Just an observation about Paper vs. Physical Silver Price

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Wizard
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Just an observation about Paper vs. Physical Silver Price

I have noticed that there has been a definite difference between the spot price quoted and

what people are paying for physical. Even when the EE hit us with a flash crash in May.

You would be hard pressed to get an ounce of Silver on Ebay for under $40.00 an ounce

and usually closer to $50.00 and $55.00 an ounce.

I know Ebay is not the be all end all. But as a good indicator of prices being paid and cash changing hands

on the ground on a fairly regular basis. it does have its place as far as what people are willing to give at any given

moment for a number of things. With that in mind I just see a widening gap between the paper and physical markets.

Any thoughts, opinions observations on the subject would be greatly appreciated.

This is my first post here, I have been reading for a while now. And thought I would join the party.

It is refreshing to see a site with intelligent back and forth discussion about a subject without it disintegrating into a

political slug fest. Everyone here knows who the Idiots are regardless of political affiliation.

Turd, THANK YOU for putting together such a GREAT site.

Edited by admin on 11/08/2014 - 06:09
Dr Durden
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Welcome, Wizard. Ebay can be

Welcome, Wizard.

Ebay can be deceiving. During this recent run up from $34 the premiums seemed to have tacked spot pretty well - 15-18% on a 1 oz ASE. It's when we get a pull back of maybe 2-3% is where eBay will lag (ie implied physical doesn't come down as fast as spot). At least that's what I've noticed. You're better off going with an online dealer of local that tracks spot tightly during the BTFD's.

There's definitely no shortage of silver or gold bullion out there, though. I almost bought a 2011 Gold Eagle for spot after Bucks today.

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silverbleve
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ebay arbitage

I have mentioned flipping coins on ebay a few times here before, and I always get shouted down for blasphemy, but I agree with this as an idea. I could never bring myself to do it because I love my coins so much, but there are many opportunities to buy locally and sell on ebay. Heres an example, I like to buy 1996 Silver eagles at my local dealer because they are the lowest mintage.  He sells them to me for spot plus 5 bucks. Last week when silver was 35 I bought a few more as I always do. (I look for those every week) I go home and look them up on ebay and they are selling for over $50, I could "in theory" just sell them at a profit, then go back to the local dealer and buy more, slowly accumulating more coins. 

Also, there is a well documented losers syndrome with auction type sales, wait no its actually called "winners curse" yes thats it. It means in an auction scenario the winning bidder will almost always pay too much for the item. In our case too much being a hefty premium over spot. Check this out:

http://en.wikipedia.org/wiki/Winner's_curse

mdcromer
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ebay

The majority of auctions go for well over spot.  But I can consistently buy 90% at or below spot, and fractional gold just a bit over spot (1/10 oz krugs, maple leaves, 20 Francs and Mexican 10 Pesos offer good opportunities for this).  I never see good deals on Eagles or old American gold coins though.

donpaulo
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shill alert but seriously

shill alert

but seriously why are you using ebay when spotmex is better ?

mdcromer
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Shill? WTF

donpaulo wrote:

shill alert

but seriously why are you using ebay when spotmex is better ?

Let's see.  Spotmex has ZERO gold for sale right now and ZERO 90% for sale right now.  Since those are the two things I am interested in buying, I'd say it's pretty obvious why I am going to eBay and not spotmex.

BTW accusing someone of being a paid shill is extraordinarily rude.  Especially when you then use the rest of your post to flog a precious metals exchange site that doesn't even have any gold for sale.

Wizard
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I am sorry I did not make my

I am sorry I did not make my self clear. (Still Learning Forums) big difference between talking to someone and typing to get a thought across.

I do not usually by silver on e-bay I just use it to price various things C.B.'s and amplifiers, Car Parts, Motorcycle Stuff Numismatic Coins. Which I do purchase on e-bay. (Some good deals lately)

When It come to silver I have been lucky I have four coin shops within 10 miles of me. And I usually do not have to give more than $1.00 over spot for generic bars and rounds. A little more for Eagles. between 3 and 5 dollars over spot depending on supply

ScottJ
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Don't Forget What Side of the Team

Hey DonPaulo,

No need to call anyone shill's for offering different opinions of the same perspective.  Maybe use a better choice of words next time?

Anyways...

I look at this thread and I see everyone is on the same side... trying to talk about buying physical silver at the best prices/quality.  Working together can help create a more informed community, benefiting one another.

I have not personally bought off of ebay, but I remember reading in 08 when the price of paper silver crashed, ebay prices were 50$ an oz.  There was no physical silver available at those levels, as mining companies cannot profitable mine for it at such artificially low and downright disrespectful prices, and the bullion holders were not giving up their physical for depreciated fiat prices.

I personally think if at all possible a little of both ebay and bullion dealers can be a good thing.  If one is looking for a larger order, a company like tulving.com can be of use, as their low premiums are a product of low overhead.  If one is looking for bargains, scrap, unique coins, or even just to use the ebay client.... then there is worth in all.

The fact of the matter is we are on the same team.  Let's not make enemies amongst partners in quest for freedom from our monetary masters.

Dr Durden
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donpaulo wrote: shill

donpaulo wrote:

shill alert

but seriously why are you using ebay when spotmex is better ?

But seriously, you have a Spotmex link in your sig? That's classy, dude. 

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Wizard
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donpaulo "Shill Alert"

All is good where donpaulo's remark about "Shill Alert"  is concerned, I took it as humor when he first posted it.

We tend to have a very dry sense of humor here in our little world.

Wizard

pbreed
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tuvling has silver on sale.

If you can handle the huge minimums, it looks like tulving has a sale on silver:

Sealed ASE  Monster boxes at 2.79 over spot.

Random ASE's at  2.59 over spot.  Looks like they ended up with more silver than they needed after the May crash.

I've never purchased from Tulvling as the minimums are too high for  dollar cost averaging, but I use the site as a reference

on prices.

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