The "cash in" disparity - what would you do?

[Immy]

The "cash in" disparity - what would you do?

This always gets me thinking. Let's say I've got a 50 ounces of silver saved and I want to cash in. Let's also say, just to keep the numbers simple, current silver is $20/oz. and the best deal I've found is 85% of melt value, which is okay but not great. From that sale I'll get $850 or to look at it another way I lose $150.

Now let's take that up a notch to 500 ounces which, in a sale using the same numbers as above, would net me $8,500 and a loss of $1,500. There you have the conumdrum I always ponder - is it worth it to sell large quantities at once like this considering the hit you take? $1,500 isn't chump change after all.

There are of course other variables such as how much I bought the silver for initially and what the market is doing, but you see what I mean? I'm not debating the 15% cut, I understand that.

 

Amazon Forum Fav 👍

How to Research for Treasure Hunting and Metal Detecting From Lead Generation to Vetting - Grab it through Amazon!

[stoney56]

Re: The "cash in" disparity - what would you do?

I wouldn't just sell the silver for the sake of selling it. It depends on what you're doing with the proceeds. Will the bottom line make you more than 15% profit?

 

[MD Dog]

Re: The "cash in" disparity - what would you do?

I'm not understanding what the size of the sale has to do with it since in your example the profit margin as measured in percentages stayed the same 15%

 

[jim4silver]

Re: The "cash in" disparity - what would you do?

I don't know exactly what prices your local dealer gives, but I always use Apmex as a guide to see what I should get if I sell to my local dealer. I don't like the idea of mailing off precious metals and waiting for payment, so I would never send them off like that. But if all my local coin shops were not paying a fair price, I would take the risk and send them off. I am holding my "junk" silver now though because I feel the price of silver is headed higher in the future.

Unfortunately with "junk" silver, you normally won't get melt when you sell. Sometimes though, like in the year leading up to 2000, there was a great demand for 90% and you got a better deal proportionately than you do now from what I have read.

You might try trading your "junk" to a coin dealer in exchange for .999 bars, etc. Maybe he will give you a better rate than if you take cash.

But in any event, if you are getting your silver at face value, you will still make a nice profit when you sell.

Jim

 

[Immy]

Re: The "cash in" disparity - what would you do?

I'm not understanding what the size of the sale has to do with it since in your example the profit margin as measured in percentages stayed the same 15%

You're right, - $1,500 or $150, it's still just 15%, but to a certain extent there's a psychological difference. If I had the same 500 ounces I'd rather sell it in 50 ounces increments and take the $150 hit each time than the bigger cut selling all at once.

Everything's relative I guess. To some people $150 is a lot and to others $1,500 isn't.

 

[jim4silver]

Re: The "cash in" disparity - what would you do?

I'm not understanding what the size of the sale has to do with it since in your example the profit margin as measured in percentages stayed the same 15%

You're right, - $1,500 or $150, it's still just 15%, but to a certain extent there's a psychological difference. If I had the same 500 ounces I'd rather sell it in 50 ounces increments and take the $150 hit each time than the bigger cut selling all at once.

Everything's relative I guess. To some people $150 is a lot and to others $1,500 isn't.

You're not really taking a hit technically speaking. Price is a relative term and if the rate for junk is 85% of melt, then that is what it is worth. It is not the same as .999 silver, even though you can calculate an amount of "pure silver" in the junk coins by weight. For whatever reason, i.e., extra refining costs, etc., dealers don't pay near melt like they do for .999 silver.

Jim

 

[MD Dog]

Re: The "cash in" disparity - what would you do?

It does seem to me that you should be able to get .925 rather than .85 since they are both decimal representations of a percentage. and since most junk jewellery etc. comes in .925 that is what I would look to get.

 

[jim4silver]

Re: The "cash in" disparity - what would you do?

Sell it....my opinion and I don't want to get into a pi$$in contest over politics but I think, depending on the outcome election this year, silver and gold price's may drop. If at this time you don't really need the extra cash you can hold out and see what happens but I belive there is a change coming at the end of the year......just my 2 oz.'s worth

Just curious why you think prices will drop? Anything is possible and you could be right. I think that the only thing that will make precious metals drop is deflation. I guess if the fed started increasing interest rates the dollar would go up and gold and silver could go down. But if they increase the rates I think you would see many banks go belly up and the stock market tank. Kind of seems like a catch 22 for the fed.

Please give some insight into your view. I always like to get different opinions on this type of subject matter. I am still bullish on the future for gold and silver since bull markets traditionally last 15-20 years, and we are in about year 7 so far. But if things are going to tank I want to get out before that happens.

Jim

 

[alpha105]

Re: The "cash in" disparity - what would you do?

More or less 15% is the price u pay for them to remelt and make current value.

 

[Immy]

Re: The "cash in" disparity - what would you do?

More or less 15% is the price u pay for them to remelt and make current value.

Like I said, I understand why they charge the 15%, but what it really means is your silver/gold is never actually worth melt value, unless you sell it to someone unfamiliar with the system, such as at a flea market. Private parties selling their accumulations will always take this "hit" which is why when I calculate my holdings I multiply the total by .85 to get the actual "cash in" value. I guess you could also say the "hit" never actually happens because I could never get the melt value in the first place except under certain conditions.

AFA where prices are going, a HUGE factor is this Israel/Iran scariness. If Israel bombs Iran and the whole area de-stabilizes we'll see PMs go thru the roof and then some. Talk about teetering on the brink! Say your prayers kiddies...

 

[jim4silver]

Re: The "cash in" disparity - what would you do?

More or less 15% is the price u pay for them to remelt and make current value.

Like I said, I understand why they charge the 15%, but what it really means is your silver/gold is never actually worth melt value, unless you sell it to someone unfamiliar with the system, such as at a flea market. Private parties selling their accumulations will always take this "hit" which is why when I calculate my holdings I multiply the total by .85 to get the actual "cash in" value. I guess you could also say the "hit" never actually happens because I could never get the melt value in the first place except under certain conditions.

AFA where prices are going, a HUGE factor is this Israel/Iran scariness. If Israel bombs Iran and the whole area de-stabilizes we'll see PMs go thru the roof and then some. Talk about teetering on the brink! Say your prayers kiddies...

You're right about the Iran situation. When (I feel certain that will happen someday based on what is reported on the news) they are attacked, gold and silver (and oil) are going up no doubt. I can see gas prices double within a couple of months of any attack. It is predicted that Iran will block the Strait of Hormuz so oil will not get through. Don't really know if any of this will happen for sure, but I would not be suprised

But about not getting melt when you sell, that really only exists with junk silver, generic silver and some gold products (like bars). If you get silver Maples, silver eagles, gold maples, Buffalos and gold eagles, etc., you get more than melt when you sell, however, you pay a nice premium over melt when you buy them too.

As long as you are buying from a dealer or selling to a dealer, they are always going to make some profit off the deal, thus you will get less than if you sold directly to a buyer. But the hope is that you buy low and sell higher, so any premium you paid won't matter.

Jim

 

[alpha105]

Re: The "cash in" disparity - what would you do?

Could always melt it urself, pour into bars and sell at a mark up over value =)....they do it on ebay all the time =P....and people pay more than value.....i know wierd....

 

[Immy]

Re: The "cash in" disparity - what would you do?

I was just talking hypothetically...wasn't I?

Whatever I have, I plan to hold onto for a few years. The current lower trends don't scare me since this isn't a store of money I plan to rely on any time soon.

 

[Shake-N-Bake]

Re: The "cash in" disparity - what would you do?

Hello all,

I will solve your 15% problem. With silver at the current price I will buy all your scrap silver coins at full melt right now. 8) Actually 15% in my area is darn good usually lose about 20%, which is a joke because if you want to buy you pay about 15% over spot for junk silver coins. Thus the reason for me starting to coin roll hunt, Buying at face is the best deal YET!!!!

Happy Hunting
Jason

 

[jim4silver]

Re: The "cash in" disparity - what would you do?

Hello all,

I will solve your 15% problem. With silver at the current price I will buy all your scrap silver coins at full melt right now. 8) Actually 15% in my area is darn good usually lose about 20%, which is a joke because if you want to buy you pay about 15% over spot for junk silver coins. Thus the reason for me starting to coin roll hunt, Buying at face is the best deal YET!!!!

Happy Hunting
Jason

Jason,

Not sure if you mean that in your town you are getting less than melt when you sell junk silver?

If so you are getting ripped off big time. Right now Apmex is paying over $8800 for a full junk bag. I know if you go into sell someplace with just a handful you get less per coin than if you sell a whole bag. But either way, melt on a half is 3.50 or so. Thus you should be getting paid more than melt with today's crazy premiums if you sell to a reputable dealer. I have not tried to sell any silver, but here their prices are usually in line with the big internet dealers.

Jim

 

[BBcardsRI]

Re: The "cash in" disparity - what would you do?

If you sell... whether pure or junk, sell on ebay. It's as simply as that.

Ebay is paying well above spot even after all fees, both ebay's and paypal's as well as shipping.

That is of course assuming you actually want to sell at all.

It all comes down to two things... do you need the money? And if so... how badly?

And secondly... do you think "spot" will go down or up in the future... and the future being either short term or long term depending on your particular case (mainly the answer to question #1).

Right now we are experiencing deflation which is lowering spot and commodities as a whole. Once the switch to inflation occurs, prices will go up, and are predicted by many analyists to go up by a decent amount/percent. Its all a matter of if/when this switch will occur. Most economists will tell you that we can't maintain this state of deflation forever and without serious consequences. Will the election by the flip the switch? Maby a little longer before the election has real impacts (beginning of 09 perhaps?). I'm not in position to say, but eventually the price will be A LOT more than it is now. Whether in our lifetimes or our kids, silver will spike, whether sustained or not.

It was only a few decades ago when the price spiked thanks to the Hunts. There are plenty of people on this forum who were alive and well to experience that spike, and those same people may see at least one more spike in their future, but if not, I would bet money that their kids will.

~Dave

 

[Shake-N-Bake]

Re: The "cash in" disparity - what would you do?

Hello all,

I will solve your 15% problem. With silver at the current price I will buy all your scrap silver coins at full melt right now. 8) Actually 15% in my area is darn good usually lose about 20%, which is a joke because if you want to buy you pay about 15% over spot for junk silver coins. Thus the reason for me starting to coin roll hunt, Buying at face is the best deal YET!!!!

Happy Hunting
Jason

Jason,

Not sure if you mean that in your town you are getting less than melt when you sell junk silver?

If so you are getting ripped off big time. Right now Apmex is paying over $8800 for a full junk bag. I know if you go into sell someplace with just a handful you get less per coin than if you sell a whole bag. But either way, melt on a half is 3.50 or so. Thus you should be getting paid more than melt with today's crazy premiums if you sell to a reputable dealer. I have not tried to sell any silver, but here their prices are usually in line with the big internet dealers.

Jim

Jim,
Believe it or not for the heck of it I called my local coin dealer today with silver spot at $9.27 he offered to buy $500 face at 4 times value... Go figure!!! I had my neighbor call(in case caller ID)to get junk silver, 8 times face. The two local dealers here are complete rip offs.
So when I buy or sell I drive 40 minutes to get silver. The only problem is, is that he is a small dealer with little silver usaully available. I bought 250 silver merks, and rosie's today at 6 times face. The funny thing is almost all of the rosie's are AU or MS. Usaully he only has a few dollars a week in junk silver for me but I try to get it everytime he has it cause he sells it to me usaully 5% below spot because that is what the smelters offer him. so I guess it is worth the drive when I make it.

Good Luck,
Jason

 

[jim4silver]

Re: The "cash in" disparity - what would you do?

Hello all,

I will solve your 15% problem. With silver at the current price I will buy all your scrap silver coins at full melt right now. 8) Actually 15% in my area is darn good usually lose about 20%, which is a joke because if you want to buy you pay about 15% over spot for junk silver coins. Thus the reason for me starting to coin roll hunt, Buying at face is the best deal YET!!!!

Happy Hunting
Jason

Jason,

Not sure if you mean that in your town you are getting less than melt when you sell junk silver?

If so you are getting ripped off big time. Right now Apmex is paying over $8800 for a full junk bag. I know if you go into sell someplace with just a handful you get less per coin than if you sell a whole bag. But either way, melt on a half is 3.50 or so. Thus you should be getting paid more than melt with today's crazy premiums if you sell to a reputable dealer. I have not tried to sell any silver, but here their prices are usually in line with the big internet dealers.

Jim

Jim,
Believe it or not for the heck of it I called my local coin dealer today with silver spot at $9.27 he offered to buy $500 face at 4 times value... Go figure!!! I had my neighbor call(in case caller ID)to get junk silver, 8 times face. The two local dealers here are complete rip offs.
So when I buy or sell I drive 40 minutes to get silver. The only problem is, is that he is a small dealer with little silver usaully available. I bought 250 silver merks, and rosie's today at 6 times face. The funny thing is almost all of the rosie's are AU or MS. Usaully he only has a few dollars a week in junk silver for me but I try to get it everytime he has it cause he sells it to me usaully 5% below spot because that is what the smelters offer him. so I guess it is worth the drive when I make it.

Good Luck,
Jason

Shake,

Sounds like a great deal on the mercs. Regarding your other coin dealer, I have found here that dealers who sell the cheapest usually pay the least when you sell to them. I guess that makes sense. The 8X face the dealer is a great deal right now, but 6X face is awesome. There are coin dealers buying from people who pay more than 6X. Apmex is paying over 8X on a full junk bag.

Good to have as many options as possible when buying or selling. If you are in an area with limited dealers it is hard to do that though.


Jim