The TRUTH on Gold and Silver Spot Price and Premiums
Summary
TLDR本视频由Gold Silver Pros的Rob Kings主讲,深入探讨了金银现货价格与市场供需动态之间的关系。他指出,现货价格并不能完全反映零售市场的供需情况,而零售溢价则受多种因素影响,包括工业和零售需求、市场流动性及地区差异等。此外,他还讨论了金银市场的季节性波动、零售商和批发商面临的挑战,以及消费者如何根据市场变化做出明智的购买决策。视频内容丰富,为金银投资者提供了宝贵的市场洞察。
Takeaways
- 📈 现货价格是黄金和白银衍生品价格的广泛引用但被误解的指标,与实际的物理交易关系不大。
- 🌐 现货价格主要反映的是纸张合同交易,而非实际的物理交易,尤其是在美国和英国的市场中。
- 💡 零售溢价是根据市场对产品相对于现货价格的估值而变化的,它与现货价格脱节,更多地受到供需关系的影响。
- 🔄 供需关系不仅影响零售溢价,也影响整个供应链,从矿工到经销商。
- 📊 零售市场需求的波动性很大,这导致了溢价的不可预测性和价格的波动。
- 🏭 工业需求和零售需求对现货价格影响不大,因为现货价格并不反映这两种市场的实际供需情况。
- 🔄 零售溢价的变化受到多种因素的影响,包括供应链中的成本、仓储、分销、保险、租金、公用事业、行政管理、合规性、广告等。
- 📈 现货价格的波动对零售溢价有直接影响,价格上涨可能导致溢价下降,反之亦然。
- 🏦 零售商和批发商通过销售高溢价产品来提高利润,尤其在市场低迷时期。
- 🚀 未来市场的趋势可能会看到零售客户向高溢价产品转移,以及批发商和零售商之间的进一步整合。
- 🛒 零售买家需要对价格和产品有深入的了解,并明智地选择零售商,以确保他们能够获得最佳的价格和产品选择。
Q & A
什么是现货价格?
-现货价格是广泛引用但被误解的黄金和白银现货价格。它是通过美国COMEX交易所和英国LBMA市场的价格交叉得出的,由在这两个市场交易的银行收集信息,并通过电子接口分发给经销商、批发商和网站等。
现货价格真的代表了黄金和白银的实物交易价格吗?
-不是的。现货价格并不反映大多数实际的物理交易,无论是在工业市场还是零售黄金和白银市场。现货价格主要反映的是纸质合同交易,而这些纸质合同交易并不涉及任何实物成分。
为什么不同经销商的黄金和白银产品价格会有所不同?
-不同经销商的价格差异主要是由于每个地区的供需状况不同,以及他们所面临的成本结构(如仓储、分销、保险、租金、公用事业、行政管理、合规、广告等)不同。此外,每个经销商的利润边际也会影响他们设定的价格。
零售溢价是什么,它包括哪些因素?
-零售溢价是指消费者在购买黄金和白银产品时支付的价格高于或低于现货价格的部分。它受多种因素影响,包括零售需求、产品供应、批发商和零售商的成本(如仓储、分销、保险等)以及利润边际。
为什么在牛市期间,黄金和白银的零售溢价会上涨?
-在牛市期间,由于市场对黄金和白银的需求增加,供应可能跟不上需求的增长,导致溢价上涨。此外,价格上涨也会增加经销商的利润边际,使他们有能力提高溢价。
为什么说黄金和白银市场是一个低利润行业?
-黄金和白银市场是一个低利润行业,因为大部分时间里,批发商、经销商、矿商和精炼商的利润边际非常低。只有在市场需求和价格大幅上涨时,他们才能获得较好的利润。此外,这个行业的供应链非常复杂,涉及多个环节的成本,这也限制了利润空间。
什么是PTO原则?
-PTO原则,即帕累托原则,是指在许多情况下,大约20%的努力会产生80%的收益或效益。在黄金和白银市场中,这意味着批发商和经销商可能只在20%的时间里赚取良好的利润,而在其余80%的时间里,他们可能只是在努力维持生计。
为什么说零售买家必须教育自己关于定价和产品?
-零售买家必须教育自己关于定价和产品,因为在黄金和白银市场中,买家的购买模式是决定未来市场价格趋势和价格的关键因素之一。了解市场动态和产品特性可以帮助买家做出更明智的购买决策,避免支付过高的溢价或购买不适合自己的产品。
为什么说在黄金和白银市场中,供应变化比需求变化慢?
-在黄金和白银市场中,供应变化比需求变化慢,因为供应链涉及多个环节,从采矿、精炼到批发和零售,每个环节都需要时间来响应市场变化。例如,矿山增加产量或精炼厂扩大产能都需要时间和大量投资。而需求变化通常较快,可能受到经济波动、市场情绪或政策变化的影响。
为什么说零售买家的选择对市场有重要影响?
-零售买家的选择对市场有重要影响,因为他们的购买行为直接影响市场的供需平衡。如果大量买家倾向于购买某一类产品,这可能会导致这类产品的溢价上涨。此外,买家选择不同的零售商也会影响市场的竞争格局和价格设定。
Outlines
📢 介绍与现货价格的误解
本段落介绍了演讲者Rob Kings以及Gold Silver Pros的背景信息,并提出了现货价格这一主题。演讲者指出,尽管现货价格被广泛引用,但普遍存在误解。他强调,现货价格并不能准确反映黄金和白银实物交易的真实情况,而是基于大量数据和分析得出的理论值。演讲者意图通过本次演讲,揭示现货价格的真相,并解释价格波动背后的原因。
🌐 现货价格的全球差异
这一段讨论了现货价格在全球范围内的差异性。演讲者指出,尽管美国和英国的市场系统相似,但两国之间的现货价格存在差异。这种差异性证明了现货价格并不是一个全球统一的指标。此外,演讲者还提到了期货市场和现货市场的区别,以及它们如何影响价格的形成。
🏭 现货价格与实体交易的脱节
在这一段中,演讲者深入探讨了现货价格与实体交易之间的脱节。他指出,现货价格主要反映的是纸质合同交易,而非实际的物理交易。在美国和英国的市场中,大部分交易并不涉及实物黄金或白银的交割。因此,现货价格并不能准确反映黄金和白银的实体供需情况。
📈 现货价格的构成与误区
演讲者在这一段中继续解释现货价格的构成,并指出了一些常见的误区。他强调,现货价格并不反映实际的物理市场,而是基于期货和期权市场的交易活动。此外,现货价格的波动与零售需求的关系并不大,因为这些价格变动是基于对未来市场走势的预测,而非基于当前的物理交易。
💰 零售溢价的决定因素
本段落讨论了零售溢价的计算方式及其影响因素。零售溢价是消费者在购买黄金和白银产品时支付的高于现货价格的费用。演讲者指出,溢价受到多种成本因素的影响,包括仓储、分销、保险、租金、公用事业、行政管理、合规、广告等。此外,溢价还受到供需关系的影响,特别是零售需求对溢价有显著影响。
📊 零售溢价的市场动态
在这一段中,演讲者通过数据展示了零售溢价的市场动态。他指出,在牛市期间,溢价可能会上升,但在其他时候,溢价通常较低。零售商和批发商在大部分时间里要么处于亏损状态,要么只能维持生存,只有在市场繁荣时期才能获得较好的利润。这种现象导致了市场的周期性波动,包括零售商和批发商的破产和行业整合。
⚖️ 现货价格与零售溢价的脱节
演讲者在这一段中强调了现货价格与零售溢价之间的脱节。他指出,现货价格的变动并不直接影响最终零售需求,因为现货价格是基于期货市场的交易,而零售溢价则与实际的物理交易有关。零售溢价的波动反映了市场对特定产品的估值,而这一估值并不包含在现货价格中。
🔄 零售市场的供需关系
本段落讨论了零售市场的供需关系及其对价格的影响。演讲者指出,零售市场的供需关系是复杂的,受到多种因素的影响,包括消费者的购买行为、产品的供应情况以及市场的地域性特点。他还提到,零售商和批发商必须维持一定的利润率才能保持业务运营,而这通常通过调整零售溢价来实现。
🏦 行业未来的趋势与挑战
在这最后一段中,演讲者对黄金和白银行业的未来趋势和挑战进行了展望。他提到,行业的未来取决于未来五到十年的市场教育和理解。如果消费者对溢价和现货价格有更深入的理解,零售市场将更加稳健。他还警告说,如果市场继续经历困难时期,可能会导致更多的破产和行业整合,从而减少市场的竞争和选择。
Mindmap
Keywords
💡现货价格
💡溢价
💡供应和需求
💡纸面交易
💡市场局部化
💡工业市场
💡零售市场
💡市场整合
💡市场预测
💡供需失衡
Highlights
介绍了黄金和白银现货价格的概念及其在零售市场中的实际意义。
分析了现货价格与黄金和白银实物交易之间的关系,指出现货价格并不反映大多数实际物理交易。
讨论了美国和英国市场之间现货价格的差异,以及这些差异如何影响全球定价。
强调了零售溢价的概念,以及它们是如何受到供求、生产成本和市场动态等多种因素的影响。
通过实例说明了在牛市期间,零售溢价如何变化,并讨论了这对投资者意味着什么。
探讨了零售市场和工业市场之间的供应链差异,以及这些差异如何导致价格变化。
指出了零售溢价与现货价格的独立性,并讨论了为什么零售需求对价格有重大影响。
讨论了零售商和批发商如何通过控制产品供应来影响溢价和价格。
分析了市场整合对零售买家的影响,包括产品选择和价格设定。
强调了教育对零售买家在理解和导航黄金和白银市场的重要性。
预测了未来市场趋势,包括零售客户向高溢价产品的转移以及市场整合的潜在后果。
讨论了现货价格的历史背景,以及它如何成为市场过时的遗留物。
总结了现货价格与零售供求动态的脱节,以及溢价如何尝试使市场达到供需平衡。
Transcripts
welcome to gold silver
Pros hi everybody this is Rob Kings with
gold silver pros at www.gold Silver
pros.com and it is Thursday April 4th
2024 and a long awaited and as promised
uh presentation on spot price that I
promise that I would give last week I've
been working on this for a while lots of
data in here lots of analysis about spot
price but the whole point of this
presentation today is to walk you
through what the spot price for gold and
silver bullion is and what the spot
price for gold and silver bullion is not
uh some likely outcomes as a result of
This research as well as uh maybe some
collusions about where we're going to go
and some caveats for you as you
participate in the market and what you
want to look for you have to be very
careful uh when buying your products
buying and selling your products in the
market as to what other people going to
pay what other people going to charge
and I'm going to prove to you that
despite the fact that we have a national
spot price that largely an addition spot
price the premiums that you buy and sell
at are locally determined and not
necessarily nationally determined and I
we're basically going to prove that as
much as humanly possible with data one
of the reasons I wanted to do this
presentation is there seems to be a lot
of misconceptions about how prices go
for gold and silver why they rise why
they fall when they rise when they fall
why products are priced differently why
you can go to different dealers both
online locally and get different
premiums on things and different rates
on different things there are all reason
reasons for that so it's basically to
educate on what we believe to be the
truth based on available data versus
debunking some common myth about how
prices are actually determined and as
I've become a dealer and been closer to
the ground and closer to the public on
this part of the conversation uh both um
positively on on how people are are
approaching the market and also
negatively on how on things that people
think they're true that aren't true um
you know I wanted to to do this
presentation to kind of explain how it
all really works so this is the truth on
spot pricing in premiums in the gold and
silver market given orange the markets
and the best data that we have available
one caveat we don't have all the data
and that's one of the points I'm going
to use to prove to you that spot price
means Buck kiss with regards to actual
supply and demand especially locally uh
but we do have some data for you on that
and we're going to go through it so
without further Ado let's jump into the
presentation this presentation is called
spot pricing and the bullion Market by
gold silver pros and let's jump right
into it so essentially what is spot
really well it's believed to be and is
the widely quoted but wholly
misunderstood price for gold and silver
bullion what's gold spot price today
well at the time that I'm doing this
video as I look on kito's app gold is at
22950 and silver is at 2692 and that's
of about 1:30 p.m. central Time on
Thursday April 4th 2024 but is that
really the price of gold and silver and
this spot really should spot be the
center of the universe when it comes to
gold and silver dealing in the retail
Market or even in the industrial Market
well I've got issues with that but let's
get into the presentation you'll see the
spot price everywhere it's quoted
everywhere but do you know what really
goes into it do you really really know
well this presentation is aimed at
educating you on that because from
speaking with you guys all the time via
email social media in the store at
conferences out you know in the wild
when I get recognized and people want to
engage me in these sometimes hourlong
conversations you guys really don't know
what goes into the spot price or what
even goes into the premiums above or
below spot we're going to try attempt to
um educate you on that and sort of make
that a little bit more clear for you for
those of you that don't know do you know
how it affects the pricing actual
fysical gold and silver we discuss all
those things in this presentation if you
believe the conventional wisdom spot
price is the intersection of pricing for
both gold and silver across the American
comx exchange and the UK lbma markets
this information is collected by the
banks that trade in both markets and
distributed to dealers and wholesalers
and website and everybody via electronic
interface it's all electronic now uses
application programming interfaces for
the most part or you can just download
an app and Eyeball it if you you're on
the retail end and you just want to know
what it is at a point in time but for
everybody buying and selling in the
market we all got to grab it
electronically because that spot price
can move a thousand times a day because
it's based on something called uh the
paper derivatives Market which I'll
explain all the market participates
quote Market participants quote it when
talking about gold and silver that
includes wholesalers dealers refineries
news media industrial and Retail buyers
etc
etc there is a difference however
between uh the US price and the UK price
which we'll go over here by looking at
this all right so resuming the
presentation there are differences
between KX and lbma so the reason why uh
there uh differences in the markets is
they're different markets lbma is an
unallocated Market that works very much
in an opaque way in which a lot of paper
traded it's very private information
it's very hard to get trading
information off of it the comx has more
information but it's more of a Futures
and an options market so the models are
different and the markets are different
and this is the easiest way sort of at a
top- down level to explain why you're
going to get different pricing across
the world there is an Arbitrage
opportunity between the US and the UK
even though there's similar uh Market
systems and there're supposed to be um
sister markets that kind of work
together and have some products that you
can move back and for such as exchange
for physicals which we won't get into in
this program but if you watch our
Tuesday video we talk about exchange for
physicals all the time even though these
are sort of sister markets there has
been increasingly price differentials
between those two and so that basically
goes to prove that when you're looking
at spot price which the banks take into
account both across the pond and over
here uh rates it really is not the same
between the two countries and as we'll
see as we drill down the data it's not
the same between vendors and it's not
the same in
localities uh and that's kind of uh at
the very top ofel a way to explain that
prices are different everywhere in spot
itself is an amalgamation of a couple of
different markets that doesn't
necessarily reflect what you're seeing
in your local or even in your state or
even in your country uh but that's
basically a good chart to illustrate
that as we continue to move on the
presentation what spot is not it does
not reflect the majority of actual
fysical transactions in either the
industrial or the retail bullion markets
and we're going to show that throughout
the presentation more specifically spot
reflects mostly paper contract trading
in the US uh the paper contracts consume
99.9% of all transactions that do not
have any physical component only about
0.1% or less on a given day of the comx
Market is actually physically traded as
well as paper contracts in the UK Market
in an unallocated scheme different
scheme for which we don't even have a
lot of data so we have to trust the data
that the banks are giving us because
there's very little uh publicly
available data on how that market
actually works so there's some um
opaqueness to how spot price is even
determined and then spot itself does not
reflect actual physical trading it's
more of a paper trade across two wholly
completely different markets both of
which really have different price
pricing and both of which don't uptake a
lot of physical trade now there is some
physical trade supposedly component to
the UK being unallocated because you can
get physical gold supposedly in comx but
a lot of these transactions uh are not
based upon actual physical trade uh
those markets especially comex do not
uptake data in a systematic and periodic
manner on the wholesale and Retail
physical buying from the market to
determine buum prices how could they I
don't report my data does atmx report
their data do all of these places report
their data to the comic no that's not a
requirement in the industry so how in
the hell do they know what's trading and
what's selling and at what prices the
answer is they don't so spot is not a
reflection of the physical Market
whether from an industrial perspective
or the retail perspective here's an
example of us spot this is as of today
earlier today now on a lot of days I
want to point out that there are no
fysical deliveries there are only about
six months of the year in which you get
a substantive amount of physical
deliveries for each of gold and silver
and those months can be different with
the exception of December which is the
same
the rest of the months there could be
some physical deliveries but there isn't
a lot of trading on the Futures market
so those physical deliveries have to be
less because to physically deliver you
have to have an open paper trade so if
you have an open paper trade and you
want to take possession you can declare
it but on six months of the year the
paper trading is somewhat muted it's
still there there could be a lot of
paper trading but there are less overall
contracts and it's not considered a
delivery month and in this particular
case for today U this is actually I
believe uh Wednesday's data so so it was
printed today but it's Wednesday stayed
on this Top Line the total volume of
26735 3 contracts traded only 1,40 of
those contracts had a fiscal delivery
for a ratio of0 39%
0.39% and again on a lot of days
there'll be a lot of contracts to trade
and there will be zero% delivery so
again this is not physically determined
this is a paper traded Market those of
you who watch my Tuesday weekly Market
wrap-up I show this every single week
and I go in a lot more detail than I go
here I'm going to save that for those
Tuesday videos all you have to do is go
to any of my Tuesday videos and I'll
talk about it but I just wanted to point
at the top line that the comx market
here in the US has very little to do
with actual physical trade and that is a
fact that is a substantiated fact and an
undeniable fact an uncontestable fact so
some conclusions on spot price spot
prices trade thousands of times per day
but most days they see no deliveries for
each of gold and silver each of the gold
and silver contracts that are traded on
the uh that paper Market only six months
see a substantial amount of deliveries
because by Design is a Futures Market
it's not a current real-time Market
you're betting on the price of those
Commodities in the future mostly in a
paper format not in a physical format in
addition uh in addition to what we
normally talk about there's also this
huge options trading Market uh also in
the Comax it's very seldom understood
and it adds a very significant paper
trading volume onto the metals complex
with no substan substantive physical
trade backing those aren't
physically delivered at any greater rate
than the Futures but it adds a lot more
paper on top which helps determine
prices because in options you're going
for a strike price whether you're in or
out of the money and that is U takes a
lot of demand from the speculative end
of the market and also affects prices
because if you're in the Futures market
and you're trying and you also have an
option you're trying to hit your options
price you may put in Futures contracts
to try to hit that that options price or
to try to influence that options price
and that occurs quite a bit now on the
UK Market data it's not fully publicized
but every analyst I've spoken to that's
been in that market or analyzed that
market says it's unallocated and
contracts are at least 10 times or more
leverag to the actual physical supplies
so even though there are physical
deliveries in the UK a lot of that paper
trading exists on top of it that cannot
be tied to a specific set amount of gold
or silver that is unique to that
contract it is a leveraged Market just
like comx all right we're getting into
part two the physical Market this is the
majority of slides there 25 slides total
the majority go into the physical
there's a lot of data I'm going to
narrate that data at times you may want
to go back and watch rewatch sections of
this video or pause the video and just
kind of stare at it and think think
about it for yourself but I encourage
you to go through this part of the
presentation to the end more than one
time if you really want to understand
because it's a lot more complex than you
may think when you're showing up to your
local coin dealer just buying some gold
and silver or selling some golden silver
or even buying gold and silver jewelry
or going online and say what's the price
of gold and silver it's very complex
so here we go what determines the prices
you will pay online at your local coin
dealer we're going to answer that
question isn't spot reflecting that
local market we're going to answer that
question we're going to answer the
question of if not how does the market
actually price products how come
different products are priced
differently for example American Silver
Eagles versus 10 oun bars why do
different retailers charge different
prices why isn't everybody the same spot
is one price why can everybody damn it
why can everybody be the same why can
everybody have the exact same premium at
the exact same time all the time well
ask yourself the question why isn't the
automobile you bought in Dallas Texas
the exact same prices you bought in Los
Angeles California exactly the same
price as you bought in New York why
isn't the price of eggs the same
everywhere why isn't the price of oil
the same everywhere why isn't the price
of gas the same everywhere why isn't the
price of jewelry the same everywhere
well it's a localized Market we're going
to show that through the data or the
lack of data and why do different
retailers buy back at different rates
well there's a reason for that too it's
supply and demand we're going to go on
throughout this presentation to talk
about all of this data in Greater detail
starting
now and looking at the supply chain for
the precious metals markets we really
have two Supply chains and this is
simplified because it's not 100% correct
in all cases but these are the two major
legs of the supply chain and for all
intents and purposes is all you really
need to know um and the industrial side
of the market you've got the miners who
pull the metal out of the ground the
refiners should get it to the point in
which you can put it on the major
Exchange and a th000 ounz bar form in
silver or 400 oun good delivery bars in
Gold the different exchanges across the
world the major ones are KX UK Shanghai
Dubai you've got the Indian one Etc and
then it goes to large Market
participants who can afford to buy a
thousand ounce bar or five th000 ounce
bars on a contract or one 400 ounce gold
bar
or or four 100 ounce comx contracts
equaling a gold bar if you're going to
take delivery and the retail markets
it's a bit different it goes Miners and
refin ERS but then it generally goes to
the mints the wholesalers the retailers
and then the retail buyers both large
and small so it could be wealthy people
buying at a retail level or it could be
just buying one ounce at a time uh the
top Market is characterized by th ounz
silver bars and 400 ounce gold bars it's
more than dustrial side where they're
taking big amounts and the retail
markets characterized by thousands of
different products from bars to rounds
to government coins to Collectibles to
customized products by thousands of
private and public mints by the way all
of that data in the bottom Market is not
made available to the derivative market
so they have no idea what it is so they
have no clue what you're buying and
selling therefore for spot price does
not represent fiscal supply and demand
it can't they don't know what it should
be moving on some basic toos the
industrial Market deals with not yet
refined products from the mines which
could be a concentrate which is sort of
like a mud which has gold and silver in
it or Dory bars which is usually
combination of gold silver maybe some
other types of metals that need a little
bit further refinement before they get
to the finished stage where you get the
large size bars which also trade on the
industrial markets especially if you're
going to go to The Exchange like comx or
London or those types of things the
retail Market takes the bulk Metals uh
either melts them down or partitions
them and mints them into thousands of
different products with different
markups and in different supplies for
different localities why because you
have a bunch of you have thousands of
mints really across the country that
supply and they don't always have to
ship all the way around the us all the
time they have a lot of local customers
so this is where begin to see as we go
through the distribution pipeline the
further you get to the retail customer
the more the market becomes regionalized
or localized and has very little to do
with that one big Market that determines
spot prices in the US and in the
UK the spot pric is essentially more
related to the industrial Market not the
retail market and again it's not a heavy
delivery Market if you go back up to the
slide we had before off of the comx from
CME Group was only 0.39% of deliveries
for today and some days it could be zero
well that paper Market has very little
data with regards to physical deliveries
in the retail Market because most of
those trades are private and you're not
going to know what they are and the
further you get down to where uh you
guys are buying the product those guys
that are trading the paper up top have
no clue what you're buying or what
you're buying at the paper Traders don't
know what products will be produced once
the metals leave the refiners or in what
amount not all of which goes through
comx markets in any case there are
alternative ways to get the metals you
can buy straight from the mines there's
the resale Market uh there there's all
sorts of ways and all of those feed into
what the prices and premiums will be a
lot of that really doesn't go through
the comx or the UK Market some of it
does some of it doesn't but in any case
all that trading data and that pricing
data never flows back up to the trader
so again spot price is not
representative of supply and demand I
think we proved that point a bunch of
times but I wanted to emphasize it
retail selling back to the supply chain
also feeds the refiners and wholesalers
who resell many of the products that
never cross the industrial markets a
second time and that data is largely
privately held and the U paper Market
Traders and the industrial Market will
have no clue what's going on they may
have some high level numbers about the
overall amount of scrap and gold and
silver but they don't get a lot of that
pricing data there's a lot of data that
they're never going to see that occurs
down at the retail
level all right now on to retail
premiums what are retail premiums retail
premiums basically are the price you pay
above or below spot spot again being a
paper derivative price but when you
actually buy a product there's some sort
of Premium what is that premium
Encompass we're going to go through that
on this slide they're calculated on a
rolling basis from millions of different
distribution points with little to no
public data available to anyone they're
affected by we retail which is you
watching the show remember Supply demand
whose demand you're a big part of that
equation not all demand for the for the
metal is retail some of it's industrial
wholesale that kind of thing but you're
a huge part when you buy you affect the
prices of things up and down based on
what what you're buying either from
online or at your local coin dealer or
from your friend or wherever you're
getting it also uh it's affected by the
supply of each product and the
opportunity cost of providing them by
the wholesalers and retailers because
wholesalers and retailers can buy stuff
and not sell it and sit on it and that
will affect their carrying costs and
other costs and their liquidity and
things like that in addition in the
supply chain at each step of the way
each per each person or entity has the
following cost of warehousing
distribution Insurance rent util ities
administrative meaning people and people
in process by the way computer systems
things like that paper anything that you
would use compliance because there are
compliance laws along the way anti-er
laundering know your customer uh some
people have like PCI compliance of these
credit cards and those types of things
advertising costs and a host other costs
that too long for me to list on this
slide it would be you know you know 100
pages long when we add it up all the
costs well those costs are at every step
of the supply chain they have to be
added in or that part of the supply goes
out of business and you can't get your
medal and you got to go figure out a way
to dig it up yourself that's just a
reality of how the supply chain Works
spot price movements for gold and silver
are completely independent of final
retail demand also affect the profit
margins what do I mean well let's say
spot price is moving up and down and
they don't have the data so they don't
know what you're actually paying uh or
selling it
for and spot price moves up or down
based on their betom where they think
the market will go in the next three
months agnostic of any physical trade
either at the industrial or retail level
well let's say you know I'm a dealer and
I buy something at I I buy an ounce of
silver at 26 bucks and spot price goes
down to 25 well I've got to pull that
from the shelf or guarantee myself a
loss so where spot prices move also
determines what the premiums are uh at
times that where price is really high
and then it comes crashing down premiums
may have to come down but a lot of
Supply may be pulled from the Shelf as
well because if they sell it's a
guaranteed loss and sometimes big the
bigger the business the more price risk
they have because they got to pay
employees and they got to pay all their
costs and if they're really big they
have to sell a certain amount of metal
no matter what so they may be dumping
metal on the market during thin times
which brings the overall premiums down
which also affects everybody because if
you're the smaller guy then all of a
sudden you're going to try to match
their prices and you're trading at a
loss and then it leads into Market
problems which we'll get into in the
following slides and I'll delineate what
that really means as we go further
here's an example of the bull market
this is a data set from Michael Lynch
off of Twitter which I pulled and added
a little bit of information to really
just clarification and R text
but this is during a bull market this is
2008 2011 I want to stress this is
during a bull market this is during a
bull market look at the premiums go up
during a bull market but all the rest of
the time when we're not in a bull market
the typical premium is only 2% 2% is
lower than your average grocery store so
when you're in the gold and silver
market most of the time you're not
making a lot of data if you're a
wholesaler a dealer a miner a refiner
refiners probably make it you know a
certain amount on the refining costs but
if there's less demand they have less
volume that affects them because
refineries are extremely expensive and
capital intensive to set up so the
entire supply chain most of the time is
either trading at a loss or trying to
break even and survive and about 20% of
the time they're actually have pretty
good premiums as this slide illustrates
um and I'll get further into that as we
go further along and it leads to the PTO
principle what's the PTO principle well
it's a famous principle in business that
uh like 20% of your effort leads to 80%
of your profits well that also or 80% of
your benefit overall whatever that
benefit is if you're a nonprofit even
20% of your effort leads to 80% of your
benefit as a nonprofit that's just sort
of something we've realized over time
and it's been encapsulated something
called the PTO principal PTO was the
person that basically put it into uh
recognizable form that we all know and
that we all learn especially if you go
to business school well the wholesale
and dealer markets which distribute
bullion to the retail customer and
determines the final premiums make good
money about 20% of the time the other
80% of the time they're holding on for
deer life and I'm going to show you some
data that shows that uh they're in
Survival Mode uh during these 80% of
time it requires a lot of excess cash to
absorb retail selling what do we go
through the last four or five months a
lot of retail selling I got to the point
where I didn't have much money left in
my corporate bank account because I was
buying so much stuff you know and so you
have to have a lot of cash to absorb
that or you don't do business and you're
not selling it all back out the door so
you're sitting there holding it going
well what do I do with all this metal do
I put it in a vault you know you've got
carrying costs insurance cost all that
kind of thing to consider it results in
losses and consolidation industry which
I'll illustrate here in a moment with
some examples but not everyone makes it
through the lean times and spot prices
often affect the results on future
survival with little to no guarantee of
payback on Metals purchased because spot
is determined in a different Market
spots determined in the paper Market not
the physical market so if it's a lean
time and the spot probably moves against
you you can go out of business very very
easily as any sort of distributor or
dealer in this space and it happens all
the time in fact we had something called
the precious metals winter period those
of you familiar with the crypto World
know that we just went through crypto
winner with the cryptos a lot of the
cryptocurrencies including Bitcoin
crashed it wasn't great it was horrible
you had you know big scandals like FTX
and all that kind of stuff you know that
happens during a winter period in any
Market there's more scandals there's
more losses there's more bankruptcies so
in gold and silver between 2011 2016
bankruptcies and consolidation within
the wholesale and Retail markets were
very common the profit margins were very
low which I'll show you some data on
here in a moment resulting in millions
of lost dollars consolidation tightens
up availability distribution points what
that means to you in plain English is
there may be less people that can offer
you gold and silver or that can buy back
your gold and silver at prices that you
want to sell at or offer you products at
premiums that you want to buy at in
other words less choice of raw when we
go through these winter periods the risk
is that the market will eventually move
into an oligopoly or mon monopolistic
model and I'm going to show you an
example of that here in a moment will
result likely in much less democratized
premium setting in the retail market and
therefore less product choice or choice
of Premium rates on each product for you
the consumer this also adds fuel to the
common retail scams perpetrated on us
precious metals consumers some of which
I've covered in a previous video and a
lot of that is pushing you into higher
margin products whether or not you need
them or pushing you into some scheme to
hold or uh charge additional premium or
uh storage fees or whatever the case is
and that doesn't mean in all cases those
are bad things it's just that if people
aren't making money in the space they
may try to push you into an area where
they can actually make money and whether
or not that fits you it may not fit you
at that period of time so you may end up
paying more for your medals than you
realize so the future of the industry I
think right now is at a it's it's we're
at an inflation Point uh if we don't
educate people on premiums and spot
prices and get them to where they
understand the market a lot better
retail is going to be taken advantage of
by uh factors in the market and it's not
necessarily always done on purpose
sometimes it's just
a a a a result of what's going on in the
market where it's just it it hurts you
uh through consolidation or control of
prices or ol loopies or that type of
thing so very much the future of the
industry you know hangs in the balance
of what happens the next five to 10
years and I'm going to show you some
stuff that happened in the past for
example bankruptcies are common I just
did a random search on a start page
which uses Google's API Google data on
bankruptcies and I got pages and pages
of bankruptcies and I know of some I
know inside baseball on quite a few that
I happen to know because I've talked to
people that were involved in those but
if you just go search Google or any of
your search engines for bankruptcies uh
in the wholesale and dealer space in
gold and silver especially during times
that have been tough like the last 6 to
eight months or 2011 2016 you'll find
that there are tons of them tons and
tons and tons this is an industry which
is so low margin from a percentage
standpoint on profit that during the
lean times a lot of people go out of
business
consolidation is common I'm going to
give you one example that's publicly
available has to do with AAR now we're
not in any way shape or form Throwing
Shade on AAR congrats to them for
picking up what they did and growing and
all this good stuff but we're just
showing you an example of what has
happened uh and aark is just an example
here we pull data from so one thing I
want you to look at is the bottom of the
chart look at the profit margins in 25
in 2015 2016 and 2017 the gross profit
margin in 2015 for this big company was
0 4% how do you survive if you're making
0 4% gross margin because you still have
to subtract out a bunch of other things
including tax expense you can't how do
you survive in 2016 if you're only
making 0.51 in 2017 045 in 201839 in
2019 67 it wasn't until 2020 and all the
government shutdowns when you had that
raise or that that steep rise in 2020 on
demand for gold and silver and Prices
rose that they actually started making a
decent profit they're a core example of
what happens 80% of the time you're not
making squat you're probably losing
money and only 20% of the time when
prices rise and demand Rises and
premiums rise can you make any money
Amar is a huge uh uh indicator it's a
huge Market indicator of exactly what
happens but along the way amark was
using any money that they had to
basically acquire more companies why all
of these companies were either going out
of business needed help needed financing
and Amar had enough money to do it
because they were big to begin with this
is consolidation this is where a lot lot
of outlets that you look at are actually
owned by one company what happens if the
entire industry does that I'm not saying
AAR is causing this but what happens if
this happens to all the big players and
they absorb all the small fish and you
just have four or five players in the
market you have an oligopoly situation
where you could have some price setting
you could have lack of diversity in
product portfolios overall for the
retail consumer this is not as good good
for the big business maybe not quite as
good for the retail consumer but there's
no choice here because if AAR didn't get
involved some of these businesses might
have gone out of business or they may
have had uh Capital crunches and had to
close their doors for a while or sell
off inventory to loss lay off people you
know this is just what happens during
the lean times and this is a a primary
case of it and you can see all the data
here and all the different companies
involved in this to show you that
consolidation and bankruptcies are very
common during the lean times also that
profit margins even for the big players
that have tons of product and tons of
flow through are extremely lean most of
the time this is not a lie this is
publicly available data and this is what
happens precious metals is not a
high-profit margin business despite when
you see premium surge on American silver
eagles or whatever it is it's only going
to do that for a while and it's only on
that product and maybe some other
products and it doesn't fund healthy
businesses most of the time so this is
what happened we have PM winner just
like the cryptos had crypto winner and
it leads to
consolidation well what about premiums
premiums in reality are a function of
Supply that's refiners wholesalers
dealers and the secondary Market that
could be you or somebody else pushing
prod in uh at the time that which you
held it and it wasn't available and
demand and that's industrial and Retail
demand separating industrial retail
demand is hard and not something fully
respect in spot pricing because all that
data doesn't flow back up to them and
they're not trading fiscal anyway
they're doing the paper trade so spot
and retail supply and demand and
industrial supply and demand are not
interconnected and they're not spot is
not a function of those industrial
markets are set up privately between big
players a lot of times and Retail
markets are set up privately between
Distributors and buyers for example you
now the reason I keep emphasizing you is
you guys are about 50% of the equation
and when you I mean retail or industrial
demand demands 50% of the equation every
transaction has supply and demand so the
decisions you make uh in your Market
affect the premiums you're going to pay
the next time you go into that store or
that whether or not your store is open
or goes Belly Up and what products are
able to produce because they're able
toit cool new stuff so you are as much a
function of the market as the guys
delivering the metal and that has to to
be taken into account as well and that
affects premiums if you guys are buying
more guess what premiums go up if all
you guys want to buy American silver
eagles at the same time guess what
premiums go up well that's good for the
people that bought before the premiums
went up because then they can turn on
sell and make a profit or just feel good
about what they have what about the guys
that bought at the top and they get
pissed off when the premiums crash back
down when demand crashes back down and
they're sitting there with American
silver eagles that they bought at $17
premium over spot now they can only get
five to six when they're selling back or
maybe one to two depending on the market
so you really have to watch premiums and
you have to understand supply and demand
but supply and demand is a function of
millions of distribution points not comx
and not the
lbma here's some information on Silver
premium history the next few charts I'm
going to give you are very data heavy
and kind of hard so you may want to
pause at certain times to really stare
at the charts but this one is for um
different weights of silver from monx
and bullon star so what we did here
actually I didn't do it it was um a
friend of mine is in ftech who has a
website uh exploring finance. github.io
I believe is the website URL exploring
finance. github.io you can look at that
on Google and find it he's got a bunch
of charts on the market I'm just using
his charts I didn't compile this but he
basically has pulled from um bullan star
and monx a bunch of data and he's
showing us what you know what the
premiums are well you the first thing
you want to know is that premiums rise
when demand Rises okay demand affects
premium supply and demand effect premium
but during times of perceived crisis
like 2020 when the shut Downs occurred
look at the premium Spike across the
supply chain for silver and here we're
looking at Maple silver 1 oz over 1,000
oce 100 bars over 1,000 oce a bunch of
different products and the different
products get different premiums so why
the hell or American silver eagles or
Maples or government coins more
expensive premium wise than the others
because of supply and demand not
everybody can afford a 100 ounce bar not
everybody wants a generic one or 10 five
or 10 ounce bar most people want
government coins so those premiums are
going to FL more whereas in some of the
less liquid products they'll fluctuate
less now on the one hand if you buy a
lower premium product that's good
because you got in it less money but it
also means that there's less liquidity
for it that's why the premiums are lower
so when you go back to sell that it may
be harder so the person that called me
recently wanted to get rid of the 100
ounce bar I said that's not a very
liquid Market you're the buyback price
on that's going to be lower than it is
in other products and I had to educate
them as to why there's less demand you
know and I'm just as a dealer I'm a
function of supply and demand just like
anybody else you know I have to keep
enough spread to pay the bills keep the
lights on not trying to get rich but all
dealers are the same way but if you're
buying buy and selling 100 ounce bar
that Market's less liquid than a 1 ounce
generic round or a coin that's just the
way that it goes and that explains why
there are premium differences in
products even in the same market and
across different markets within the US
here's gold premium history basically
the same thing Spike up in 2020 because
of you know perceived risk the
interesting to know about gold and
silers you go through these charts that
the premiums have risen since 2020 and
they're still higher than they were
prior to 2020 even though they may go up
or down and even in a relatively weak
Market the last six months for retail a
bullion the premiums are still higher
than they were prior to 2020 why because
think about it Supply overall went down
because when you know prices were down
so long a lot of the mines closed a lot
of the the distribution points
Wholesales retailers went out of
business there was less demand but there
was also less Supply because there there
wasn't as much mind protection
particularly in silver and so those
things both affect the premiums so
premiums are higher overall both because
of the supply in the market but also the
demand but you also knows that for
different products the premiums are
different as well and that's how that
market works and again none of this is
reflected in the spot price that is set
on comx and in the UK that's why
premiums fluctuate premiums are the
difference between the spot price which
has very little to do with physical
trading and the actual physical trade
That's What premium is it's a measure of
the Market's valuation of the m is
relative to the spot price which doesn't
get all that data and they don't know
what you want to buy and sell at here's
different gold product premiums for both
bullion star and monx and you can see
that uh in general the things that are
higher premium are going to be things
like the government coins the Buffalo
the Eagles and the maples and in general
the premiums are lower on things that
have less demand uh for generic ounces
bars and those types of things and both
these charts basically point that out so
that's why you pay more for American
seller regles because you demand them
more and also because they're produced
they're they're a limited market by the
US Mint only one place sells them the US
Mint and if they don't produce enough
and demand Rises at the same time those
premiums blow out and it's not just
people gouging you the wholesalers and
dealers it's a function of what you guys
want versus a function of what we can
get in the supply chain in the case of
American silver eagles or Canadian maple
leafs they're artificially limited by
the amount that the mint is going to
produce and the mint doesn't always know
what you're going to demand so the mint
can produce so many and you demand more
the price goes up the de the the mint
floods the market premiums come down
it's just the way that it happens but
it's a function of both you the buyer
and the mint the producer now the
generic coins bars u in larger sizes or
smaller sizes tend to have lower premium
at all times than the government coins
because there are more Outlets that can
produce them it's not only authorized by
one Outlet there's multiple Outlets you
could have a regional Min producing it
you could you know have somebody doing a
custom pour in their backyard um you
know you could have thousands of
different people producing those more
generic types of things and why the
premiums are lower but that also means
when you sell back you're probably going
to get less premium back that's just the
way that that works uh here's the same
thing for silver you'll notice in 2020
of course premiums blow out and they're
higher for every product because of
those Supply demand characteristics I
talked about
before because there's less overall
Supply specifically of silver because
we're in a shortage between what's mined
every year the last four years and what
we're using both industrial and Retail
wise so silver tends to have more
volatile premiums in addition to to be
more volatile in spot and so silver is
really a highly speculative Market if
you're going to trade it short term
which is why I don't recommend it in
silver gold tends to be more price
stable over time because more gold is
sitting in coffers and use is used less
industrially and there's more profit to
the miners and there's more overall
Supply relative demand silver is more
volatile because um that market there's
less Supply relative demand both
industrial and Retail and um there are
more Market participants so that thing
moves around a lot more it's more
volatile in terms of premiums and
pricing now we did were able to scrape
some data for the last 20 years on
Silver rounds and you notice again in
2020 premiums on everything got
expensive including silver rounds
because demand and up well Supply went
down particularly in silver now in Gold
it's less so there's a little bit more
stable Supply and gold than silver the
last 4 five years but in silver you can
really see the the premiums blow out
because there's less available Supply
relative to overall demand and there's
more demand for silver because more
people can afford silver and what
happened in 2020 the shutdowns shut down
in some Mine Supply but also shut down
down the economy so you have a little
bit less Supply that's now just ramping
up it takes years but you also have a
lot more demand because of why
uncertainty and silver is the poor man's
gold what more people can afford so
that's why the
premiums both as a an overall rate and a
percentage rate went up in 2020 on
Silver so that's why you're paying more
for that so here's some conclusions that
we have on premium premiums are
sufficient to sustain the overall supply
chain from miners to dealers about 20%
of the time the parate the principal the
the other 8% of the time we're just
surviving or losing and we're going
through consolidation we're going
through winter periods both demand and
Supply effects premiums so you can't
just blame your dealer you're buying
from the dealer you're part of that
equation it goes both ways and it also
has to do with the supply through the
entire supply chain all the way back to
the miners and what's available and
what's available in the product that you
specifically want so both uh industrial
and Retail demand affect the supply
chain and the supplies it is a a market
that's trying to price things and could
be a slow moving Market from a supply
perspective but a very fast moving
Market from a demand perspective so
that's why a lot of times the demand
changes really fast and the supply
doesn't changes fast and it causes a lot
of variation in premiums and in rates
and that can change depending on the
town you're in I'm in Dallas Fort Worth
we have a lot of residents we have a lot
of um refineries and mints and public
Outlets so that it's kind of easier
sometimes to get access to stuff so
sometimes you get pricing advantages in
a big market like this what if you're in
a smaller market and it's harder to get
product there and there are less people
demanding it you may have more price in
elasticity meaning prices could
fluctuate even more on certain products
so there's a very local component to
this plus a lot of things are produced
locally a lot of mints are local a lot
of mints are you know only service
Regional and so that supply and demand
of various products across different
localities is different that's why you
can have different rates at different
dealers across the country that's why
you can have different rates even at the
big guys online because it is a very
localized and regionalized market and as
Jack Squad all to do a spot spots
determined in one place in the US in the
comx and they're not even getting all
this retail data so they don't know you
know they just don't know and they don't
control it and that's why you'll get
premium differences in different shops
in different towns and different
products that's the way the Market's
supposed to work and spot people they
say it's a commodity and it should
always be the same don't understand the
supply chain and they don't understand
that paper derivative pricing has very
little to do with the physical so spot
is not physically derived it's derived
by paper and has nothing to do with your
regional and local markets period into
story and if there's nothing else I want
you to get from this presentation it's
that is also impossible to predict what
demand will be on large time scales you
can kind of get an idea through
technical charting and understanding of
economics and uh those all these factors
you can guess at it and maybe you'll
have the direction right as to the
strength of move of the direction and
exact timing it's very difficult and the
supply chain is very slow to change
that's why sometimes you'll see American
cver silver eagles get up to 7 $20 in
premium because sometimes the supply
chain can't deal with retail demand and
that could also be true on the big
industrial bar side if you're not having
enough Supply put into the chain but all
of a sudden Samsung and Apple need a
bunch more silver you know or the
central banks are buying a bunch more
gold it could take years for that Supply
to ramp up and so that's going to affect
avilability products and premiums as
well most wholesalers and dealers cannot
afford a hedge on the markets it's too
expensive buy a contract for a small guy
the big Banks can do it all day long
they're worth trillions of dollars
but us small guys out here it's too
expensive and it's very hard to get a
trading account you have have to
specialist understands that market to do
it and there are sharks in that market
and if you're a small guy you can get
eaten alive with the way the Sharks play
the market so they can't afford to hedge
on it one because the the the cost of
the contract is prohibited but too
because they're most likely goingon to
have their lunch eating if they try to
get in it anyway so it's very hard to
hedge at a local or even a mint level uh
your prices unless you're a huge mint
like the US Min or somebody like that
and you're going to use the banks to do
your juding for you premiums on
individual retail products are largely
determined by retail demand which is
hard to predict and sales data is a
combination of national which we have
some data and local which we have very
little data on what's going on so that's
why we don't always know the direction
of where the premiums are going to go
you can kind of look at spot on
technical charting and have an idea even
though a lot of times you're going to be
wrong because unforeseen events happen
which affect it but on the retail level
for retail products it's very difficult
to know what supply and demand is
because nobody not everybody's
publishing their numbers and that's why
you have discrepancies in price quite
often all right likely outcomes moving
forward of the overall Trends we've seen
the last 15 years dating back to the
last crisis there is an incentive to
move retail customers to higher premium
products to enhanced profits during lean
times moving you over to higher premium
products like American Gold and Silver
Eagles American buffalos uh moving from
generic products to to government M
coinage um um getting into storage if
you don't necessarily need it um and
it's all an individual Choice as to what
you want to do but just be aware when
we're in lean times in gold and silver
uh the salesman may you know need to
make more money and they may offer you
these other things it's up to you to
understand that market and decide
whether you want to get into it there
are also incentives to consolidate
Distributors wholesale and Retail to
control volumes and therefore premiums
think about the Amar example if all the
companies did what AAR did and you had
four five big guys controlling the
entire Market what can they do they can
control Supply they can control premiums
they can control price price so if we
continue to have winter periods in the
gold and silver space it's going to
naturally lead to more consolidation
just like it would any industry the Auto
industry the farming industry any
industry that gold and silver are not uh
are not impervious to
that uh retail buyers must educate
themselves on pricing and products and
also choose their retailers wise let me
give you an example let's say you only
use the big online boxes well you give
them all the volume what do they do they
control price and availability and what
they they buy back from you sometimes
it's good to have more Outlets so
sometimes going to your local coin
dealer can help and I'm not saying that
just because I am a local coin dealer
obviously you're going to think that but
the more distribution points you have
the more chance you have of actually
getting the product that you want at the
price that you want even though there
will be differences in price because
like saying Dallas for worth you can
call 10 guys and get a read on the
market and know what you're doing and
that can take you a couple hours and you
can use that going forward well what if
you only have four or five guys doing
all the supply you can only shop three
or four places at there's more incentive
for them to fix prices and then what do
you do there's less democratization of
prices and they may not want the product
that you want at the price you want to
sell it if you're going to sell it back
so it's not necessarily good so choose
your retailers wisely it's okay to order
from The Big Box guys but throw your
local coin dealers a bone there to keep
that market uh open to a lot of
distribution points so that you have a
lot of choices you don't want just one
grocery store in your area you want five
or six you don't want just one auto
dealer in y you want five or six you
don't want just one movie The in y you
want five or six Choice okay that helps
all of us premiums are often a flasho
topic for the retail public who may not
realize that their buying patterns are
part of the equation or 50% of the
equation sorry you can't see that my
logo is in the way but the the buying
patterns of industrial retail are 50% of
the determination of future market
trends and prices when we're talking
spot plus premiums not just spot but
spot plus premiums so you guys also help
determine that so buy your products
accordingly to what the market is
pricing them at because you're 50% of
the equation conclusions this will be
the end of the presentation spot well
I'll I'll summarize at the very end spot
price is a market anachronism that has
little to do with retail supply and
demand Dynamics I think we proved that
with the presentation and I talk about
it every Tuesday when you when you go
over the week of the market wrap-ups
spot price was originally for industrial
hedging which accounts now for about
onet to 1% of actual industrial trade on
those markets when we're talking
physical deliveries and that's what
hedging is hedging uh market price to a
physical product premiums as a
percentage of spot are somewhat
predictable at times only but also very
widely across an industry priced and Ms
of different outlets and they can jump
up and surprise you when the market gets
froy and you got a lot of activity going
on premiums can spike it happens Supply
is slower to move than demand demand is
the lever that grabs that premium and
drags it up and who are the demanders
well it would be you ladies and
gentlemen premiums are largely a
function of total demand but also
influenced heavily by local markets you
going have discrepancies in local
markets this is not unlike oil groceries
Autos houses Etc beware of scams
designed to take advantage of a lack of
available available data know what
you're getting into when you sit down
and you get into buying the product all
right to some the the spot price that
you see that's determined on that paper
Market has butt kiss to do especially
with your local spy and demand trade
premiums are a function of local and
Regional supply and demand they're also
a function of the overall Supply demand
in the market industrial can affect
retail and vice versa heavy retail can
affect what the Industrials can get in
Supply industrial demand can affect what
the retails can get in Supply especially
with retail products there are millions
of different combinations and dependent
upon how many buys or for a specific
product can be the premium for that
specific product and in a given area
let's say there's only one Min in a
given area producing generic rounds well
guess what generic round premiums are
going to go up okay but if there are 20
uh mints producing generic rounds in a
given area uh just because of Supply
it's going to come down okay and on AR
artificially uh
limited government mined products like
Maple Leaves Krueger ands American Gold
and Silver Eagles those tend to have a
limited Supply at all times and when the
market really wants them those prices
can vary very widely think about it one
person producing American silver eagles
that's why the premiums fluctuate so
much because you have a a buttload of
demanders millions of potential
demanders but only one Outlet producing
but if you're talking about generic
rounds you may have 5,000 Outlets
producing for those Millions so they're
able to supply at cheaper premiums more
consistently on a graph those types of
products and they are American Gold and
Silver Eagles so be careful if you're
get in American Gold and Silver Eagles
if you buy at the right wrong time you
may pay too much premium and you may
have to sit on for a long time and not
feel good about it and it's okay if you
do I'm not saying don't buy that just be
aware of how that market works and
understand that local and Regional
factors definitely do influence the
markets more than what you think and so
the spot price is a starting point for
everything but it's even a crappy
starting point because all of that
demand data from retail and from
industrial doesn't flow back to the
Traders and they're trading a two to
three month contract just to get Pennies
on the dollar a lot of times they to
protect against one part of the market
without having visibility in the whole
other part of the market so those spot
prices really are a bad starting point
and premiums are a way to try to bring
that market into equilibrium with supply
and demand around a bad starting price
and spot and that explains all of the
stuff that go goes on why stuff moves
around a bunch and you can go to one
place and one get different price go
another place get different price that's
why that explains all of that so this
Market really isn't super efficient at
pricing to be honest with you uh there's
probably better ways to do it that being
said this is the market that we have
hopefully that explains it to you guys
uh a lot of you guys will understand
this some of you may not that's okay
it's complex it's crazy the way that it
all works but that's the way that it
works uh hopefully this video is
beneficial to you guys I spent a lot of
time creating it uh we're at 50-minute
mark me explaining it imagine how many
thousands of hours I've been studying
this Market to be able to bring that
explanation to you a lot so hopefully
you guys got a benefit from that if you
do like subscribe all that good stuff
and we'll see you next time on Golds
pros and you can visit us online at
www.gold pros.com
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