprisonment would own up to their cache. :o
Of course, they would buy it back at a price they set, not real market value!
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Just like the Nazis did.
 
goldpanner said:
What if the world does run out of silver due to an enormous demand for investment? - but there is still a real need for industrial uses - could not some governments decide that it is illegal to own/stack silver and force people to sell back to the government? In desperate times any scenario is possible~!
All they have to do is make it a criminal offence to possess a certain amount of silver (a bit like drugs or guns!) and most ordinary law abiding citizens, rather than risk imprisonment would own up to their cache. :o
Of course, they would buy it back at a price they set, not real market value!
Click to expand...

If silver ever reaches those prices, then either it will become economical to recycle it, or the market will find a substitute
 
Looking at how much Asia is buying at the moment and the demand rising in western countries, I can see the supply of 'physical' silver running out a lot sooner than predicted.

Jungfrau reckons that 50% of silver mined is lost for ever, I can see that in many areas of industrial uses like solder it would be too difficult to recycle and many of its uses would be in a chemical form not the metal form. Gold does not form salts as easily as silver and does not have the many chemical uses that silver has and is therefore used mainly in the metal form and easier to recycle.
 
At the right price, even the 'difficult' forms of recycling become worth it.. and in salt form, silver can still be extracted with the right acid (obtained at the right price).

A high enough price encourages innovation.. Remember, before the Hall-Hroult process was developed, Aluminium was more valuable than gold.. which encouraged the development of the process. Could just as easily happen with silver recycling
 
jungfraujock said:
Thankyou Typhoon,

a couple of thousand ounces,they do not call you typhoon for nothing.

Could I share a couple of thoughts about Silver?

# 50% of all Silver mined is lost,it is used,never to be used again,and the big boys get most of the rest,and we get the scraps,but I am not complaining.

# China used to export 100's of million ounces,not that long ago,know they import millions of ounces.

# I have read that "all" silver could be gone by 20/20.what a thought,especially for your unattractive silver bullion.

# Silver and Gold,are related,by a distant unnamed half brother or sister.As I said Silver goes,and never comes back,and Gold is very different.Most of all the Gold ever mined is still with us,in jewellery and in vaults.

Have you ever watched the vid on youtube called GoldNomics,fantastic.Time 4 min 13 sec.Great facts,great music,and turn up the music.

Regards
JUNG(Dale)
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Quite right you are Jung. Excellent DVD, I saved it to my you tube favourites. I have been thinking lately about working on the gold stack as I only have a random selection of 1/10, 1/20, 1/4 and 1/2 oz coins, and a couple of 10gm bars presently. Its hard to know because gold costs a lot more and goes up more slowly % wise so you get a lot less to look at. Have to find a balance between economic common sense and a bloody expensive hobby hey?
 
@ projack .... the nazi's did what? Make it a criminal offence to possess a certain amount of silver? Or buy silver back at the price they (governments) set rather than market value? Or something else? This is a genuine query by the way. Not a challenge to your statement.
 
I've noticed recently over the past 2 weeks (just my personal opinion which I can't verify) that on Silverstackers the bargain drought seems to have ended, with prices for goods sold on the forum going back to pre-frenzy levels, with the occasional bargain appearing as it always use to.

Immediately after the silver price crash of 2011 the premiums to spot on all the precious metals traded on the forum became absurdly high with buyers going nuts and paying crazy prices.

Its good to see premiums are on average back to normal and I can continue to buy on the forum rather than from shop front dealers. I recently made a purchase and don't have cash left at the moment but will continue to keep an eye on trades in the forum.
 
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