A conversation I had with AI this evening:
An interesting thing has happened over the last 10 days. I cannot find suppliers offering good gold coins at spot any longer, nor can I find silver eagles at $2.90 over spot. Any idea why?
Yes — and the data suggest you are seeing a genuine premium expansion in physical bullion over roughly the last two weeks, especially in retail coins. It is not merely that you happened to miss a few promotions.
The most revealing number is Silver Eagles. The U.S. Mint currently charges its Authorized Purchasers LBMA silver price + $3.05 per Eagle, before the wholesaler, secondary distributor, or retail dealer makes anything. That means the $2.90-over-spot Eagles you were buying were actually below the Mint's current primary-market premium. A dealer could offer them at $2.90 only because they were selling older/secondary-market inventory acquired cheaply, liquidating stock, running a promotion/loss leader, or buying coins back from customers below spot-plus-$3.05.
That cheap secondary inventory appears to have been getting absorbed.
FindBullionPrices' data backs up your observation. For random-year Silver Eagles, the average lowest premium was only 2.28% in August. In September it has risen to roughly 3.4–3.5%. Their broader measure of silver-coin premiums is up roughly 2 percentage points over the past month, while gold-coin premiums are up about 1.2 percentage points.
There are several things happening simultaneously:
When you were buying Saint-Gaudens, Krugerrands, platinum coins, Eagles, etc., dealers appeared to have plenty of secondary inventory while retail demand wasn't absorbing it quickly enough. That created bizarre situations like:
recognized sovereign gold ≈ melt
Saint-Gaudens ≈ bullion value
ASEs ≈ +$2.90
platinum sovereign coins ≈ +20 over spot
Those are not normal long-term retail spreads.
The market has now moved toward something more like:
generic silver: spot + ~$1-ish available occasionally
Maples/Britannias: spot + ~$2–3
random ASE: spot + ~$3–5+
current ASE: often +$5–7+
common sovereign gold: roughly +1–3%
pre-1933 gold: increasingly carrying an actual coin premium again
There is a useful confirmation in the dealer data: even though finished silver coin premiums are HIGH, junk silver premiums haven't increased materially, and gold bars remain relatively cheap. That's exactly what you'd expect if this were a finished-product/inventory phenomenon rather than a true shortage of raw precious metal.
So I would not chase the premiums right now.
An interesting thing has happened over the last 10 days. I cannot find suppliers offering good gold coins at spot any longer, nor can I find silver eagles at $2.90 over spot. Any idea why?
Yes — and the data suggest you are seeing a genuine premium expansion in physical bullion over roughly the last two weeks, especially in retail coins. It is not merely that you happened to miss a few promotions.
The most revealing number is Silver Eagles. The U.S. Mint currently charges its Authorized Purchasers LBMA silver price + $3.05 per Eagle, before the wholesaler, secondary distributor, or retail dealer makes anything. That means the $2.90-over-spot Eagles you were buying were actually below the Mint's current primary-market premium. A dealer could offer them at $2.90 only because they were selling older/secondary-market inventory acquired cheaply, liquidating stock, running a promotion/loss leader, or buying coins back from customers below spot-plus-$3.05.
That cheap secondary inventory appears to have been getting absorbed.
FindBullionPrices' data backs up your observation. For random-year Silver Eagles, the average lowest premium was only 2.28% in August. In September it has risen to roughly 3.4–3.5%. Their broader measure of silver-coin premiums is up roughly 2 percentage points over the past month, while gold-coin premiums are up about 1.2 percentage points.
There are several things happening simultaneously:
- The extraordinary dealer deals were probably inventory-clearing opportunities. When we were finding Eagles around +$2.90 and recognizable gold coins essentially at melt, those prices weren't sustainable primary-market replacement prices. Dealers had accumulated secondary-market inventory and were competing aggressively to move it.
- Physical buyers have apparently stepped in on the recent price weakness. Gold traded above roughly $4,414 on September 9, then dropped into the mid-$4,300s; silver went from almost $68 on September 9 to roughly $64–65shortly thereafter. When spot drops quickly, retail buyers commonly buy the dip. That can remove the low-premium dealer inventory much faster than the wholesale pipeline replaces it.
- Dealer prices don't necessarily fall dollar-for-dollar with a sharp spot decline. A dealer who had a $69 Eagle when silver was $66 may still want roughly $69 after silver drops to $64. The apparent premium therefore jumps from $3 to $5 even though the actual retail coin hasn't gotten more expensive. Properly hedged dealers aren't simply refusing to take losses, but short-term volatility still affects spreads, replacement inventory and promotions.
- The U.S. Mint creates a hard floor under new Eagle economics. This is particularly important. New Eagles start at spot + $3.05 to the Authorized Purchaser. Once distribution costs and dealer margin are included, a normal retail price of +$4 to +$6 isn't surprising at all.
- Gold coins show the same effect, although less dramatically. Aggregate gold-coin premiums are now categorized as elevated and have increased by roughly 1.1–1.3 percentage points in two weeks. Meanwhile gold bars haven't experienced the same increase. That distinction is important: the shortage isn't gold itself. It's attractively priced fabricated coins.
What I think happened to the deals we were finding
You caught an unusually favorable window.When you were buying Saint-Gaudens, Krugerrands, platinum coins, Eagles, etc., dealers appeared to have plenty of secondary inventory while retail demand wasn't absorbing it quickly enough. That created bizarre situations like:
recognized sovereign gold ≈ melt
Saint-Gaudens ≈ bullion value
ASEs ≈ +$2.90
platinum sovereign coins ≈ +20 over spot
Those are not normal long-term retail spreads.
The market has now moved toward something more like:
generic silver: spot + ~$1-ish available occasionally
Maples/Britannias: spot + ~$2–3
random ASE: spot + ~$3–5+
current ASE: often +$5–7+
common sovereign gold: roughly +1–3%
pre-1933 gold: increasingly carrying an actual coin premium again
There is a useful confirmation in the dealer data: even though finished silver coin premiums are HIGH, junk silver premiums haven't increased materially, and gold bars remain relatively cheap. That's exactly what you'd expect if this were a finished-product/inventory phenomenon rather than a true shortage of raw precious metal.
So I would not chase the premiums right now.
