Backdrop: silver spot has went from $50-$150–$110cad in about 4 months. The amount of scrap silver
going to refineries has tripled. Refineries used to be a 10 -30 day payout. Now it is near 80 days.
This has quickly changed the public buy back rate. For sterling, a drop of at least 20% or more.
The biggest buyer in my province is paying 60% of spot on sterling at the moment. Others vary, but very significant drops.
So (again) I would recommend silver bullion .999 to be purchased in small denominations if you are buying for investment. The buy back rate is at around 95% of spot as it can go back on the market.
I understand many of you love and use your sterling items. Financial challenges can spring up and it may be an asset you might have to consider. I have a very large flatware set, I hardly use. I have decided to send it to refineries and switch the 20k into bullion. Silver bullion is highly sellable.
(Apparently silver is the second most used metal in industrial use)
I am sharing because this is my industry and what I do daily. I am also a scrap metal buyer. I encourage people to move out of fiat dollars and into real physical assets before inflation drains your dollars away.
I have another message to post about fiat dollars and silver stay tuned!
Susan
Canada
I would think the world situations would be similar. The more silver moves up and down, the larger they need to hedge it / the lower a payout by a buyer will be.
Interesting comments, Susan. But can you enlarge a little on why smelter payouts need to be delayed longer as daily spot rises?
As for the rest of us, those of us who buy and sell silver based on its history not its bullion value, the market really hasn’t changed very much except that smelters get to obliterate a small percentage of our product when people send good 17th and 18th century silver to the scrap yard.
Just yesterday I learned an acquaintance of mine, a widow needing a bit of cash, had decided to send her late husband’s important collection of West Country provincial silver to the smelter.
They were indeed offering her 60% of melt but that represented a tiny fraction of the historic value.
Luckily the bill she was looking to defray was tax and her accountant and I managed to persuade her to donate the entire collection to a local museum registered as a charity which gave her tax relief somewhere near three times the cash value she would have received for the silver destruction.
The large spread in percentages is a cushion to absorb any losses. For example. I purchased a lot of scrap silver in the mid of January for about $145 an oz. The lot is just now being settled and I am looking at a $110 spot price. I was paying a high payout price with very little cushion. This is new ground for everyone and people are just trying to adjust to stop from having a big loss. The big players are floating a million or 2 of dollars a month. Some stores have stopped buying scrap silver as they can’t wait for a 2-3 month recovery of their money.
This is new ground and businesses are doing their best to navigate this and stay in business.
From which I gather the cushion is being provided by the seller in exchange for a larger net return.
This might be feasible if the buyer is bondable and bonded. Otherwise I cannot see as a trader I would tolerate it.
If someone buys a house off me or land to build a house upon and says I’ll pay you more but I want you to postpose receipt of payment even though I get the deed of land right away I would refuse.
If I give him the deed he can hypothecate or mortgage it and use the money for something else other than building or repaying me.
Ditto with silver. Why would I surrender physical possession until I get paid cash on the barrelhead. How do I know he won’t go broke thirty seconds after I give him possession?
I buy gold and silver everyday. I pay when I get possession and ownership passes at that point. Not until and certainly not later.
Anyway I am grateful to you for the insight, but it’s a world where the smelters have all the power and the sellers zero. Wouldn’t suit me.
