physical silver Price

[Pipers]

physical Silver price delivered even the cheapest coins from Germany are really over priced compared to Gold why is this.  Please do not use the V.A.T answer because we can all get our silver from Germany or Estonia where V.A.T. is very low.

 

Gold can be bought for 3% above spot  (HGM various)

Gold                              3.5% above spot inc del   (Atkinsons 1oz OPM Bar)

Silver can be bought for 17% above spot (STG 2014 maple)

 

I cannot see any reason for the extra profit margin especially when we on here and elsewhere buy 20 - 30 at a time.  There is no incentive to buy anymore than that. For example a 1 oz gold coin would set me back around £805 today, now if the silver suppliers were to give a better discount at this price (the 1oz Gold coin price mark) then costumers may be tempted to buy more silver.

 

Your thoughts 

[HelpingHands]

Maybe there is a cost per coin to produce said coin no matter what metal it is made from.

 

So for example only:  If each coin costs £3 to manufacture the cost would bump the end price up to a greater percentage for low value coins versus high value coins.

[morezone]

Exactly what HH has said.

Spot on silver is around £12.3 at the moment.  At 3% that's 37p.  I don't think that'll cover all the overheads and costs involved in minting the coin and getting it distributed to dealers and for them to take a cut.

Gold at £767 is £23 at 3%.  That will cover the costs involved.

 

What you're saying is that you want to be able to buy silver coins for the same premium as gold coins at 3% yet it would require 62 silver coins to equal 1 gold coin.  We're talking 62 times more in costs for the same profit.  It's not possible.  Storage for silver is 124 times the volume than for gold as well.

 

On the larger weight coins the premium is also relatively high.  This is due to the lack of sales (or low fixed mintages) vs original minting costs.  Plus, again, transportation and distribution equal to 62 times the weight and 124 times the volume as a single gold coin.

[HawkHybrid]

a fairer comparison would be 1/10 oz gold which is priced ~£90

at atkinsons, that would give a premium of ~17% above spot.

 

1/10 oz gold at hgm can be bought cheaply at +3% but it is

second hand and sell out quickly.(half sovs. are a good deal

at 4% over spot)

 

Just buy junk silver, it's great fun, cheap and should not incur

cgt if they are old british circulating coins.

 

HH

[morezone]

Comparing 1/10 new gold against 1/10 secondary market gold is not a fair comparison. 

Neither is it a fair comparison against silver based on weight.

 

A fairer comparison would be the following from the same supplier

 

1/10 Silver Walking Liberty Round @£1.72 (40%)

1/10 Gold Canadian Maple @£89.63 (17%)

 

Again, silver is more expensive and will always be more expensive.

[ArthGoch]

Amongst other things the retail margin is inextricable linked to the refining margin and specifically to the associated fixed cost of goods that any type of refining would have to consider 

 

At a lower retail sales price, which silver is, the ability to absorb these fixed costs and to pass on the end refined product with a mark up as quoted above is not economically viable. To gain economies of scale in order to obtain the retail margins as quoted above ( 3%) would be exponentially unobtainable 

 

As the market drives any price higher, 'all things being equal,' the gross margin in percentage terms decreases, while in value terms it increases.

 

Theoretically if the ratio of gold to silver was broken and silver was trading at around $1,300/oz the 3% mark up theoretically would be achievable . Conversely for those that can remember when silver was at a spot price of $6-$8, bullion was far in excess of a 15%-20% spread in retail terms and in order to cover the breakeven point ( payment of fixed and variable costs)  that all refiners have to cover.

[ChrisSilver]

I believe the question has already been answered above. But I just wanted to add that silver even if bought without VAT in the EU still has had import VAT added to it when it entered the EU. This adds 7% on to the dealers source price if imported via this German preowned silver scheme.

So dealers prices also have to reflect this cost.

[Danny-boy]

Just to put another spin on things......

I think it is amazing, that with spot currently at £12.23-ish, that you can buy silver maples for £14.46 per coin delivered (on a 100 coin order).

I think that's amazing, bearing the following in mind:-

Shipping costs from Canada to EU

Shipping costs from EU to UK

How much it costs to mint the coins

How much it costs to package the coins from Canada

Import VAT into the EU

How much it costs to package the coins from the EU

The manufacturers profit

The dealers profit

And all of the above they do for £2.23 per coin.

In my book, that's a bloody good deal.

[CurryMuncher69]

SILVER IS BEING MINED AT MORE THEN SPOT!!!, You cannot have a commodity being sold for less that costs the company to mine it. 

Most silver comes from secondary sources I.e Gold, and copper Mining. Only a few silver mines remain, that is why at the moment silver has a High premuim on its coins compared to gold. 

When spot increases, the decrease of silver coin premiums  

For example when I started to stack back in February when spot was 13 quid an oz A PAMP SUISSE SILVER BAR WAS ONLY 22-24 quid per oz on Atkinson. When the price dropped to low 12, those same pamp bars increased to 27 quid per oz. 

 

[Danny-boy]

SILVER IS BEING MINED AT LESS THEN SPOT!!!, You cannot have a commodity being sold for less that costs the company to mine it.

Huh?

If silver is being mined at less than spot, surely that's the way it should be?

[craig12]

the only thing I worry about is the historical chart   over the long term years previously  spot was so so low  , today still seems high  im still a stacker that trys to offer spot to e bayers(silver fish tip) or on a make a best offer  I make an offer , if all else fails I try and buy for spot plus vat  in real terms, this means  in theory ive not paid any premium , ive met a fellow stacker who sometimes will sell some coins at a good price

apparently atkinsons  re priced everything  quite quickly overnight

[Danny-boy]

the only thing I worry about is the historical chart over the long term years previously spot was so so low , today still seems high

I think historically, both investor and industrial demand was far lower than it is nowadays.

I sincerely doubt we will ever see 90's prices again.

Don't forget £5 back then could buy you a lot of stuff, so is not the same as £5 today. You have to take price inflation into account.

[morezone]

Craig.  You say to looked at the historical charts blah blah.

Have you looked at the sales and consumption charts?

 

As Danny has pointed out, the demand for silver has increased since the 90s.  China consumes massive amounts.  All growing third world countries are consuming more and more.  The electronic age has increased demand.

 

Investment demand has increased.  Look at the Perth Mint charts (easily accessible).  You probably heard about the Kook re-mints because they didn't even sell out the first time.  Now look at today's charts and you'll see they all sell out at their maximum mintage.  Check out the mintages of early Pandas.  100k, 200k, 600k and now 8 million.  Eagles 5 million, then 10 million now 40 million.

 

Price of silver is going to be higher than inflation because demand is substantially more than previous years.

 

Will we see massive price increases?  This is a possibility as we have seen in recentl years.

 

Will see see massive price decreases?  Very much doubt it.  A little is possible but we're not too far off the mining costs as it is.  I forget the figure but I think $18 has been thrown around.

 

Another thing to consider is the $ to £ as this has an affect on what we see as the price.

[Carpe Diem]

Huh?

If silver is being mined at less than spot, surely that's the way it should be?

 

Only just though.  In the first quarter 2013 the break even for the top 12 mining companies was $26.45/oz, and for the first quarter of this year was $19.78.

 

The top 12 miners had an average realised silver price of $20.31 meaning miners made $0.53/oz profit this year.

 

Production costs have been increasing, which is related to falling ore grades, meaning companies have to mill more ore to produce more silver.  The lower spot means that companies are also looking to mine more in order to lower overall cost/oz and increase revenues.  

[CurryMuncher69]

What I really meant to say it costs the company more then the current spot price to mine silver. 

In one of silverfish VT videos couple of months ago, he explains numerous amounts of companies (cannot remember which ones but when I find the video I will link it) where complaining of Price manipulation in the PM market especially Silver due to high cost of mining and production cost. That is why Stocks for mining companies is a big no no investment. 4

[morezone]

What I really meant to say it costs the company more then the current spot price to mine silver.

Wouldn't that mean they're running at a loss. In which case, they can only remain operational for as long as their cash reserves allow them to.

[Danny-boy]

That is why Stocks for mining companies is a big no no investment.

The stocks will rise when spot rises and they will make more money.

I'm sure 99% of us stackers / collectors are hedging their bets that spot will rise, so mining stocks should fall into the same category.

[HighlandTiger]

In one of silverfish VT videos couple of months ago, he explains numerous amounts of companies (cannot remember which ones but when I find the video I will link it) where complaining of Price manipulation in the PM market especially Silver due to high cost of mining and production cost. That is why Stocks for mining companies is a big no no investment. 4

 

I wouldn't hold any stock (excuse the pun) in what an amateur youtube videographer, who has only been into collecting Silver for a relatively short time, has to say on financial matters.

 

It seems his popularity holds no bounds as people seem to hang on his every word. 

 

There is an apt saying from the Horse racing circles. If you hear of someone with a dead cert or a sure thing or inside knowledge, then keep away from it. Anyone with a true insider bet, will tell no-one until they have placed their own wager. By making things public it will alter the price.

 

None of these youtube "experts" really know what they are talking about. If they did, they'd keep quiet, do their deals and become multi millionaires. The fact that they are not, says its all  

[Danny-boy]

None of these youtube "experts" really know what they are talking about. If they did, they'd keep quiet, do their deals and become multi millionaires. The fact that they are not, says its all

I couldn't agree more.

If people were so good at predicting things like silver / gold prices and stocks, they wouldn't have time to make videos (nor the inspiration).

They would be wiping their arses with £50 notes, or having a fit bird do it for them.

[Pipers]

Right so what you guys are saying is,

 

the mints want a minimum price for minting a coin,  For example £2.  

There is a 7% V.A.T import  charge to the EU minimum.

 

Well that settles that question.

[Pipers]

What I really meant to say it costs the company more then the current spot price to mine silver. 

In one of silverfish VT videos couple of months ago, he explains numerous amounts of companies (cannot remember which ones but when I find the video I will link it) where complaining of Price manipulation in the PM market especially Silver due to high cost of mining and production cost. That is why Stocks for mining companies is a big no no investment. 4

 

CM be very careful what you read/watch and believe very little unless you can verify it.  I tried for months to find the so called all in costs of mines (there are charts all over the web with different figures on) with little success.  The nearest I got was it was linked to the price of oil, track the charts back if you want. In late 2008 when Silver last fell really low below $10, mines were moth balled or closed.  Running costs have gone up since then oil esp, mining is fuel intensive.  

 

IMO and it is only a opinion for mines to close and be moth balled like they were in 2008-2009 the price of silver would have to be $15 (this is more than a 50% increase in price).  More and more Gold and now Silver is being sold straight to buyers with a price already settled on especially the mines outside the USA.  

[craig12]

im going to change my mind on this , not the physical silver price , as ive no idea what costs are involved in mining ,  but in relation to a coin , when you can get a phil, , maple  for the £15  delivered  with the vat,  it might sound a good buy  after all .. , maples for some reason domt seem too heavy in the hand  but the phils  and ase,s  what else would you do with £15  yep  silver phils and  ase.s  aren't that bad value