Silver Spike Sparks Junk Silver Sell-Off, Prices Tumble
Wild swings in silver prices are shaking up the junk silver market, reminding collectors and investors alike of the importance of tracking trends before buying or selling.
We are all challenged to keep abreast of the temperature of the coin market. It may be useful to follow what a reader shared from his observations at a recent coin show. According to that reader, “When silver spiked to $39 per ounce, a major selling spree of junk silver hit the market. The spree created a temporary glut, enabling refiners to drop their buy price to about one times face [value] under silver melt.”
Despite the drop in smelter payouts, the selling spree has continued, and $1,000 bags of junk silver are being melted down. The drop in what refiners pay, combined with the fact that there are presently very few junk silver buyers, and the fall in silver spot, has caused dealers to greatly reduce what they are paying the public for junk silver. In only one week, the market prices completely turned around. Wild swings in supply versus demand are making the market volatile.”
Market volatility can work either for or against you. Coin day traders, those who walk the floors of a show with a not-so-discreet suitcase full of inventory, likely feel these market swings more than do established coin dealers or their regular clients. Most advanced collectors will agree that coins being treated as an investment are more likely to realize a gain if they are held for a reasonably long period of time. No matter if you sell due to price swings in spot gold or silver, or if you have scarce-to-rare coins you are holding for the future, it remains important to follow the trends in the market to know when to buy and when to sell.
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