Where are Brits buying silver coins in this time?

[bluemoon]

EM has their coins all "sold out" (I'm dubious), British dealers have their VAT on top, I'm looking to get a tube of 1oz silver Britannias for a half reasonable price.

[Pete]

EM or GS.be so keep checking but you might have been caught napping as the shelves are stripped bare.

[bluemoon]

42 minutes ago, Pete said:

EM or GS.be so keep checking but you might have been caught napping as the shelves are stripped bare.

Caught napping I was! But I didn't think people panic buy silver. If they do then they need to sort out their priorities! My hunch is that the dealers are holding onto the main coins until things settle down, but that's just my hunch.

[HawkHybrid]

let's say a dealer have shipped coins at $14 and now the price

is $12. they are not going to sell their coins at $12+profit

(which is the current going rate) because they don't have any

coins bought at $12. they can still offer (those willing to buy

them) the already shipped $14 coins at $14+profit. if you

want the $12+profit coins then you have to wait for those to

actually arrive at the dealers before they can be made available

for your order. physical silver takes time to move from one place

to another. the physical market takes time to be updated with

the new prices.

think of it like having goods on back order.

 

HH

[bluemoon]

44 minutes ago, HawkHybrid said:

let's say a dealer have shipped coins at $14 and now the price



is $12. they are not going to sell their coins at $12+profit



(which is the current going rate) because they don't have any



coins bought at $12. they can still offer (those willing to buy



them) the already shipped $14 coins at $14+profit. if you



want the $12+profit coins then you have to wait for those to



actually arrive at the dealers before they can be made available



for your order. physical silver takes time to move from one place



to another. the physical market takes time to be updated with



the new prices.



think of it like having goods on back order.



 



HH

Good take. I don't suppose you know how often EM or gs.be get deliveries? I suppose I could always ask them. But EM have coins on "pre-sale" which I assume means they can source their coins now and then deliver when they arrive. So they still could charge according to current spot levels. Or maybe I'm asking too much of them since they're a business.

[TonyS]

The last I bought was from Suisse gold. I’ve been waiting a month for an order from Bairds.

[Pete]

15 hours ago, bluemoon said:

 

 

Good take. I don't suppose you know how often EM or gs.be get deliveries? I suppose I could always ask them. But EM have coins on "pre-sale" which I assume means they can source their coins now and then deliver when they arrive. So they still could charge according to current spot levels. Or maybe I'm asking too much of them since they're a business.

 

 

Both EM and GS regularly show pre-sale coins.
I have a few grand tied up with both right now.
If you order presale the price is fixed and you also need to pay within their contract window of a couple of days.
If the unit price drops before they ship, and that could take 3 or more weeks, then you will kick yourself for ordering early, but when prices have collapsed, as they have right now, and you think they can only go up, then you can get smug.

[Gabriel13]

Interesting, I wasn't really thinking of it that way HH. 

So are you suggesting that when the dealers buy get more coins in with the lower spot level we should see the price of the coins etc fall, or given the demand would it be fair to say they would just add a larger premium on what they buy in as stackers of physical are prepared to pay it even when the spot is low?

What I'm trying to work out is whether say £14 Oz is the floor for the physical given that you can't source anything cheaper elsewhere and there is this rush on silver?

[HawkHybrid]

following on from my example

if the spot price stays at $12/toz long enough for

dealers to receive their shipment of $12 coins, then

they will sell their newly received $12 at the going

rate which is $12+profit. precisely as intended.

they are not rip off merchants as what some are

thinking. they do however need to average a profit to

stay in business. artificially keeping prices inflated

when competing dealers are listing $12+profit coins

gets them nowhere.

 

I wouldn't use the floor price idea for silver. a lot of silver

is mined as a by product so this introduces many

variables on what it cost to produce. additionally in theory

mines can stay in production whilst making a loss if

funds are available to buffer that loss. the floor price for

silver is usually used by silver pumpers to put a kind of

guarantee minimum on the price.

(note how the falling oil price usually reduces the ~25%

energy cost that averages in the pm's mining industry.

if oil remains low then expect average cost/toz to be

reduced)

people are flexible, numbers are not fixed.

 

HH

[Gabriel13]

Thanks HH some good points noted 👍

[justabloke]

I'm thinking of purchasing some 500gm bars from Bairds. Is it reasonable to be concerned that delivery may be delayed? Cheers

[Mcgrimes]

19 hours ago, justabloke said:

I'm thinking of purchasing some 500gm bars from Bairds. Is it reasonable to be concerned that delivery may be delayed? Cheers

The website says a 3 week delay

[Wonger]

On 19/03/2020 at 15:03, HawkHybrid said:

following on from my example

if the spot price stays at $12/toz long enough for

dealers to receive their shipment of $12 coins, then

they will sell their newly received $12 at the going

rate which is $12+profit. precisely as intended.

they are not rip off merchants as what some are

thinking. they do however need to average a profit to

stay in business. artificially keeping prices inflated

when competing dealers are listing $12+profit coins

gets them nowhere.

 

I wouldn't use the floor price idea for silver. a lot of silver

is mined as a by product so this introduces many

variables on what it cost to produce. additionally in theory

mines can stay in production whilst making a loss if

funds are available to buffer that loss. the floor price for

silver is usually used by silver pumpers to put a kind of

guarantee minimum on the price.

(note how the falling oil price usually reduces the ~25%

energy cost that averages in the pm's mining industry.

if oil remains low then expect average cost/toz to be

reduced)

people are flexible, numbers are not fixed.

 

HH

Well if I was a dealer I would be hedging my purchases using the futures market and selling it at a price that covered all my costs and gave me a little profit, any other business model would be complete suicide, Kitco clearly explains this in a recent video, do you really think that there are dealers with stocks of coins bought at $48 that are refusing to sell at $20 because they paid $48? 

[HawkHybrid]

7 minutes ago, Wonger said:

do you really think that there are dealers with stocks of coins bought at $48 that are refusing to sell at $20 because they paid $48? 

 

yes. see those older date coins listed at higher premiums?

part of the reason is that many of those who bought at a

higher price are unwilling to drop their prices.

you've never seen old stock listed at silly high prices in

other shops before?

 

HH

[Wonger]

2 minutes ago, HawkHybrid said:

 

yes. see those older date coins listed at higher premiums?

part of the reason is that many of those who bought at a

higher price are unwilling to drop their prices.

you've never seen old stock listed at silly high prices in

other shops before?

 

HH

Ok HH  you as a dealer pay $48 for your coins, 6 months later the coins are $20, are you saying you will get a $28 premium on a 6 month old coin? Good luck!🤣

[Wonger]

Towards the end he describes the drastic increase in covers in recent days from 10-15 to 300-400, a cover means to reduce the futures short position because the physical silver is being sold, its how a dealer manages risk period!

[HawkHybrid]

4 minutes ago, Wonger said:

Towards the end he describes the drastic increase in covers in recent days from 10-15 to 300-400, a cover means to reduce the futures short position because the physical silver is being sold, its how a dealer manages risk period!

 

that doesn't even make sense.

would a dealer not open new short positions for the

new stock that is coming in to replace the stock that

was sold. ie dealers short position should be consistent

to the size of the flow of their stock. a dealer who sells

1 toz a day is going to have a consistent short position

of 1 toz for every day that the business operates. every

day each previous days short is close but a new short is

opened for the new stock ready to be sold the next day.

 

it costs to hedge, not everyone does it. dealers that are

not hedging the price movements would explain the rise

in premiums.

 

HH

[Wonger]

If a dealers stock did not reduce when its being sold then they would not need to cover their shorts, he clearly explains this, and no the premium rise is not because some dealers do not hedge, because those dealers do not exist, it would be gambling and not a business!

[HawkHybrid]

22 minutes ago, Wonger said:

If a dealers stock did not reduce when its being sold then they would not need to cover their shorts, he clearly explains this, and no the premium rise is not because some dealers do not hedge, because those dealers do not exist, it would be gambling and not a business!

 

the short covering are not dealers removing their hedges

(as they don't plan to open shop next week  ). those who

have successfully put hedges in place would continue to do

so. dealers need to replenish sold stock, as no stock means

no business.

 

HH

[Wonger]

26 minutes ago, HawkHybrid said:

 

the short covering are not dealers removing their hedges

(as they don't plan to open shop next week  ). those who

have successfully put hedges in place would continue to do

so. dealers need to replenish sold stock, as no stock means

no business.

 

HH

So why has Kitco recently increased covers from 10-15 to 300-400 amid a huge demand for physical from buyers? Are you calling this man a liar? 😁

[HawkHybrid]

4 minutes ago, Wonger said:

So why has Kitco recently increased covers from 10-15 to 300-400 amid a huge demand for physical from buyers? Are you calling this man a liar? 😁

 

peter hug

'if we ignore the economics of silver being an industrial

metal and there's virtually no demand for it...'

 

there is no huge demand for physical silver. the increase in

coins and bars demand is as a result of the fall in the price.

that price drop is a result of the traders realising that

industrial demand for silver is going to be below that of

last year. (border lock downs means people buy less non

essential commodities). industrial demand for silver accounted

for ~60% of total demand last year(also the lions share on all

previous years). coins and bars only made up ~20%.

the increase in demand of coins and bars needs to be very big

to make up for the loss in demand from industry.

https://www.silverinstitute.org/silver-supply-demand/

 

HH

 

[Wonger]

HH anwser the question, are you saying he is lying about the covers? 😁

[HawkHybrid]

3 minutes ago, Wonger said:

HH anwser the question, are you saying he is lying about the covers? 😁

 

probably not. you need to time stamp for me where he

actually says that dealers are covering/closing their

hedges.

14:58, peter hug 'as dealers were trying to hedge this

selling pressure that was occurring in the markets.'

this is very different to your interpretation of how

dealers must hedge to survive.

 

HH

[Wonger]

8 minutes ago, HawkHybrid said:

 

probably not. you need to time stamp for me where he

actually says that dealers are covering/closing their

hedges.

14:58, peter hug 'as dealers were trying to hedge this

selling pressure that was occurring in the markets.'

this is very different to your interpretation of how

dealers must hedge to survive.

 

HH

HH he clearly states at the end that Kitco have increased covers from 10-15 to 300-400 due to the increased buying, Ive already pointed that out and if you think that dealers do not hedge their holdings then i suggest you try it and see how long you last, end of conversation my friend! 😁 

[HawkHybrid]

18:00 peter hug 'there were wholesale spreads between

dealers, we're talking between banks...swiss bank, canadian

bank, russian central bank'

 

are these the kind of physical coin dealers you're referring to?

 

'300-400 cover trades...a cover trade is 100-200 transaction

on my retail side.'

 

the thread is about premiums on 1 oz britannias?

 

HH