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Silver Wheaton Corp. Message Board

  • stockboy4523 stockboy4523 Feb 13, 2009 4:31 PM Flag

    Today i bought my first 20 ounces

    of silver eagles at a neighborhood coin shop in Chicago. Being a novice into buying physical silver, i asked many questions. He explained to me that what i just bought (20 oz of eagles) was not a smart buy being that i paid 5 dollars over spot. He said that i was better off buying the 10oz bars for 2 over spot. My question is if that's the case, why is everybody buying the silver eagles and why is the premium so high. I will buy the 10oz bars next time, but i can't understand why people would buy the eagles when they could get a better buy purchasing the bars. Thanks. Any advice is appreciated.

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    • First of all,I never heard of somebody selling you something and then saying you were stpid for buying it. Secondly,while he gave you the right mark-up figure ($1) for the 100 oz bars ,he was about a buck high on the coins. Did he actually have the 100 oz bars for sale ?

      Why the big difference in spreads ? First of all if you ever need the silver to barter for food or goods,the coins are far better for obvs. reasons. Secondly,it's simple supply and demand. Eveybody wants the silver dolllars,and the supply is tight,so the mark-up is more. I just bought a half bag of Kennedy 90% uncirculated half's and they were pretty difficult to even find.

      To further explain.many of the large dealers have a ZERO supply of small gold coins like the 20 Swiss Franc. People just bought up the supply and nobody is selling.

      Anyway...good luck and I wouldn't buy again from somebody that charges me too big a premium,then gives me the correct spread on something else and says I'm not smart to boot.....

      • 1 Reply to rawdogs99
      • Thanks for the information fellas...this was my first buy and enjoy learning what i could have done better. I will be buying 20oz of some type of silver every 45 days. Hoping when my 10yr old is done with high school it will be big help for him. On another note...i sold my slw one day before the big runup and bought drys...well if you follow the market you know what happened to drys the day slw took off. Lost over two grand in 2 days drys and am now back in slw with a lot less shares than when i first owned them...big lesson learned. I'm going to park it here for a while.

    • Eagles always demand a preium because they are legal tender(undervalued) and minted by the US Gov, which is a better sign of their purity. Bars and rounds minted by private mints sell at lower premiums over spot becasue of this. It used to be that you could buy Eagles at $1.5 to $2 over spot and 100oz bars at $0.50 over but this is not the case now with increased physical demand. Consider buying from Northwest Territorial Mint (google search their web site) where rounds/bars can be bought as low as $1.10 over spot. I purchased several times from them without any problems but expect to wait 2-3 months for delivery.

      • 2 Replies to judgeram3
      • Bullion coins issued by the US gov't are not "legal tender" a term created to salve the fiat money to make it respectable, i.e., it is acceptable in payment of taxes to fedgov.

        Instead, these same bullion coins are "lawful money" that actually complies with the Constitution.

        You ought to explore these differences. It may cause you to further understand the fraudulent nature of our debt based monetary system that is now beginning to fall down around our ears.

        The premium is a result of the Eagles being a known and easily recognizable thing as opposed to coins and bars minted by non-governmental entities. This, I suppose, may be predicated on the assumption, misplaced or no, that government produced bullion is somehow beyond any hanky panky like dilution, underweighting and other such scams to lessen the particular underlying content.

      • I have bought from NWT Mint as well. I bought 5 oz, 10 oz, half dollars, and Vienna Philharmonics. They are really beautiful coins. The American Eagles are my favorite though. I buy 20 - 40 every quarter or so. Congrats on your first purchase. One day one sign of wealth will be ownership of precious metals.

        One more thing, Eagles can be put into a retirement account as well which is not a bad thing because the 28% tax bracket applies to any gains upon sale.

    • patriots3xsuperbolwchamps patriots3xsuperbolwchamps Feb 13, 2009 5:13 PM Flag

      Some people like coins better. 2009's are coming out of the Mint, possibly still 1st strikes, so they are commanding a higher premium....$5 is too high, in my opinion...I'd have bought 08's or something, probably a 3 or 3.50 premium. Bars are the way to go, for a pure silver buy. I collect/buy both, the American Silver Eagle is great looking coin and worth a slightly higher premium....Come June or so that $5 premium will be more reasonable....but hopefully silver will be in the $15-$20 range by then.

      Congrats on the 1st buy though....I dont see how you can go wrong holding Silver long-term

 
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