Big Change to Small Change

[beauanderos]

With the ongoing price rise in silver, I foresee a few things happening, related to supply and demand. At present, at least in recent years, from the perspective of coin collectors and small-time accumulators, there has been a sufficient supply of junk silver coinage available from a variety of sources, although that supply is shrinking noticeably as lot sizes on ebay grow smaller in example. Supply has met demand. But, as the price continues to rise, due to unabating industrial demand and increasing investor demand, tightening supply will rise in price causing physical shortage regardless of temporary swings in paper-generated prices. This means you will no longer see huge junk silver lots on ebay, and at some point, it will be natural to expect only listings of individual coins or small coin lots, but certainly nothing exceeding $10 face. Those events will occur simultaneously with a significant price rise, perhaps to $40 or $75 an ounce. So... how does this affect you? If you could gaze into your crystal ball and see the impact on silver supply within the coming months... would it change your current demand for particular items? Would you still consider selling now, for a quick profit, when it's all but preordained that silver will begin to rise immensely in price? And that you may not be able to replace what you sold... at anywhere near the price you obtained? And which silver items will disappear first when a price rise occurs? Do you want to hang onto those you already have? Or even purchase more while the price is reasonable and supply exists? I foresee junk silver disappearing and BU silver remaining a few years down the road. How does that impact your buying/selling decisions?

[Rodebaugh]

I do believe we are in another "big melt" at this time. And yes the less desirable 90% is the coinage first to the smelter. Will apmex do away their $1000 face bags and go with $500 or $100 face bags…..Who knows…..they should right now IMO.

Nothing wrong with selling a little if you are buying even more, and setting on even much more.

[frugalcanuck]

I have never sold any silver or gold. Only Cu and Ni. I dont think I will ever have enough to sell any unless I desperately need to. I do believe that PM's are going to go up andit would not make any sense to sell if I think the price is going to go up in the future. As much as I like PM's I still value my paper money enough not to waste it or throw it away.

It actually surprised me when I fist fould Real Cent that there are many people on here actually selling silver and gold for paper money.

[beauanderos]

I have never sold any silver or gold. Only Cu and Ni. I dont think I will ever have enough to sell any unless I desperately need to. I do believe that PM's are going to go up andit would not make any sense to sell if I think the price is going to go up in the future. As much as I like PM's I still value my paper money enough not to waste it or throw it away.

It actually surprised me when I fist fould Real Cent that there are many people on here actually selling silver and gold for paper money.

People fall on hard times and need to do whatever they have to to raise cash. The same principle caused precious metals to dive in October 2008 when the stock markets crashed and bettors (I mean investors) got margin calls. They had to sell everything... throwing the baby out with the bath water. How dare they do that to my little silver baby!

[JadeDragon]

Also some people here sort 1/2s for silver and sell off some to raise capital to buy more halves to sort or to buy Gold or Ni they can sort for. I can't sort for silver in Canada very effectively so I've traded Ni for Ag.

[Thogey]

Silver has become a big asset for the Thogeys.

It's amazing how liquid it has become recently. We recently needed some money and between you guys and some local folks I was able to sell about 4500.00 worth in about 48 hours, at good prices!. It was almost as easy as a bank withdraw.

I hate selling silver. But sometimes we overbuy and have no folding cash to take care of things.

I also short our silver. That is ,line up a cheap price that someone has available and buy (go long), then sell my current silver to cover the purchase.

I'll sell silver we actually hold to trade up for better quality or more weight.

We will also buy silver (good deals) with money we don't have, ie credit, then flip it to take care of business expenses etc.

The end result is that our silver hoard is always growing. I actually can't believe how much we have been able to slowly accumulate over the years even when prices are high we've managed to increase.

Whenever I sell I try to have a plan the replace the silver. Having a big fat silver hoard has increased my family's peace of mind. Which is probably stupid as every investment we have ever made has been creamed at some point.

Maybe that's why someone said not to put you faith in treasure.

[beauanderos]

Maybe that's why someone said not to put you faith in treasure.

That's it! That must be why I've been getting all the incredulous looks. I always thought the admonition was not to put your fat in t-shirts!

[frugalcanuck]

I still dont know how people find silver at a low price. The best prices I find are useually on here.

[dakota1955]

I sell 40% silver and then buy 90% or other semi-key date coins that I need to fill a set

[Country]

I do believe we are in another "big melt" at this time. And yes the less desirable 90% is the coinage first to the smelter. Will apmex do away their $1000 face bags and go with $500 or $100 face bags…..Who knows…..they should right now IMO.

Nothing wrong with selling a little if you are buying even more, and setting on even much more.

Does anyone have a feeling if the scrap dealers are getting a lot of 90% to melt? If enough melting transpires, it could end up that the junk SILVER coins become hard to find and carry a hefty premium over spot one day, almost having numismatic value eventually.

[Rodebaugh]

Probably not much of a premium to soon, but someday maybe so.....but rest asure that each business day, Mon-Fri, these coins are being melted.....silver is needed.....orders have to filled.

[PreservingThePast]

Probably not much of a premium to soon, but someday maybe so.....but rest asure that each business day, Mon-Fri, these coins are being melted.....silver is needed.....orders have to filled.

Absolutely.

I've gotten very good at listening/overhearing conversations at coin shows and yes, a lot is being melted down. I don't understand the whys or wherefores. Just know that is what I am hearing. I'd think the 90% silver would be so easy to just continue to buy and then resell to another interested party. Don't understand why they feel the need to melt it down. But they do.

So the numbers for mintages listed in The Red Book, IMHO, are getting to the point of being somewhat worthless.

Enjoy your coin searches, everyone.

[Dvorak]

90% doesn't meet Good Delivery requirements for trading. And if what I read is anywhere close to true, there is a major shortage of Good Delivery Silver out there. Some of the slicks/culls I've seen in 90% need to be melted anyway, it's not even .7toz/$face let alone .715. You have to have some minimum standards in the 90% category.

[walt2727]

Original Post-"Or even purchase more while the price is reasonable and supply exists?"
I try to buy once a month no matter what the price is. I'm doing the whole "dollar cost averaging" they tell us about at work with our 401K.

[Lemon Thrower]

i'm skeptical that much 90% is being melted. why melt it? that is just extra work to make it more pure, but it is very liquid without being refined further.

in the late 70s, it traded at a significant discount to melt. it was profitable to buy at say 25% below melt, melt it, refine it, and then sell the .999 for close to 100% melt. you might pay 15% to have it refined but you come out ahead. don't see how you come out ahead doing it these days.

[misteroman]

i agree. Why not just melt those big 1000oz bars down and keep our pretty older coins