Time to buy bullion with silver at low?

The price of silver is at its lowest point since February 2010.

Should potential buyers be looking to get in at the present 5-year lows, or will sitting on the sidelines continue to be rewarded with still lower prices?

When asked if now was a good time to buy silver, Julian Jarvis said it’s much better than when the price was higher.

“I’m selling a fair amount of silver,” he said of his business, Julian Jarvis Rare Coins, Greencastle, Ind. “Most of it is in the form of 1- and 10-ounce bars, rounds and .900 fine silver coins.

“At the start of the year, there was some bad weather and the market was soft. In the past couple of weeks, I’ve been seeing more activity and have been selling some silver everyday.

“If someone asks about silver, I’ve got it to sell. Right now, I’d be buying silver myself.”

John Maben, president of Modern Coin Mart, Sarasota, Fla., said buyers want silver in many forms.

“Sales continue to be strong despite the decline,” he said. “Leading the way is sales of 2015 silver Eagles followed by 100-ounce .999 fine silver bars. The bars are more appealing to those seeking the most silver per dollar spent.”

He said he would buy silver in this market, but wouldn’t go all in on it.

“I would buy on each meaningful dip,” Maben said. “I would not suggest that anyone buy unless they have a 2-year or greater, ideally more, horizon as part of their selling strategy.”

Investors buying the 100-ounce bars or any form of silver receive a hefty discount when comparing prices from 2014 to 2015. Kitco reports that the price of silver was $21.22 an ounce on March 17, 2014. By March 17, 2015, that price dropped to $15.56, a fall of $5.66 or about a 27 percent loss in a year.

Jarvis said a lot of buyers are still waiting to see if the price will go down further.

“It’s at a critical level,” he said. “I think it has more chances of going up than it has going down. I follow the news around the world and there’s a lot of stuff going on that I wonder why the price of silver hasn’t gone up.”

There’s volatility with the price of silver right now, he said.

“I was sitting at my desk and saw the price of silver drop and then come right back up,” he said, referring to a 14-cent decline in price followed by a 25-cent rise on March 17.

Most dealers he sells wholesale silver Eagles to are buying smaller amounts because of uncertainty with the market, he said.

“Dealers who normally buy a box are buying only 100 silver Eagles at a time,” Jarvis said.
“Smaller dealers don’t really seem to be selling them as much either.

“My silver Eagle sales are the worst since 1986. We’ve only gone through five boxes this year and we normally sell that in a week or so.”

High premiums on silver Eagles could push investors to other forms of silver instead, he said.

“Between the Mint and the distributors making a profit on the coin, by the time they end up with the collector, they have a high premium,” he said. “There’s also a lot of competition when selling silver Eagles.”

He can also understand the hesitation with buying large quantities of silver in any form right now, he said.

“I remember in the 1980s, just after the boom and bust of silver, I bought and sold a lot and came out real good on it until about three years ago,” Jarvis said. “I kept a little bit more on hand than I should have.”

Maben said that he didn’t think silver buyers were turned off in buying right now because of price volatility.

“I do think there are still a plethora of buyers waiting for whatever they think the ideal entry point is to purchase,” he said.

If they all jump in at once, look out.