The TRUTH on Gold and Silver Spot Price and Premiums

Summary

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

00:00

📢 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。

05:01

🌐 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。

10:01

🏭 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。

15:02

📈 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。

20:02

💰 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。

25:02

📊 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。

30:03

⚖️ 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。

35:05

🔄 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。

40:06

🏦 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。

Keywords

💡现货价格

现货价格是指金、银等贵金属的即时市场价格，通常由大型交易所如COMEX和LBMA提供。在视频中，现货价格被认为是一个广泛引用但被误解的概念，它并不完全反映实际的物理交易情况，而更多地与纸面衍生品市场相关。

💡溢价

溢价是指购买金、银产品时所支付的高于现货价格的费用。溢价受多种因素影响，包括供应和需求、生产成本、市场预期等。在视频中，溢价被视为市场对金、银产品相对于现货价格的估值，它与现货价格的波动和地区市场的特定条件密切相关。

💡供应和需求

供应和需求是经济学中的基本概念，指的是市场上商品或服务的可供量和消费者对该商品或服务的需求量。在视频中，供应和需求是决定溢价的关键因素，它们影响着金、银产品的最终售价。

💡纸面交易

纸面交易指的是不涉及实际物理商品交换的金融交易，通常涉及期货、期权等金融衍生品。在视频中，纸面交易与现货价格紧密相关，但并不反映实际的物理金、银交易情况。

💡市场局部化

市场局部化是指市场条件、供需关系和价格在不同地区表现出明显差异的现象。在视频中，金、银产品的溢价受到地区市场供需状况的影响，不同地区的买家和卖家面临的市场条件可能截然不同。

💡工业市场

工业市场指的是金、银等贵金属在工业领域的应用和交易，包括从矿业公司开采、精炼到制成可以交易的大型金、银条的过程。在视频中，工业市场与零售市场是贵金属市场的两大支柱，工业市场的特点是由大宗交易和期货合约构成。

💡零售市场

零售市场指的是金、银等贵金属在零售层面的销售和购买，包括各种形式的金、银币、条以及珠宝等。在视频中，零售市场与工业市场相对，它更多地涉及到消费者和小规模买家的交易。

💡市场整合

市场整合是指在特定行业内，企业通过合并、收购等方式减少竞争者数量，增强市场控制力的过程。在视频中，市场整合可能导致金、银供应和定价权集中在少数大型企业手中，影响整个行业的运作和消费者的选择。

💡市场预测

市场预测是指对未来市场趋势、价格变动等进行预估的行为。在视频中，市场预测对于零售买家来说尤为重要，因为他们的购买行为是决定未来市场趋势和价格的关键因素之一。

💡供需失衡

供需失衡是指市场上商品或服务的供应量与需求量不相匹配的情况，可能导致价格波动。在视频中，供需失衡是导致金、银溢价波动的主要原因，尤其是在市场紧张或出现危机时。

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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