Most commodities offer discounts for volume or bulk but silver rarely does and gold will but you better have a fat check book. Ask nearly any broker or shop for a discount and watch how quickly they look over your shoulder and to the next customer willing to pay full price for metal in inventory. So where does that leave metal buyers/sellers looking for a fair deal? Maybe we should be looking at discounted silver and gold from a different perspective.
Yesterday after I picked up my son from school he asked if we could visit a pawn shop in town. I had not been in this shop so I had no idea what to expect but something my son asked me just before entering made me think about discounts. He asked if I thought it was possible this shop had silver and might sell it for less than market by not knowing current prices. This might make sense to a kid but I can tell you there is not one shop that doesn’t know silver is hot and unless they are facing cash flow issues full price is the offering.
But the fact is many buyers are getting 5% to 10% discounted metal even in this day and most of these transactions are right under our noses. The problem is the guys buying are paying spot and then reselling for market which is always over spot. Unlike the traditional investment mentality of buy low and sale high most sellers are content to give up profit based on an outdated mind-set. I recently went into my local coin shop and asked if he was willing to sell a couple of gold pieces on consignment. His reaction was quick and firm by telling me no way, no how, since most sellers don’t even question selling at spot so why should he accept consignment?
Of course coin shops and brokers argue the difference in spot and market leaves room for market fluctuations but this excuse only holds water in days gone by. Most shops and brokers can’t keep inventory in stock so why should sellers give up 5% to 10% in an explosive market like today? Five minutes on Craigslist ( see it here) and you will see buyers 5:1 over sellers looking to capitalize on discounted (spot) metal for those willing to sell.
The only thing standing between fair prices for sellers is the nerve to ask for a better than spot price. The time is right for this type of bravery since soon shops and brokers will be hungry for inventory realizing sellers will only be encouraged by spot +. If you are looking to trade gold to silver or just liquidate some of your stash look outside the traditional box of normal buyers for your metal. You are the one who took the risk so why sell short? The precious metal market as you know it is about to change so our thinking must change with it.