What is up with the high premiums on everything?

[silvercoinsforyou]

Silver is down to under $22 now yet I still see some silver selling for $30+ for common bars and rounds. I understand everyone is looking to jump into the market while silver is low, but for people to be paying some much above makes no sense right now. I understand Pamp and Englehard, and the government issued rounds, but some of the other stuff should not have such a high premium.

Are people just being over zealous? I am fairly new to the silver bullion game, but have been dealing with Silver US coins for awhile, not the same category right?

 

 

[Deerefan8420]

In my own opinion, the bullion dealers seem to raise their premiums when the market is in a downward trend because they know investors are buying. And when the market is on the upside, they lower premiums to attract buyers into making purchases at higher spot prices.

 

Let's take APMEX for example. I have bought from them before. I used to buy bars and rounds from them but now that I have some of my own equipment for making bars and rounds, I only buy the .999 fine industrial silver, or "silver shot/grain" as it is sometimes referred to. Their .999 silver shot usually sells for .99c per ounce over spot. A couple Sundays ago, the spot price of silver dropped below $21 per ounce soon after the market opened. I was going to make a large purchase that night until I noticed that the premium had gone up from .99c to $1.99 per ounce over spot for the exact same product. So needless to say, I did not make my purchase and found another dealer who was offering the same .999 fine silver shot for .79c per ounce over spot.

 

I understand the rules of supply and demand but do not understand the aspect of raising premiums when the markets are down. Are they trying to recoup some of their losses through the higher premiums?

 

 

[BruceS]

In my own opinion, the bullion dealers seem to raise their premiums when the market is in a downward trend because they know investors are buying. And when the market is on the upside, they lower premiums to attract buyers into making purchases at higher spot prices.

 

Let's take APMEX for example. I have bought from them before. I used to buy bars and rounds from them but now that I have some of my own equipment for making bars and rounds, I only buy the .999 fine industrial silver, or "silver shot/grain" as it is sometimes referred to. Their .999 silver shot usually sells for .99c per ounce over spot. A couple Sundays ago, the spot price of silver dropped below $21 per ounce soon after the market opened. I was going to make a large purchase that night until I noticed that the premium had gone up from .99c to $1.99 per ounce over spot for the exact same product. So needless to say, I did not make my purchase and found another dealer who was offering the same .999 fine silver shot for .79c per ounce over spot.

 

I understand the rules of supply and demand but do not understand the aspect of raising premiums when the markets are down. Are they trying to recoup some of their losses through the higher premiums?

 

 

Deerefan do you mind me asking where did you find shot for 79c over?

 

[silvercoinsforyou]

Deerefan, you have me intrigued, I am interested in making my own bars as well and have been watching videos on youtube on how to do so. Any info would be appreciated. Especially where you get that silver from for $.79 over spot.

[silvercoinsforyou]

Just found this on Ebay, seems high right?

 

http://www.ebay.com/itm/999-PURE-silver-1-TROY-OZ-Nuggets-Shot-Bars-Rounds-Bullion-New-Low-Price-/140990323326?pt=LH_DefaultDomain_0&hash=item20d3ad9a7e

[Deerefan8420]

I bought it from Provident Metals. Their 10 ounce bags are .79c per ounce over spot. Their 100/500 ounce bag of silver shot is only .49c per ounce over spot!

 

Deerefan, you have me intrigued, I am interested in making my own bars as well and have been watching videos on youtube on how to do so. Any info would be appreciated. Especially where you get that silver from for $.79 over spot.

 

I bought an electric melting furnace last year. I was tired of paying the high premiums for silver so I decided to produce my own bars and rounds. The furnace was about $450 and came with 1kg/2kg capacity graphite crucibles. I purchased a few different sized graphite molds and some custom made hallmark stamps for my bars/rounds and got to work. The initial investment is expensive but it pays for itself over time. I had my entire setup paid for in less than 2 months. And that was partly due to a good market and the low premiums! Having a good customer base and being able to offer lower prices(and still make a profit) over the competition helps as well!

 

 

[Deerefan8420]

Just found this on Ebay, seems high right?

 

http://www.ebay.com/itm/999-PURE-silver-1-TROY-OZ-Nuggets-Shot-Bars-Rounds-Bullion-New-Low-Price-/140990323326?pt=LH_DefaultDomain_0&hash=item20d3ad9a7e

 

WAY too expensive!!

[MarkFeld]

" What is up with the high premiums on everything?"

 

While there are, no doubt, high premiums for some things, the thread title presumes a situation that does not exist.

[silvercoinsforyou]

Is provident metals the only place you deal with or are there others who sell as well?

[Deerefan8420]

Provident is where I get my silver shot. I rarely ever buy bars/rounds anymore. I buy a few things from APMEX here and there but that's only if I can't find it from other sources or if I'm buying for someone else.

[silvercoinsforyou]

Isn't it expensive to make your own bars? The fuel used to torch the silver? There is not alot of profit I would think, I see how much they are selling the silver shot for, the most you could be making is a few dollars I would think.

[Deerefan8420]

I have an electric furnace. No fuel, No gas, no torches. Just an induction coil and 110 regular household electricity. From what I can tell, it doesnt use much electricity either. It takes about 20 minutes to get to temp and then I can melt and cast for 3 hours before I have to shut down for the cool down period. If I have the metal, I can melt and cast about 25-30 1 ounce bars, or 15-17- 5oz bars, or about 8- 10oz bars in 3 hours. After a 2 hour cool down period, I can do it all over again. And I've made more than "a few dollars" with it as well.

[silvercoinsforyou]

Sounds really cool, I wish I could afford to do what you have done. What name do you sell under, I may check you out. Whats your selling prices?

[FishyOne]

Deerefan: Have you had trouble selling the bars? I've heard of people making their own bars then struggling to sell them because of purity concerns.

[silvercoinsforyou]

He is buying .999 Silver shots so there should not be any purity issues. He is melting and forming the bars and rounds from that.

[FishyOne]

He is buying .999 Silver shots so there should not be any purity issues. He is melting and forming the bars and rounds from that.

 

But the buyer doesn't know that. When sold on secondary markets, they are no name bars from somebody that nobody knows, hence people don't want them.

 

There were guys on another forum doing this who gave up because of credibility issues.

[silvercoinsforyou]

Part of selling is reputation, If you have established one on ebay or these forums for example, that should not be a issue.

[FishyOne]

Part of selling is reputation, If you have established one on ebay or these forums for example, that should not be a issue.

 

Then you turn around and try to sell it to who? Home-made poured bars look very amateurish (no offense Deerefan). Selling these on the secondary markets is tough because buyers don't know what they are.

 

Hundreds of guys have done this in the past and all quit.

[silvercoinsforyou]

He could use a scale and have them weighed and noted as he sells his bars, and he can mark his bars. Like I said for the right price, people will try new things like his bars and rounds.

[FishyOne]

He could use a scale and have them weighed and noted as he sells his bars, and he can mark his bars. Like I said for the right price, people will try new things like his bars and rounds.

 

Yes, hundreds of people have done this in the past. It is not difficult. There is no way to verify purity without an assay on every piece. A few people buy them as a novelty and don't worry about purity or re-sale. Astute buyers would never buy them in any quantity.

[Deerefan8420]

I've not had any troubles with selling any of the bars that I've made. I sell my bars to local buyers and I guarantee all my bars. If anyone can prove that they are not .999 fine silver, I will buy the bars back and will pay for any testing that was done. So far, nothing has been returned! I feel confident enough in the bullion dealer, in this case Provident Metals, to provide me with .999 silver shot and I pass it along to my buyers. I don't even charge a large premium for my bars either. I have my own hallmark stamps and I stand behind each and every bar I've sold. As for selling them back to other bullion dealers

 

And no offense taken Fishy! If I was a professional dealer, I could produce pressed bars and charge huge premiums!! Haha! Silver bugs around here don't like to pay the huge premiums and even higher shipping costs.

[wdrob]

Deerfan I don't think you ever released your outlet for your silver production resale. Is it your website you were working on? If so I have seemed to have lost it somehow. Re post that again please regardless of whether that is the outlet or not.

 

High Premiums? My opinion; dealers would just as soon sit on stock and maybe make a sell every now and then ( probably selling more at high premiums than we would think) than to take a huge loss on their existing inventory.

 

Let's face it; Gold and Silver have really been hit hard lately. I noticed round two happened yesterday. Pretty good dip. Not quite the plunge a month ago but still .... heading down and when it does it seems to make quite a drop. I noticed that about the same time Bitcoin dropped from about $125.00 or $130.00 or so to just under $93.00 when I looked. I see that it has now climbed back up to just over a $100.00 and I think it recovers faster than Gold and Silver has.

 

I know the mere mention of Bitcoin makes some laugh but I have had some success with it's volatility and rebounds. There is even at least one Gold and Silver dealer that accepts Bitcoin. Buy Bitcoin at $93.00 ... it rebounds back above $110.00 or so and I have found that for some reason they do not react quick enough and I have cashed in for Silver and Gold and got more PM than I could have with cash. I guess they will catch on eventually and either implement better API's or go out of business.

 

But you have me intrigued on the process Deerfan, not for resale, but for personal acquisition of Silver. Let me know more when you can.

 

 

 

 

[FishyOne]

...And no offense taken Fishy!...

 

Glad to hear that Deerefan8420. You have made many quality posts that are interesting and entertaining. I appreciate your contributions.

 

This particular issue regarding making your own silver bars is somewhat dangerous both literally and figuratively. It's important to caution people about the dangers lest someone lose an eye or hand.

[michael]

What is up with the high premiums on everything?

 

its called the free market economy and based on market conditions/perceptions and sellers of bullion items can put anything that they want on something based on their perceptions of what the market should charge/bear

 

for example lets say tomorrow silver goes down to 5 dollar a troy ounce

 

i can almost say that the day after at a show the premiums will be 300% if not more to the point where many will just not choose to sell at all

 

such is the free market system

 

 

[Deerefan8420]

...And no offense taken Fishy!...

 

Glad to hear that Deerefan8420. You have made many quality posts that are interesting and entertaining. I appreciate your contributions.

 

This particular issue regarding making your own silver bars is somewhat dangerous both literally and figuratively. It's important to caution people about the dangers lest someone lose an eye or hand.

 

I understand the risks that are involved with making your own silver bars at home. I hope that I did not give the impression that I was advocating that the OP, or anyone else, follow suit and do the same for themselves. I was providing information into my own experiences and practices.

 

But I guess a disclaimer is warranted now that you mention it!

 

Warning:

Producing or manufacturing your own silver/gold bars and/or rounds is extremely dangerous if safety guidelines and practices are not followed! Molten metals can and will cause severe burns and in some cases can lead to the loss of fingers, toes, hands, or the eyes. Proper safety equipment should always be used when handling molten metals and hot crucibles and molds. Thick, heat resistant gloves(much like welders gloves) should be used at all times. A thick, heat resistant apron is also advisable. Eye protection is also highly recommended! Follow all warnings and safety precautions provided by the manufacturer of any melting equipment and casting molds. If for any reason you feel that you are unsure about your abilities in melting and casting your own precious metals or if you do not wish to purchase the expensive equipment it takes to produce your own bars/rounds, please stop what you are doing and contact me for a quote on the services I offer!

 

Edited to add: In all seriousness though, working with molten metals can be extremely dangerous. There are many risks associated with the process. If you are not experienced in any kind of metalworking, forging, welding, etc. I would recommend that you do not attempt to melt and cast your own precious metals at home until you have some training and basic knowledge in some form of metal working. Remember, Safety First!

[Eric Hazen]

I don't invest in silver but I can buy silver as an ETF at basically spot price. If you're going to go short term on metals this seems like the way, its a few clicks to buy and sell and no storage or shipping involved.

[FishyOne]

...And no offense taken Fishy!...

 

Glad to hear that Deerefan8420. You have made many quality posts that are interesting and entertaining. I appreciate your contributions.

 

This particular issue regarding making your own silver bars is somewhat dangerous both literally and figuratively. It's important to caution people about the dangers lest someone lose an eye or hand.

 

I understand the risks that are involved with making your own silver bars at home. I hope that I did not give the impression that I was advocating that the OP, or anyone else, follow suit and do the same for themselves. I was providing information into my own experiences and practices.

 

But I guess a disclaimer is warranted now that you mention it!

 

Warning:

Producing or manufacturing your own silver/gold bars and/or rounds is extremely dangerous if safety guidelines and practices are not followed! Molten metals can and will cause severe burns and in some cases can lead to the loss of fingers, toes, hands, or the eyes. Proper safety equipment should always be used when handling molten metals and hot crucibles and molds. Thick, heat resistant gloves(much like welders gloves) should be used at all times. A thick, heat resistant apron is also advisable. Eye protection is also highly recommended! Follow all warnings and safety precautions provided by the manufacturer of any melting equipment and casting molds. If for any reason you feel that you are unsure about your abilities in melting and casting your own precious metals or if you do not wish to purchase the expensive equipment it takes to produce your own bars/rounds, please stop what you are doing and contact me for a quote on the services I offer!

 

Edited to add: In all seriousness though, working with molten metals can be extremely dangerous. There are many risks associated with the process. If you are not experienced in any kind of metalworking, forging, welding, etc. I would recommend that you do not attempt to melt and cast your own precious metals at home until you have some training and basic knowledge in some form of metal working. Remember, Safety First!

 

Thanks!

[silvercoinsforyou]

I wonder if its worth it to buy the silver shot and have it taken to someone to make your own bars that way?

[RWB]

Metal bars from unknown suppliers are treated as raw by refiners. Do this for your own amusement

[CaptHenway]

Metal bars from unknown suppliers are treated as raw by refiners. Do this for your own amusement

 

And by coin shops. We bought them in at a discount and threw them in scrap melt lots since we could not, in good faith, resell them.

 

As to the high premiums, it's called THE LAW OF SUPPLY AND DEMAND!