Just $2 over spot: Why Is That?

[yragcom1]

Hi All, First Time Reader Poster,

I'm learning about silver investing, and I took a trip down to the coin shop yesterday, asked some questions, almost bought a Australian coin that was $3 over spot, but I didn't. I figured I needed to get more research in.

Anyway I have a question about coins: I saw this Mexican coin on Apmex that was only $2 over spot:

Why would one silver coin be only so much over spot, while another is higher? Is it the silver content? The trust content of the particular nation in regards to currency? Is this coin a good buy at this spot rate?

Mexico (Onza - Balance Scale Type) 1 oz. Silver Coins (http://www.apmex.com/Product/9558/Mexico_Onza___Balance_Scale_Type_1_oz_Silver_Coins _.aspx)

[bemac]

Simple supply and demand. They can get higher premiums on ASE's, but can't for those Onza's. May just be they are overstocked on them.

[yragcom1]

So, if I understand your answer, it's just because there are more Onza's available. Follow up question: Why would I care about that, if I wanted to sell them later? Isn't a ounce of silver a ounce of silver, regardless of origin? I'm just buying for investment purposes, not collecting.

[MISRy]

Also consider the visual appeal of the coin, that's what sells at the shows, Craig's list or whatever. The Aussie coin might have been a Kook or a Lunar or something like that whereas an onza is just an onza. I get onzas locally at $.50 over spot but have to pay $3 for Kooks, Britannia's, Yuans, etc.. They are all 31.1g of .999 Ag, the form is the difference.

As you might guess while I do have *some* pretty silver let's just say the number of silver coins I have in airtights, (keepers `cause I'll never make money on them), is less than 1% of the silver at the bottom of my lake.

[earplugs]

Isn't a ounce of silver a ounce of silver, regardless of origin?

That is a common quote when someone is trying to buy from you. When someone is selling to you, you'll frequently hear "supply and demand". :cry1:

[phideaux]

Welcome Vrag. :hello:

It's kinda, sorta, somewhat a "free market". There is no universal pricing mechanism. Bargains are out there. Maybe dealer #1 needs to raise some money ASAP to pay his rent, or he has been sitting on a particular coin for a long time. Or maybe he thinks if he gives you a good deal on one coin, you'll come back next week with $10,000 and "back up your truck."

Whatever the situation may be... your job, as a card-carrying hard money advocate, is to quietly scoop up any bargains that you find.

[TheBigWookie]

Don't forget to include the shipping charges.

[hoarder]

Why pay over spot? Are you investing in silver or pretty numismatics?

Just put an ad in craigslist and buy pre-1965 US coins at $2 below spot.

[Dude]

So, if I understand your answer, it's just because there are more Onza's available. Follow up question: Why would I care about that, if I wanted to sell them later? Isn't a ounce of silver a ounce of silver, regardless of origin? I'm just buying for investment purposes, not collecting.

There is a pretty consistant premium for each type of silver product, when compared against each other. ASE's are high. People like the US mint and .999 silver. Mexico with .925, not as much of a premium. People love Pandas and pay more, in general. Greasy 90%, not as much. I personally look for BU and proof bargains. I don't own a single .999 piece.

[yragcom1]

Why pay over spot? Are you investing in silver or pretty numismatics?

Just put an ad in craigslist and buy pre-1965 US coins at $2 below spot.

That sounds like a plan...but it also sounds kinda dangerous.

[hoarder]

That sounds like a plan...but it also sounds kinda dangerous.New York or Los Angeles maybe. Not if you live in the Bible belt. Use common sense. Talk to them on the phone to see if they're actually a silver investor or someone anxious for their daily dose of meth.

[GoldWampum]

Sometimes...

6853

[HistoryStudent]

After you have what you should have, that is, 30 to 50% of all your total NET WORTH portfolio in precious metals then you will understand.

Even at the prices right now they still are cheap compared to the dollar which has been severely deflated over the last 40 years.

"We're a fiat nation now!" Nixon "the I'm not a crook :bandit: like the rest of them" President. Yeah, right he said that! :haha::haha::haha:

[HistoryStudent]

Sometimes...

6853


Your signature line reminds me of:

Like the last line in the MOVIE "The Last of the Mohicans"

quote: "we were here once." endquote.

A movie about true freedoms you will never see again. Learn about PROTECTION too and what the GOVY does....

http://www.youtube.com/watch?v=7tiKM4fxY1U

http://www.youtube.com/watch?v=IwgmTo49LQw (we were here once)

[curmudgeonista]

Some "bullion" coins are more desirable than others. Some reach "collectible" status. This may be based on "rarity", but mostly is just a matter of desirability. Not only are there differences in what you'll pay, but at present there are differences in what you'll get when selling.

Mexican Onzas (ounces) in the balance scale design are .925 fineness (though contain a full ounce of silver). They really don't get a lot of respect in today's market. The Libertads that replaced them are .999, have much prettier designs (two types) and command higher premiums. I've seen Libertads go for more than Silver American Eagles, and I've seen them go for less.

Gov't bullion typically sells for more than generic. Silver American Eagles are perhaps the most commonly held silver in the US. On the whole, they are not rare but usually command a higher premium than Canadian Maples and Austrian Philharmonics. Partially this is a trust issue. Maples may be more trusted than some generic issue of unknown origin and accordingly sell for more. But Eagles carry a bonus in the U.S. that others don't. That is, they are protected by strenuous counterfeiting laws where other fakes are not.

UK Britannias, Chinese Pandas, and Australian Kookaburras, Kangaroos, Koalas and Lunars typically go for more. Sometimes much more. In fact, high enough that you usually see them at net price according to the individual year and seldom advertised at a specific premium over spot (such as saying an SAE goes for spot + $3). Here it's not a matter of trust, so much as limited mintages and annual design changes that create collector's interest. While these are ostensibly "bullion", they can often sell for much higher prices.

Generic tends to compete based on how low the premium is, but doesn't usually yield as much as gov't issues when you sell. There are exceptions like Engelhard bars and rounds, as well as some older poured loaves.

[GoldWampum]

Your signature line reminds me of:

Like the last line in the MOVIE "The Last of the Mohicans"

quote: "we were here once." endquote.

A movie about true freedoms you will never see again. Learn about PROTECTION too and what the GOVY does....

http://www.youtube.com/watch?v=7tiKM4fxY1U

http://www.youtube.com/watch?v=IwgmTo49LQw (we were here once)

It's from a song HS. Not from the movie, but...

Last of the Mohicans... great movie, with a nice musical score itself.

[newmisty]

Great answer!


Some "bullion" coins are more desirable than others. Some reach "collectible" status. This may be based on "rarity", but mostly is just a matter of desirability. Not only are there differences in what you'll pay, but at present there are differences in what you'll get when selling.

Mexican Onzas (ounces) in the balance scale design are .925 fineness (though contain a full ounce of silver). They really don't get a lot of respect in today's market. The Libertads that replaced them are .999, have much prettier designs (two types) and command higher premiums. I've seen Libertads go for more than Silver American Eagles, and I've seen them go for less.

Gov't bullion typically sells for more than generic. Silver American Eagles are perhaps the most commonly held silver in the US. On the whole, they are not rare but usually command a higher premium than Canadian Maples and Austrian Philharmonics. Partially this is a trust issue. Maples may be more trusted than some generic issue of unknown origin and accordingly sell for more. But Eagles carry a bonus in the U.S. that others don't. That is, they are protected by strenuous counterfeiting laws where other fakes are not.

UK Britannias, Chinese Pandas, and Australian Kookaburras, Kangaroos, Koalas and Lunars typically go for more. Sometimes much more. In fact, high enough that you usually see them at net price according to the individual year and seldom advertised at a specific premium over spot (such as saying an SAE goes for spot + $3). Here it's not a matter of trust, so much as limited mintages and annual design changes that create collector's interest. While these are ostensibly "bullion", they can often sell for much higher prices.

Generic tends to compete based on how low the premium is, but doesn't usually yield as much as gov't issues when you sell. There are exceptions like Engelhard bars and rounds, as well as some older poured loaves.