Premium to Melt

[beauanderos]

I've read and seen a number of sources recently citing a growing silver shortage. When this happens seller's, both online and individual, will begin to ask a premium for junk silver and 999. There will be a price divergence, due in part to backwardation among other things, between the manipulated paper price and the physical price. You can see this already on ebay. People aren't actually bidding "too high," in an artificial manner they are "price-fixing" silver in a sense, because this is the price that other bidder's are establishing. In other words, you can't find silver at the London spot price on ebay. People are willing to pay more because they know they have to if they want to own physical silver. More and more listings are of fewer coins, smaller lots, and the few remaining lots of $100 face junk are lessening ever more with the price rise. Most buyers probably use the two to five percent discounts available to them, so ordinary bidders not "in the know" are already bidding five percent above melt to win listings... if they can. Anyone listing junk at melt for sale on the forum may just be looking forward to this coming event (price divergence from spot based on the presumption that, at any time, a spike from short-covering could occur) and thinking a bit ahead of the curve by asking for melt price for listed items, as opposed to other sellers discounting their asking price a bit (knowing that they would still recoup a greater amount than by paying feebay). So...open for discussion. Do you see a shortage developing in physical? Feel free to post links here. Does anyone else envision this scenario of "real" price outrunning spot, even though melt is beginning to rise pretty strongly? You need to be pretty bold so sell into this market, expecting that you can replace what you sold on a subsequent dip. The dip could very well come... but that doesn't mean the silver will be there for you to buy, or that it won't be priced at a premium essentially the same as it was prior to a pullback.

[whatsnext]

They bid more while it rises and layoff that premium when falling.

Anyway I looked at it like they were giving it to the guy/gal for fees. Silver people are not as much snipers either.

[68Camaro]

Conventional spot is price of 1000 oz london good delivery .999 bars. Believe price of smaller or other than .999 stuff will be either discounted from or at premium to price of large bars, depending on circumstances, which can and will change over time.

90% has very recently tended to be slightly discounted, but wasn't too long ago (several years) that 90% was selling at a significant premium. A shift back to a premium for 90% coinage could be happening.

[didou]

Isn't the very definition of hyperinflation ? Buyer and seller doesn't trust the paper system anymore and fix their own price for physical whatever the paper system said

Like you i started to see heavy premium on silver in ebay listing and buyer willing to buying it

[Coppercrazy]

Is anybody watching close prices on sterling scrap on ebay?There used to be a 10 to 15 %discount off of actual melt value,but I think that discount may be reduced if the bidders are expecting a rise in price.That stuff gets refined so theres always a discount,but has it reduced?

[argent_pur]

I think I may have to disagree, Ray, that people aren't bidding "too high" on ebay for silver. I'll assume that if people have access to ebay, they have a credit card, paypal account, etc... Meaning that they could just as easily buy from an online dealer like many of us do at a far lower price, even including the 3% CC fee most dealers charge. "Too high" is a relative term---they could be getting it cheaper. So, what is causing this "over-priced" market? Is it ignorance? or comfortability? If people can surf and find ebay surely they can google "gold and silver dealers". Point is, people don't "have to" go to ebay for silver, and they don't "have to" pay prices ebay sellers are asking--they're choosing to for some reason, what's the reason?

So, I'll go on record as saying that while I think ebay *can be* a place to find a good deal on silver, for the most part the prices they charge are anomalously high relative to the larger physical silver market.

[SilverFish]

I am less willing to buy and hold junk for the long term as spot rises. Don't get me wrong junk has its place in my safe and is a great option for new investors. That is what is driving junk sales now new investors . In Canada very few dealers will offer 80-90% of spot for junk. At 10x face that wasn't a big deal. Fast forward to 100x face, that stings a little more when you’re trying to sell $100 face. Meanwhile .999 will still sell at spot+.

With the recent run up in silver I can purchase junk for 60-70% of spot from Joe Public. When spot was 10x face for 80% people were insulted with offers for 8-9x face. Now that 80% is 23x face, those same people are selling for 15x. I keep all the dollars, halves and shiny stuff and flip the rest to buy more junk or gold maples.

As for ebay I don't even check it anymore, it's hard to determine a fair market value with emotional bidders. Also alot of the items being bid on are small lots or individual coins. Online dealers require a minimum order coupled with high insurance and shipping cost. This makes it difficult for the guy that wants a few coins to add to his stack. So they turn to ebay and bid with the attitude of "so what if I overpaid by $10 for silver maple at least I won it, what does $10 buy anyways"

[Know Common Cents]

During the past week or so, I've bid on at least 50 different silver eBay lots. Several were for the next day or two, but some were also for the same day (and even the same hour in a couple of cases).

I understand that people will tend to bid higher in an upwardly mobile market, but my bids are fair. Haven't won anything. I'm reluctant anyway to sink a lot of cash into silver at these high prices, but had hoped to snag a few nice rolls, etc. I bid at spot for everything and even more non-junk silver. Since many of the sellers have padded their postage and handling charges, that's another way for them to squeeze out a little more profit.

There are buyers being duped. No doubt about it. Look at Eisenhower Dollars on eBay. Many sellers have listed their Ikes as silver when they're actually clad. Those sellers may be the ones who are usually selling scrapbook supplies and not understanding what they have, but there are also uneducated buyers. Should I pay $220 for a roll of 1971 D "silver" Ikes? Of course not.

Easy to get swept up in the thrill of the hunt, but someone a lot smarter than me once made a statement about a fool and his money. I'm going to avoid eBay auctions for coins during the next couple of weeks. My time is better spend trying to find legitimate deals where both the buyer and seller feel satisfied with the outcome of the transaction.

[justoneguy]

I just got my ebat bucks certificate a few days ago,
i think everyone else did also.
I can't find anything reasonably priced to spend it on yet.
soon tho, yeah that's it, soon a deal

[beauanderos]

I just got my ebat bucks certificate a few days ago,
i think everyone else did also.
I can't find anything reasonably priced to spend it on yet.
soon tho, yeah that's it, soon a deal

Never even dawned on me that bidding would be stronger after issuance of the certificates. Next time I might have to wait a bit instead of being so eager to spend it.