Premium for ASE's

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#1 Tue, Apr 10, 2012 - 8:56am
theworldhaschanged
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Eastern Shore, MD
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Premium for ASE's

Why do ASE's command a premium of 8% and AGE's only 3%? What accounts for the huge difference?

Edited by: theworldhaschanged on Nov 8, 2014 - 5:08am
Tue, Apr 10, 2012 - 12:03pm
silverwood
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theworldhaschanged wrote: Why

theworldhaschanged wrote:

Why do ASE's command a premium of 8% and AGE's only 3%? What accounts for the huge difference?

​DEMAND!

Fri, Apr 13, 2012 - 9:52am (Reply to #2)
theworldhaschanged
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I thought about that, but is

I thought about that, but is it really demand? Demand is measured as a function of supply. And supply has been legislated by Congress to meet demand. The mints therefore buy and mint enough of both metals to satisfy this demand, thus how can demand be the culprit?

Fri, Apr 13, 2012 - 10:15am (Reply to #2)
tallydynasty
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Biggest difference is COST

Biggest thing to look at is dollar/cents COST per Coin(piece) of production/distribution/volume. - Not percentage. 

Sat, Apr 14, 2012 - 4:04pm
Patriot Family
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I would think it's  a

I would think it's a pricing game by the middlemen. They have to charge you that 8% premium over spot to ensure a profit over their average cost to buy and stock ASE's. I'm sure their models are fairly complex and have to take into account delivery interruptions and delays by their own suppliers, and perhaps inaccurate sales forecasts. My conversations with two suppliers revealed remarkably tight single digit profit margins - less than 5% on many products.

8% is probably the lowest I've seen on ASE's these days. My supplier is at 8.5%, but then when I add in wire transfer fees and shipping, it climbs quite a bit (I try to make larger orders for this reason) .

In the past I've seen 5.5% premium for ASEs - typically when sales are slow and they are trying to move product they bought at a lower price. That's been rare, though. I saw it as silver hit close to $50 and then started falling rapidly.

Anyway, their AGE volume is completely dwarfed by ASE volume. People seem to be willing to pay a higher premium for a more "affordable" product.

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