I have resumed my purchases of Silver after being idle for many years. I have made several purchases at what appeared be be "good deals" at the time, but the more I learn the more confused I become. Pricing starts with the Spot price. Then the dealers / sellers add a markup. What does the US Mint sell ASE to dealers for? What is the starting price in the food chain of buying and selling silver ASE? Is it Spot or Spot plus some markup? I have bought 2010 ASE unc. in lots of 5 and in tubes of 20. I'm trying to better understand what is a "fair" markup over the Spot price of Silver. On the internet I generally look at Kitco, Monex, Goldline, etc. These dealers have various minimum order requirements plus shipping and handling that can add more than $2/ ounce. The total cost over Spot appears to be around $2.60 - $3.50 per ounce including shipping and handling. My local coin dealer also offers ASE in the $2.50 - $2.75/ ounce. In order to have "fair" pricing it requires an "informed and knowledgable" buyer and seller. This is often not the case on eBay and therefore there are "opportunities" to to get a better "deal" Yesterday, the Spot price of Silver sharply increased. I bid on several tubes of 2010 unc. ASE on eBay, and won my auctions at $20.65/ ounce plus $0.25/ ounce shipping. This works out to less than $2 over the closing Spot price. I have two questions: A) what is a "fair" amount to pay over Spot for current year ASE? $2.50 - $2.75 or $2.00 B) When I go to sell ASE, should the Bid, selling price, be below Spot or below the Ask price (see A above) How much of a discount is reasonable on selling? I'm not planning on selling, just trying to come up with a way of pricing my silver coin inventory. Thanks for your assistance.
"fair" is not really a term you can put on pricing. You need to think more in the lines of average or median. From my experience, the average cost over spot fluctuates quite a bit depending on perceived availability and demand. Any price someone gives you today would mean little in a day or two. You yourself, stated that prices increased on you sharply. I would be slow and keep track of the fluctuations for a while before you get back in too heavily. As far as pricing your inventory, I price all my stuff at spot...because that is all it is worth in reality.(hence the price metric) I feel "Numismatic pricing" is a myth....until you actually find a buyer....with cash. Until then, it is worth what the metric says.
I think $2-$3 over spot is a reasonable price for the current year ASE. Of course, the more you buy the better you should do (i.e., monster box or roll). Try to aim for under $20 and/or wait for dips in silver spot. IMO, silver is undervalued so with that in mind, if you ever go to sell you should be able to at least sell at spot (and likely for a profit). However, the ASEs are very popular and will probably carry some sort of premium over spot when you go to sell. TC
I have a couple of thoughts on this topic. Please be aware that many others will disagree. I don't pay much attention to the spot price. Instead, I have a personal cut-off of $20 because I believe that in the long run the spot price of silver will exceed this amount by a substantial margin. So I'd rather pay $18 when the spot price is $15 than to pay $19 when the price is $19. The lower the better. Another thing to be aware of is that not all ASEs are created equal. If Dealer A is selling ASEs for $3 over spot, and Dealer B is selling the same date for $1.50 over spot, there is a very good chance that Dealer B will sell you a coin with a few more dings than Dealer A. If this doesn't bother you, buy what is cheapest. If you want a coin that might be MS69, it's going to cost a bit more. You get what you pay for [usually].
I posted a photo of some of the ASE I recently purchased on eBay under the "Air Tites" topic. I'm not able to grade the coins but they look good to me, no actually beautiful. I really think the ASE is a very attractive coin, and there is an exceptional amount of detail on the Mints die. Any idea what the MS grade might be of the two coins that you have full view of?
Things have changed since the 'swings' of '08. What I have done is garnered a relationship with two local dealers, which eliminated the shipping fees from EBay and online dealers. While I don’t receive the prices they receive through the dealers network, I have always had a better ‘return’ There are many philosophies out there... I used to follow the spot price as well but soon learned that DCA (dollar cost averaging) is the better route. I personally believe Ag is underpriced and as long as its spot price remains under 25USD, I will continue to DCA into the metal. When spot reaches the $25 mark I will reevaluate my position.
in the glory days of the bing rebates i was buying silver eagles for no more than .58 over spot. today was the first time that i bought eagles without the aid of bing. i snagged 240 '09 ASE's for 20.12 a pop. considering the mints premium is $1.50/coin i guess i did alright.
Thank you Green18 for the US Mint link. Ok so the Mint sells a Monster green box for Spot +$1.50, then both Monex and Ampex sell it for $1.92 or $0.42 over their cost, approx. 2%. I'm guessing that we should be able to SELL our Unc. Silver for no less than Spot +$1.50 (Mint's price to their dealers) because that is the lowest cost silver ASE in the market at any given time. Does anyone know what dealers are paying for Uncirculated ASE? I see the spread between the Bid and Ask of Spot Silver is only $0.02. My local coin dealer is offering 20+ ASE for Spot plus $2.50, which is only $1.00 over the Mints price. Seems fair to me. Recently there are numerous eBay auctions which have recently closed at "old spot prices", offering excellent buying opportunities. eBay purchases also offer eBay Bucks (2% credit on future Paypal purchases) plus Rewards points and dollars depending on the credit card used to pay PayPal. I use American Express on Paypal so I get 1% cash back plus the 2% EBay Bucks (3% total), plus I bought several items from the same dealer so I saved a substantial amount on the shipping and handling. Once the Spot price of Silver settles into a narrow trading range, I expect eBay pricing to more closely reflect Spot plus $2.50 -$3.50 per ounce depending on the quantity involved. The suggestion for dollar cost averaging makes a lot of sense in a rising market. Is there any time during the month that Silver typically trades at a low price vs the rest of the month? Thank you
Dave, the spot price of silver is per oz. for 1000 oz. bars. Any smaller units will most always carry a premium due to the cost of turning those 1000 oz. bars into the smaller units. I like junk silver coins priced at spot as they are already small units with known weights and purities. If you buy at a premium, you should be able sell at a premium in the marketplace. I used to buy a lot of miscellaneous junk silver off of eBay, and I've never paid over spot including shipping. Silver is silver is silver.
Jeff The reason that I don't buy "Junk Silver" is that I feel that average person will see "Junk Silver" as a face value coin rather than a Silver coin. I also feel that average people will understand that an ASE is a Silver coin ( it states "1 oz fine silver on the coin), so I buy ASE. I have some "Junk Silver" that I have rescued from circulation, but I realize that I need to find a knowledgable collector in order to realize the Junk Silver coins "value" . Therefore, I feel that the premium paid for ASE Silver is an insurance policy, that I will be able to sell it for it's Silver "value" in the future. I admit that there is no good reason for this feeling, except that I sleep better doing my accumulation of Silver via ASE.
@ the bold... those who follow the COMEX and charts may say yes. In my experience (although only a few years in) DCA in it's basic form simplifies the 'investment' process. Since 1964, the price of Ag in dimes and quarters (as of today) have risen 1376%. I won't get into the politics behind this increase over time but I believe the increase will continue and as stated when Ag hits $25/tr. oz. is when I will reassess.
not only that... ask dealers they're buy back price. Today's Ag bullion coins hold they're premiums better than 'junk silver'. If one has the funds... ASEs, CPL, Phils are the way to go. If one's budget does not allow for modern bullion, than junk silver is the next best thing.
I normally charge about $2 over melt on common ASE's but will lower this premium if the coin looks crappy. I don't think $3 is unreasonable as the CDN Wholesale ask price is $1.85 over melt. When offered this material I will usually offer 85-90% of melt. I am not a buyer of hardly anything these days unless I can immediately flip it for more money.
