silver weirdness

[wabnoles]

I am sure this might have been covered at some point in the previous posts but I am curious about this. Two things have struck me odd about the price of silver and the price of silver coins. For one thing, the price took a sharp dip earlier this week and I read something about Goldman Sachs being behind this. I know it dropped below $23/ounce and is now up to around $23.90. Does anyone have an idea what was driving this?

 

Also, when I first started buying coins (I usually invest a small amount of around $10/mo. in junk silver) I knew the price of the coins strongly correlated to the melt value of such coins. The dealer would look at the price per ounce of silver closing the previous day and price the coins accordingly. However I noticed that while the price of coins went up with the price, they never dropped and now with the price of silver down over $10/ounce, you'd still be hard pressed to find an American dime for under $2.50 or $3 USD even in wrecked condition and silver dollars still hover over $30 despite having almost ten grams less than a full ounce of silver, which sells for a little under $24/ounce. Also, dealers now seem to be looking at printouts that tell them what to price their coins when you almost never saw that a year or two ago. I know its all about supply and demdn but it just seems to me that there's some serious price fixing going on. Anyone know what these dealers are looking at when they print out these silver coin price sheets?

[jlueke]

When the price is going down any inventory that is sold at the lower price is likely going to be a loss so it makes sense for dealers to resist lowering prices as quickly as they raise them. Sooner or later new supply that was bought at the lower price should come up for sale and if there's legitimate competition those prices should be in line with spot silver. I think the larger the dealer the more likely it is that you'll get a spot + price.

[Circus]

I can vouch for the simiple fact that the scrap dealers, are just as slow to rise the price they pay for all classes of scrap. When the price goes up becuase of demand, they when the price drops for say shred steel light. They will drop the pay out price in a heart beat.

As with a lot of things dealers that have higher fixed costs, will tend to hold the current prices they have. They do start to redajust the prices when the coplaints or questions become numerous.

 

It is the age old battle between the shop keeper and the purchaser! Shop keeper would like highest profit margin, while the buyer would like the lowest prce for the goods.

[Scottishmoney]

Nobody ever wants to sell at a loss so you hold on to what you have in the hopes of a return to the old prices. Either you buy more at a lower price to offset the loss, or you just bite the bullet and eat the loss. Eventually stuff that sits awhile is a cost by itself and must be moved to increase cash flow.

[FindingSilver]

Answer to first Q: The reason it is going down is that the demand for silver is going down. This is because people who bought silver when the dollar was weaker are selling that because of the dollars slow rise in value. When people are not confident in the dollar they buy precious medals which they believe have a steadier value so when the confidence is regained they go back to the dollar.

[wabnoles]

Well I think that explains part of the price drop, that a stronger dollar is holding a higher relative value to silver, but it still leaves you sratching your head because silver (as well as gold) as far as I know is flying off the shelves. I think there is market manipulation going on its just a question as to whether the price fixing is the drop in price or the steady rise in price since the late 1990s.

[FindingSilver]

You do have a good point, I guess Im going to have to research some more.

[FindingSilver]

I have found out that Russia has recently purchased a large amount of over 25 tons of silver, this may have something to do with it. However, there is clearly some manipulation in the market. I speculate that this drop is going to be pretty minor and not amount to much.

 

Here's an article: http://moneymorning.com/2012/04/06/the-who-how-and-why-behind-silver-price-manipulation/

[Art1.2]

Silver in small bars and coins is a bit hard to find around here right now. Prices haven't fallen to match the markets and many of the usual dealers are holding the prices on the small amounts they have in stock. One fellow who owns a few pawn shops told me folks are bringing in jewelry but silver had declined to a trickle.

[wabnoles]

Well the massive buy up of silver by Russia and the relative scarcity of small silver should point to higher prices, not lower. That's why everything just seems so weird to me.

[just carl]

1. The usage of Silver has dropped due to the Lone Ranger no longer in buisness so Silver Bullets are not required as much now.

2. It has been found that Werewolfs may not actually exist and as everyone knows, only a Silver Bullet can kill one. No Werewolves, no need for Silver Bullets.

3. Many, many dentists are getting away from using Silver for fillings in your mouth. So many other products are safer, harder, cleaner to use and prevent grave robbers from digging you up later.

4. More women today prefer Gold items rather than that cheap Silver stuff.

5. Not sure where your at but any changes in Silver prices appear to have no effect on the prices of coins by me. I go to about 2 to 4 coin shows a Month. I see no changes in coin prices due to changes in metals of any kind.

[robtgossard]

As for now I haven’t come across any article or video that clearly tells what’s going on in the silver market. Since the economic fundamentals don’t support the sharp fall in silver prices, my guess is that there is some serious manipulation going on in the silver market.

[wabnoles]

I concur... I guess from what I'm gathering this manipulation is occurring in paper and electronic silver holdings and that the way to go is to just "keep on truckin" and get ahold of physical silver.