Coin dealer premiums

[Lemon Thrower]

Some shady stuff going on again, but its just a taste of things to come.

dealers are raising premiums or taking product off the shelf. remember which dealers do this when you buy next.

a few years ago i placed an order with the President of NWT Mint because he assured me he had product in hand, but it took him 6 months to deliver. Silver at the time had crashed and I paid $4 over spot for the privilege of waiting 6 months!

anyway, this is a taste of things to come. as PMs get more dear, i expect that people will hold them tighter and supply will become an issue.

for example, apmex took all of their bullion off the market this weekend in anticipation of higher prices. sure, its their perogative but its also my perogative to do business with folks that treat me right.

[WizardTN]

Provident Metal still looks ok.

NWTM has a loooooong history of delayed delivery on any significant quantity.

[Know Common Cents]

Getting much easier to see who the good guys and bad guys are in this market. I'm all for someone making a profit (I'm not a charity, either), but to intentionally gouge potential PM buyers and sellersis something totally different.

I was always a fan of the now-ignored punishment of tar and feathering. While I don't have a supply of either tar or feathers, there are ways to deal with these jokers. Someone could set up a numismatic-related tar and feathers web site to offer their input on hucksters as well as the good guys. Sort of an Angie's List for bullion buyers.

Hmmmmmm. Sounds workable.

[natsb88]

6 months for NWT is normal, and has been for years, unless you order from their online store at higher prices.

Bullion dealers can sell at any price they darn well please, or choose not to sell at all. No offense, but I don't see how asking a higher price than you want to pay at the moment is "not treating you right." It's a free market. If you don't like the price, you are free to not buy, and if enough people do that it will affect the bottom line. But my guess is that enough people are willing to buy at those prices, or those prices wouldn't be there.

The idea of "gouging" doesn't hold water. No single bullion dealer controls the physical market, and there's no industry-wide association that controls the prices. When spot changes dramatically, the disconnect between spot and physical prices increases, at least temporarily. It has happened before, it is happening now, and it will happen again. If it's critical that you buy and sell at spot, trade paper contracts. But if you want any of the real benefits of holding metals, you best stick with physical, and take the paper price with a grain of salt.

[Market Harmony]

...The idea of "gouging" doesn't hold water. No single bullion dealer controls the physical market, and there's no industry-wide association that controls the prices. When spot changes dramatically, the disconnect between spot and physical prices increases, at least temporarily. It has happened before, it is happening now, and it will happen again. If it's critical that you buy and sell at spot, trade paper contracts. But if you want any of the real benefits of holding metals, you best stick with physical, and take the paper price with a grain of salt.

Words of wisdom, ladies and gentlemen. Thanks Nate.

[Lemon Thrower]

if you speak to the president of the company, and he says he has your product in stock, 6 months to ship is not appropriate. nate and MH, are you defending this behavior?

doubling premiums over the weekend or closing up shop is not appropriate in my book. i expect to pay a normal premium for physical but i'm going to avoid Apmex because of their business practices. what apmex did is legal and borderline ethical and i'm sure this is just the beginning of dealers jacking up premiums or taking supply off the market when it suits them. but this is all the more reason to do business with someone else.

the reason for my post in the first place was to draw attention to what apmex was doing - closing down shop until comex opened - to highlight this questionable practice and to suggest its the beginning of a trend.

[Treetop]

lemon thrower... Im with you on the guy who told you they had something in stock but didnt....

I couldnt however fault a company for raising or lowering premiums. Or pulling stock when the markets are not in their favor. they are in fact in business. this isnt a public service. It is a business. I see no moral obligation for them to sell their wares if it is not in their interests. especially in the ties we now find ourselves. Apmex got BURNED when they paid a few bucks over spot for ASEs then the markets tanked.

but the company who told you one thing, and did another... that is certainly messed up...

[Market Harmony]

if you speak to the president of the company, and he says he has your product in stock, 6 months to ship is not appropriate. nate and MH, are you defending this behavior?

doubling premiums over the weekend or closing up shop is not appropriate in my book. i expect to pay a normal premium for physical but i'm going to avoid Apmex because of their business practices. what apmex did is legal and borderline ethical and i'm sure this is just the beginning of dealers jacking up premiums or taking supply off the market when it suits them. but this is all the more reason to do business with someone else.

the reason for my post in the first place was to draw attention to what apmex was doing - closing down shop until comex opened - to highlight this questionable practice and to suggest its the beginning of a trend.

You shouldn't draw that conclusion about Nate and I. I specifically parsed a quote to which I responded. I support only those actions which I can control. If someone says that they will take your order and ship immediately and then doesn't ship immediately, then I can see an issue. But if the terms of the transaction are clear, then there's no issue here.

In regards to premiums... this happens all the time and not just in PM's... look at the bond market, or the options market. Hell, yesterday, the 2 year bond was trading at present value! This is what makes a market and we are all affected by it. I don't want anyone to tell me that a premium on PM can only be X, and I certainly wouldn't want my customers to tell me how to run my own business. There are other venues out there and some will be better than others. If you choose to deal with the devil, then you should know what to expect to get in return. But one thing should be clear... if you want the metal, then you're going to have to pay for it at present value, and that present value of physical is not solely dependent on COMEX spot

[natsb88]

if you speak to the president of the company, and he says he has your product in stock, 6 months to ship is not appropriate. nate and MH, are you defending this behavior?

No, if they tell you one thing and do another, that's not right. I was just pointing out that 6 months is in fact normal for NWT. If the president of the company promised a faster turnaround, and didn't follow through, then he is in the wrong. (If he just said the product was available, without specifying a date, then I would assume the normal shipping schedule).

doubling premiums over the weekend or closing up shop is not appropriate in my book. i expect to pay a normal premium for physical but i'm going to avoid Apmex because of their business practices. what apmex did is legal and borderline ethical and i'm sure this is just the beginning of dealers jacking up premiums or taking supply off the market when it suits them. but this is all the more reason to do business with someone else.

I don't see anything inappropriate or unethical about raising prices when demand increases. In fact, I believe that is a fundamental free market behavior. This whole idea that physical bullion MUST be tied to the COMEX price is laughable. MUST? Says who? A physical chunk of metal in my hands is worth whatever a buyer and I agree upon. The spot price could be $1 or $100, if the buyer and I agree upon a sale at $50, then it's worth $50. The spot price is an indicator of current market activity, it's not a binding price level. If you insist on buying at spot, there is an infinite amount of paper silver available to you. If you want physical, then you have to deal with the free market price for tangible metal, and not worry so much about COMEX contracts.

the reason for my post in the first place was to draw attention to what apmex was doing - closing down shop until comex opened - to highlight this questionable practice and to suggest its the beginning of a trend.

It may be the beginning of a trend, but I hardly find it questionable. If a company charging a higher price than you think they should qualifies as a "questionable practice," then there are an awful lot of questionable companies out there, in all industries.

[NiBullionCu]

US Mint Stops Selling Numismatic Gold Coins as Bullion Prices Soar

http://www.coinnews.net/2011/08/09/us-m ... ices-soar/

How about when the mint does it?