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 Replies: 32 / Views: 3,606 |
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Pillar of the Community
United States
3824 Posts |
How long do you think it will take for prices on common date circulated silver and gold coins that usually trade slightly above spot to reflect declining precious metal values? Lets say for example common date slightly circulated St Gaudens double eagles. Is there a significant lag time before dealers update their prices to reflect falling PM prices? Will they not budge of their prices because they would be taking a loss?
Thanks,
Joe2007
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Pillar of the Community
United States
2120 Posts |
We will see higher than normal premiums centered around spot until at least half of the drop has recovered.
Many deals hold, but the smart ones continue to sell to keep the customer base.
They understand the concept of a loss leader.
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Valued Member
United States
149 Posts |
i think the premiums will normalize soon. There is too much competition for anything else to happen.
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Pillar of the Community
United States
2168 Posts |
Premiums are so high because in the days before dealers purchased at higher spot prices and had no choice. Either raise premiums or not sell it. The premium on 90% halves was 20% yesterday at a local dealer, still not a bad price with low spot. I think things will stablize once the spot price does. Many many buyers of physical PM now not mamy sellers.
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Pillar of the Community
United States
5202 Posts |
Premiums likely won't drop until the merchants wholly exhaust the supply they purchased when prices were higher and get new stocks at lower prices. As I mentioned in a different thread, APMEX is still asking $1,621 for common date St. Gaudens Gold Double Eagles in AU condition, but are only offering to buy them at $1,394. That's a huge discrepancy, bordering on unethical in my opinion. If gold prices remain low, however, I expect the sale price to eventually come down. Of course, who is to say that gold prices will remain low? |
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Bedrock of the Community
13014 Posts |
Swift drops make sellers stubborn to crash their prices as opposed to small ones over time. It will all depend on where you look for how fast theyll come down. Most probably will keep them a little higher since they bought higher as long as people buy. If people stopped buying theyd adjust in a heart beat, but thats unlikely.
Im not a big gold person but depending on the coins there will come a point too where numismatic value takes back over. With todays gold prices a lot of coins that in the past were considered numismatic are considered bullion since the metal price outweighs the other value, but at some point in the drop if it kept going wed see that flip back around again
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New Member
United States
48 Posts |
If you go for a bullion gold coin, it will come with a fairly low premium. You can choose to buy those that are certified by the U.S. government as investment grade gold bullion coins.
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Pillar of the Community
Australia
7096 Posts |
With the price of Silver/Gold plummeting the way it is there WILL come a time when there is NO physical left to acquire . And yet the trading will still go on in Wall st and the rest of the world regardless of this  . It may get to a stage when the price of silver is only $15 per oz But it is impossible to get any physical metal  Edited by trout1105
04/17/2013 02:10 am
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Bedrock of the Community
13014 Posts |
Quote:
With the price of Silver/Gold plummeting the way it is there WILL come a time when there is NO physical left to acquire .
Itd only be temporary, you could crash it to 2003 levels tomorrow and if 2-3 months from now its the exact same place with no sign of moving the buying frenzy will die down and itll be everywhere again.
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Bedrock of the Community
Australia
21593 Posts |
Dealers of common gold coins will need to increase their margins for a few months before lower prices can be reflected in their sales. The lag time is dependent on how often they can turn over their inventory. The lag time will vary from dealer to dealer, but they have to remain competitive with each other. Customers have no control over this.
If they have bought when spot was $1,600 and is now $1,350 and they sell now, the margin will have to reflect the earlier higher buying price.
They should begin to sell at lower prices on the stock that has been bought at $1,350 after the higher price bought stock has been moved.
The strategy is to buy little when the spot price rises quickly, in case it drops soon after, and to buy as they need to replace stock, when they see prices rising slowly or are stable.
So far as the customer is concerned you make your decision as you see fit, according to your own requirements. Dealers have no control over this.
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Pillar of the Community
 United States
3824 Posts |
Luckily I was able to pick up a few things yesterday for reasonable premiums over spot since I'm a regular customer at the local coin shop. I think they were telling the majority of the walk-ins and the people calling the shop that they were sold out of gold & silver.
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Valued Member
United Kingdom
90 Posts |
The sad truth is that, many of the bigger online sellers won't reduce price until demand stops. This has little to do with buying new cheaper stock to cover their costs in the short term. As long as there's soo much purchasing demand they can barely keep up, why would they reduce their bigger premiums over spot when they can just make more money out of us. Sad but true, the expected drop in premium could take quite some time, so you just have to shop around to see which companies are willing to undercut their competitors.
Certainly in the UK, both BullionByPost and The Gold Bullion Co seem to be on some mutual agreement on sticking to a much higher markup over the spot price.
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Pillar of the Community
United Kingdom
1661 Posts |
BullionByPost how has this notice on their web site:
Record Orders!
Due to record orders we have had to set a temporary minimum order of £500. We also unable to offer usual next day delivery. Orders will be dispatched ASAP in the order that funds are received. We expect to dispatch most orders within 1 week.
The Gold Bullion Co
Monday, April 15, 2013
Due to unprecedented demand we are currently unable to guarantee next day and 1 - 2 delivery lead times for customer orders of physical gold and silver bars and coins. The recent drop in the gold and silver price has led to an exceptional increase in demand for physical gold and silver bullion products, from an afternoon gold fix of £1,028.81 last Monday, the gold price has today dropped to a spot price low of £877.00 per troy ounce - Private physical bullion investors have surged at the opportunity to purchase at the two year low.
We anticipate the majority of orders will be dispatched on time but would take this opportunity to alert customers to the current situation, we would like to apologise for any inconvenience caused and thank you for your custom.
Ken
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Valued Member
United Kingdom
90 Posts |
Yup even Atkinsons have stopped taking new orders cause they just have too many. As long as there's super high demand, there's no reason to reduce price further (though in general Atkinsons, is cheaper than BullionByPost and Gold Bullion Co.)
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Bedrock of the Community
13014 Posts |
Some have certainly been faster than others. I know of at least one selling ASEs in the 26 dollar range, they go fast usually since they don't take orders unless they have them in stock like some of the others do but its just all about turn over at this point. Once they unload the higher stuff the bigger ones will likely go back to normal for the US ones I've seen anyway. Not sure about what the dealers over there will do.
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Pillar of the Community
United States
3789 Posts |
@baseball
I think you pointed out to me that the US Mint is going to drop prices for their proofs... which is GREAT news for collectors such as myself that LOVE proof eagles silver and gold.
I think what happens is gold and silver continue to go lower. folks I am sure, even now, thoughts are creeping into their minds if they did the right thing buying gold and silver. Time goes on and price keep dropping. some start to sell and dump, and it will cascade from there.
Again, like everything else, it will take time for this to play out. But as the public starts seeing that they are underwater by hundreds of dollars per ounce on their gold, they will puke it up and that's going to push coins prices down.
HOWEVER, I can picture savvy collectors and bargain hunters jumping on anything that has even the slightest premium to it,, they[;ll spot this discount and those coins will be the first snatched up.
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Replies: 32 / Views: 3,606 |
Posted 04/15/2013 5:12 pm
