Quoted from TigerLaw:
Wow! They just opened up again and it is $41 for a one ounce silver Eagle. That said, the spot price is $28.11 so it makes absolutely no sense for the mint fee to be $11 a coin, but that is what they are asking. I’d love to see silver go on a crazy run.
Eagles always have a higher premium on them than something like silver rounds or bars.
Going into this new situations premiums were already up as there’s been a run on physical for most of 2020 due to the pandemic and people fearing inflation.
My business is almost entirely rare numismatic coins and I do very little bullion.
That said, most of the guys I know that run shops have been putting larger than normal premiums on bullion for the last 12 months simply because of the demand.
This is going to be an interesting week to watch the metals. Going into this, there was already a pretty big run on physical metal where it had much larger premiums (if you could deliver) than paper or futures.
There was already a big growing disparity.
Call me skeptical, but I still don’t think they can inject enough capital into the metals market to really move it. Might they get it to $50 an ounce? Yeah maybe.
I would be shocked if they get it to triple or quadruple. There’s an awful lot of physical silver in the world and it would take a ton of funds to move it big.
A couple things to keep in mind about the mining industry. Mines have a fixed cost per ounce in pulling metal out of the ground and refining it. If the price gets too cheap where it’s not economically feasible, they simply stop production. If the price increases, the ramp up production.
The only issue would be the rate the refineries can refine the metal. With ramped up production, you might get a bottleneck in refining like there was in the 80s with the Hunt brothers run up. This would have to go for a while for that to happen.
Retailers have already raised their prices in anticipation of the run up and will continue to do so to stay ahead of the curve.
People with large position are going to hold and see what happens. The smart money will do this and when the gold to silver ratio gets too far out of wack they will dump their silver and put in in gold or whichever other precious metal they think is undervalued by ratio to silver.
Anyhow, not my market but closely related to what I do. I’m happy to see the metals move one way or the other because some of that money will be channeled into the collectible coin market. When the market goes up or the market goes down is when you get people buying and selling. You want the market moving one way or the other so transactions are happening. When the metals are stagnate is what I don’t like to see.