ATB 5oz Silver Already in Price-Gouging Zone

[jeff of pa]

This great article from CoinUpdate cites a primary dealer already quoting a gigantic $26/oz premium on each coin: “One of the primary distributors [Apmex?] that does sell directly to the public has set prices at the equivalent of about $130 per coin above the market price of silver.” The dealers appeared to pay a meager $1.95/oz: “For the present America the Beautiful Silver Bullion Coin Program, the premium paid by the Mint’s primary distributors was set at $9.75 per coin.” What is wrong with this picture?

http://silverenthusiast.com/atb-5oz-silver-already-in-price-gouging-zone/

 

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[DigginThePast]

Okay, I read the article. Question - Why would anyone rely on the Government to buy their bullion?

I have to confess to being somewhat confused by the article. It states that a 5 coin set would run around $1,000. Each coin has 5 oz silver, with silver at $30, so I come up with $750 in bullion value for each set.

Then each coin has a $9.75 premium attached to it by the Mint. That adds another $48.75 on to the cost.

So we end up with the dealers paying $798.75 and selling for $1,000 ($40 per oz), around a 20% profit. Back out the costs of overhead etc and that profit gets eaten up more.

Looking at it from the perspective of running a business it doesn't appear to be out of line or unreasonable to me. Am I missing something?

I don't think its reasonable for the public to expect that one could buy one coin for the same $1.95/oz premium (and have a Mint employee package and mail that coin out) that a dealer pays when buying a coins by the pallet.