Visit to local coin shop prices and premium

[coincrazy]

Went into a local coin shop that specializes in pretty much everything metal and coins in Birmingham MI.

Spot at time of entry 9:30AM 2013-04-16 was ag@23.75, au@1395.90

1/2 AGE - 754
1/4 AGE - 384
Generic Round - 27
ASE - 28.71

[Jonflyfish]

extortion

[OneBiteAtATime]

Market

[coincrazy]

After hearing the silver prices I did pick up a 1/2 AGE. Seems high but is much cheaper than last time I acquired there and I have it in possession today with no tax or shipping costs. I'd say it's market as I can find them online cheaper but not without huge minimum price orders or weights.

[reddirtcoins]

extortion

just look at what they want for the new 2-coin W set coming out in a few weeks... Now that's extortion!

[pennypicker]

extortion

Yes, a 21% premium on an ASE is extortion.

Homey doesn't play that game....

[68Camaro]

Market

Yep, price rules. If the supply chain actually takes delivery of $23 silver eventually price will come down at the local one-ounce level, but until then there is little refill of most of the supply, and demand has risen, so premiums (relative to spot) remain high. Actually the metal would still be considered "cheap" by the standards of just a few weeks ago, so isn't it interesting how other people selling paper for material that doesn't exist can influence the perspective of value of physical.

Another case in point - the fundamental manufacturing price of ammo remains unchanged, and because sellers aren't yet ready to tick off their loyal customers for what retailers perceive as a temporal issue, so the most part retail prices haven't yet changed - when ammo can be sourced. But because demand has temporarily outstripped supply the real street price of ammo - what you have to pay if you actually want physical ammo - has gone up by 2x-5x. Eventually the supply chain will re-fill the pipeline and sate the demand, and the street price will normalize, but until then the market rules.

[angel2004]

I defense of the dealers (I am not a dealer), spot dropped so fast that most of their stock was purchased at much higher prices. I guess they can either say I have nothing to sell or sell with the higher premiums. As soon as the spot prices stabalize there may be premiums gradually back to normal.

[mtldealer]

I went in a couple weeks ago and offered to buy 40 oz of engelhard miners from my local LCS. They wanted 38, when spot was 27 because "there is a big premium for those" - Yesterday I went in and picked them up for 29 . The guy said... Why don't you bend me over, I'm getting killed today. I asked him how the last couple years have been? He didn't say anything else.

[neilgin1]

Market

damn right...market, that's where the price is...don't like counterbid, see if he hits you.....i'd say $560 on a roll of 20 ASE's.....$560?....DONE! where they at?

bid $500 on one roll! whats here?.....oh gee whiz, that's only 40 ounce, guess i'm a f###ing peon. huh?

well, this peon might not be struggling with 1,000 toz millstones...but this peon has a got a nice stack, all payed for...this peon, when he goes to town, drives out a dirt road, and the biggest threat matrix I might encounter is Bambi deciding she wants to run in front of the truck, instead of 500 miserable rat "youts" pretending its frigging "World War Z"....which is whats its going to be when the lid comes off this thing....

[Cent1225]

I was able to buy several circulated eagles today at the pawn store for spot +$1.
Also got some 90% at 17x and some rolls of 40% at 7x.
Been going there for some time and know the people. I have to work on them every time I go in but it is worth it when I bring it home. I think by now they would know where I am with pricing, but I think they like to negotiate.
I will tell you it felt great buying at these prices. Just wish they had more of it. They are out now.

[neilgin1]

I was able to buy several circulated eagles today at the pawn store for spot +$1.
Also got some 90% at 17x and some rolls of 40% at 7x.
Been going there for some time and know the people. I have to work on them every time I go in but it is worth it when I bring it home. I think by now they would know where I am with pricing, but I think they like to negotiate.
I will tell you it felt great buying at these prices. Just wish they had more of it. They are out now.

yeh buddy!!!!...I aint envious, but i'm a little green with envy...I sure do love those rolls of 40's....never seen a circ Eagle...is that kinda like About Uncirc?...just a tad bit of wear?

nice purchases....can I have them?...please...(lol)...wanna dance?...here, lets put on Gangnam Style...ready?...lets hit it!

[messymessy]

I was able to buy several circulated eagles today at the pawn store for spot +$1.
Also got some 90% at 17x and some rolls of 40% at 7x.
Been going there for some time and know the people. I have to work on them every time I go in but it is worth it when I bring it home. I think by now they would know where I am with pricing, but I think they like to negotiate.
I will tell you it felt great buying at these prices. Just wish they had more of it. They are out now.

Wow. Were they desperate or did their calculator not work?

[LooseChange]

I was able to buy several circulated eagles today at the pawn store for spot +$1.
Also got some 90% at 17x and some rolls of 40% at 7x.
Been going there for some time and know the people. I have to work on them every time I go in but it is worth it when I bring it home. I think by now they would know where I am with pricing, but I think they like to negotiate.
I will tell you it felt great buying at these prices. Just wish they had more of it. They are out now.

I swung into the largest coin shop in the city yesterday evening. Spot was $22.91 when I went in.

Their Circulated ASEs/JM Rounds/Ugly Englehards were all Spot + $4
Uncirc 2013 ASEs were $28.20 + Tax.

[AirTractor]

visited mine. Really didn't want to sell anything. Said little to nothing was coming in. Closed yesterday...

[Cent1225]

yeh buddy!!!!...I aint envious, but i'm a little green with envy...I sure do love those rolls of 40's....never seen a circ Eagle...is that kinda like About Uncirc?...just a tad bit of wear?

nice purchases....can I have them?...please...(lol)...wanna dance?...here, lets put on Gangnam Style...ready?...lets hit it!

The circulated Eagles have some wear and crud on them like a 3-5 year old quarter or dime. They get these at weekend coin roadshows where people are desperate to sell and need the money. Some of the quarters and halfs I got today were loose in a tray, but mirror proof, like they had been broken out of a proof set. I also buy cut open and damaged mint sets for spot. They are only interested in selling for he silver value.
Like I said, I have built up a repoire with with these people by spending money every week. I have seen others while standing at the counter pay spot + $4 or $5 for the same thing I am buying for spot or spot+$1. I just wait to deal with them when no one else is around.
Perhaps we can talk privately about those 40%'s.

[Jonflyfish]

Market

damn right...market, that's where the price is...don't like counterbid, see if he hits you.....i'd say $560 on a roll of 20 ASE's.....$560?....DONE! where they at?

bid $500 on one roll! whats here?.....oh gee whiz, that's only 40 ounce, guess i'm a f###ing peon. huh?

well, this peon might not be struggling with 1,000 toz millstones...but this peon has a got a nice stack, all payed for...this peon, when he goes to town, drives out a dirt road, and the biggest threat matrix I might encounter is Bambi deciding she wants to run in front of the truck, instead of 500 miserable rat "youts" pretending its frigging "World War Z"....which is whats its going to be when the lid comes off this thing....

Damn wrong... Extortion! These small time dealers know where the prices are set in liquid markets. they typically (sadly) don't hedge and use lies like "demand is high" to try and justify gouging only later to then drop the price to make a deal. Face it- the dealer may be sitting on inventory that he paid higher than the prevailing market and so a (poor) business decision is made to extort folks (hopefully unknowing in their paradigm) and recoup losses. It's not about the fungible commodity supply and demand.

Cheers!

[Jonflyfish]

Talk about greed- Many examples offered here about the dishonest extortion by small time dealers who are likely sitting on inventory MtM losses so they gouge unknowing folks and will be straight with the buyer who knows better when no one else is around. I hope unhedged upside down inventory price shocks drive all dishonest dealers out of business...

Cheers!

[OneBiteAtATime]

JFF, I respect your opinion, but you're just wrong here:

ASE's:
Goldmart- $4.49 over spot Delay/Backorder
ProvidentMetals $5-$6 over spot Delay/Backorder
Gainsville Coins $6 over spot Delay/Backorder
Westminster Mint $5 over spot Delay/Backorder until 5/6
Quality Silver Bullion $5.25+ over spot "Silver Eagles are Delayed up to 3 weeks."
Apmex 2013 $6 over spot Delay/Backorder
JMBullion $5 over spot Delay/Backorder


SOLD OUT
Apmex Random Date- SOLD OUT
Apmex Damaged Silver Eagles SOLD OUT
Apmex 2012 SOLD OUT
SilverTowne SOLD OUT
Monarch Precious Metals SOLD OUT
Kitco Not shipping to the US

LCS - Charge what you can get.

[Thogey]

I don't understand this argument. I never will understand why folks are offended at prices they feel are unreasonable.

The bullion dealers and coin shops are not withholding medicine, gasoline or god forbid someones social security gubmint cheese.

If you don't like the price, make an offer. As far as bullion goes no one is morally obligated to sell. It's all perceived value anyway.

The ammo situation is a perfect example. If you really need it, it is available for a price. But you better be at Wal-Mart at the right time if you want cheap prices.

RC members are all irritable, just like the last big dip.

[Jonflyfish]

JFF, I respect your opinion, but you're just wrong here:

ASE's:
Goldmart- $4.49 over spot Delay/Backorder
ProvidentMetals $5-$6 over spot Delay/Backorder
Gainsville Coins $6 over spot Delay/Backorder
Westminster Mint $5 over spot Delay/Backorder until 5/6
Quality Silver Bullion $5.25+ over spot "Silver Eagles are Delayed up to 3 weeks."
Apmex 2013 $6 over spot Delay/Backorder
JMBullion $5 over spot Delay/Backorder


SOLD OUT
Apmex Random Date- SOLD OUT
Apmex Damaged Silver Eagles SOLD OUT
Apmex 2012 SOLD OUT
SilverTowne SOLD OUT
Monarch Precious Metals SOLD OUT
Kitco Not shipping to the US

LCS - Charge what you can get.

I assure you that the wholesale physical market is the spot price. Retail lags in price improvements the same way gas at the pump or mortgage rates after wholesale price improvements. Just because the guy filling his '82 Oldsmobile pays a premium over the FOB spot price doesn't mean that the supplier didn't pay FOB a tthe rack.
Retail absorbs wholesale inventory price shocks. If there was a financial market for retail coins you could rip the dealers in arbitrage. But that doesn't exist and that's why you see dealers with prices all over the board after invventory valuation shocks. The metal is fungible. Dealer X and his roll of common ave wear '64 quarters aren't any more valuable than the similar roll elsewhere. The more market participants with the ability for positive and negative arbitrage provide a transparent price discovery. Without it, retail customers are simply price takers.
Cheers!

[OneBiteAtATime]

I guess it's a little different in a small town than what you're referring to, Jon.

Here, I have the internet companies or the LCS. There is no other market in rural Illinois. So if you want a commodity that is in limited supply LOCALLY, you pay what the owner asks; or ask for a better price.

Any commodity is worth the # where someone is willing to sell it and someone else is willing to pay the price. Surely, a 1200 sq ft 3 bed/2 bath home is worth a different price in Suburban Chicago than it is 50 miles west of Springfield.

[Jonflyfish]

I guess it's a little different in a small town than what you're referring to, Jon.

Here, I have the internet companies or the LCS. There is no other market in rural Illinois. So if you want a commodity that is in limited supply LOCALLY, you pay what the owner asks; or ask for a better price.

Any commodity is worth the # where someone is willing to sell it and someone else is willing to pay the price. Surely, a 1200 sq ft 3 bed/2 bath home is worth a different price in Suburban Chicago than it is 50 miles west of Springfield.

That explains a lot for why there are central liquid trading locations for price discovery. The more participants in a liquid market, the more transparent the price. Being a price taker for a fungible commodity in one location and selling later in another is a location basis risk.


Cheers!

[OneBiteAtATime]

So one more question. If

I assure you that the wholesale physical market is the spot price.

but the LCS doesn't buy in the wholesale physical market - It buys in the local market - how does that make them extortionists?

Case in point - when I visited the LCS today, they had no 999 silver on the racks, no one selling. IF someone brought in 50 ASE that they demanded spot + $2 for, and the LCS KNEW due to local shortage that they could sell them for spot +$4, would the LCS be engaged in extortion? Or the seller? Or both?

[Jonflyfish]

So one more question. If

I assure you that the wholesale physical market is the spot price.

but the LCS doesn't buy in the wholesale physical market - It buys in the local market - how does that make them extortionists?

Case in point - when I visited the LCS today, they had no 999 silver on the racks, no one selling. IF someone brought in 50 ASE that they demanded spot + $2 for, and the LCS KNEW due to local shortage that they could sell them for spot +$4, would the LCS be engaged in extortion? Or the seller? Or both?

What prevents them from buying (or selling for that matter) wholesale? I've had quite a few conversations with dealers who participate in the wholesale markets.
Cheers!