Gold and Silver Price Drop

[modofantasma]

On 17/06/2021 at 15:57, Shep said:

Much like everything else, dealers prices go up like rockets and come down like a feathers.

 

One could design the website so that live pricing adjusts based on spot (like dealers do you see prices update every few seconds or minutes) it could also be designed to react slower to price drops but quicker to rises. 

Equally a dealers website could alter stock levels depending on price or maintain a certain minimum price eg a premium might increase if the gold price dropped so say a dealer paid 1300 for a coin and selling at 1365 (5% premium) then say spot drops to 1200 the coin could either be shown as unavailable or premium could increase to ensure dealer doesn't lose money. 

[Shep]

48 minutes ago, modofantasma said:

it could also be designed to react slower to price drops but quicker to rises. 

I would argue this is exactly what appears to be happening on many dealers sites.

Talking specifically about bullion products, when spot falls, prices do not seem to fall at the same rate as they rise and therefore the relative premiums over spot increase.

Either that or as you also alluded to, they seem to misplace their entire inventory of bullion immediately upon any large drop in spot and nothing is available for sale. I’m being cynical, perhaps it just sells extremely quickly, but it’s hard not to see it as a little bit of price manipulation by dealers.

 

[modofantasma]

I can understand a bit of protection to be built in incase of spikes down or flash crashes. I don't necessarily think it's wrong for them to choose their time of sale and whether to pull an item or not . I think that's better than letting one order then cancelling or saying look you bought a dip we want you to pay a bit more now the price has gone up a bit 😂

[HawkHybrid]

1 hour ago, Shep said:

I would argue this is exactly what appears to be happening on many dealers sites.

Talking specifically about bullion products, when spot falls, prices do not seem to fall at the same rate as they rise and therefore the relative premiums over spot increase.

Either that or as you also alluded to, they seem to misplace their entire inventory of bullion immediately upon any large drop in spot and nothing is available for sale. I’m being cynical, perhaps it just sells extremely quickly, but it’s hard not to see it as a little bit of price manipulation by dealers.

 

 

the logistics of the inventory model that they use means that it's easier for stock to

flow following a price rise.

 

HH