Price for American Silver Eagles - why bid ask so wide?

[piezoe]

I have wanted to diverse into silver for a long time. The problem is the huge bid ask spread.

When silver was around $13 it was $3 over spot.

Now the Eagle goes for $6 over spot. Is this a realistic price? It must be because it is the standard across the board.

Can some explain the wide spread?

low liquidity.

 

[morganist]

There is an observed relationship between the USD and the silver price. When the dollar moves one way the silver prices usually moves the other way to 70% of the dollar movement. This negative correlation can help to predict silver prices. The observation I have been making recently is there is a negative correlation of the USD movement against the Euro. If the USD rises in value against the Euro the silver price falls and if the USD falls in value against the Euro the silver price rises. This is not always guaranteed but the USD to Euro value seems to be a leading indicator to the silver price.

 

[morganist]

low liquidity.

There has been a lot of silver trading since the Coronavirus has taken place, which would make me wonder if the premium has fallen or whether the premium is based on something other than low liquidity. But in any other market you would be right, low liquidity increases the spread.

 

[Cuddles]

Because they're shithole countries, not the world's reserve currency. If the world's reserve currency suddenly becomes worthless the worldwide impacts are monumental. If Zimbabwe's currency becomes worthless, not so much.

Oh I dunno, imagine the country throws itself into civil war a few months from now over the election. Sure the world economy will suffer for it but most countries could remain relatively unscathed due to this being an internal conflict. Money would flood to the next reserve currency and other safe heavens don't you think?

 

[vanzandt]

imagine the country throws itself into civil war a few months from now over the election.

Hahahahaa.
Perhaps you won't read this, but everyone else will. You will too of course, thats pretty obvious.... but whatever on that. I don't blame ya, I'd read me too.

There's not gonna be any civil war.
Jeeezuz christ.... you guys are so f'n stupid.

 

[vanzandt]

Hey Nobert.... you're artistic right.... draw up a logo for Trump TV.

 

[SunTrader]

In that situation what would be the next reserve currency?

Chinese Renminbi of the world's second biggest economy?

 

[Sig]

Oh I dunno, imagine the country throws itself into civil war a few months from now over the election. Sure the world economy will suffer for it but most countries could remain relatively unscathed due to this being an internal conflict. Money would flood to the next reserve currency and other safe heavens don't you think?

No, I don't think! The world economy would be massively massively impacted at every level if the world's biggest economy, biggest market, source of reserve currency, and store for most of the wealth of countries like China suddenly devolved into civil war so bad that US dollars had suddenly had zero value and we were going around bartering silver coins. But somehow not short of food and still safe.

The rest of the world wouldn't even come close to emerging unscathed, he'll look what a minor hiccup in the U.S. housing market did to the rest of the world in 2008. And that's again assuming a knife edge one in trillions chance that the U.S. descends into that level of chaos and doesn't draw any other country into it.

We'd all be better served putting our effort into voting for people who are publicly committed to honoring the results of elections and stopping in their tracks those who are not and are trying to destroy faith in our electoral system, than buying silver coins (but only if you can get a good enough deal on them). Don't you think?

 

[volpri]

No, I don't think! The world economy would be massively massively impacted at every level if the world's biggest economy, biggest market, source of reserve currency, and store for most of the wealth of countries like China suddenly devolved into civil war so bad that US dollars had suddenly had zero value and we were going around bartering silver coins. But somehow not short of food and still safe.

The rest of the world wouldn't even come close to emerging unscathed, he'll look what a minor hiccup in the U.S. housing market did to the rest of the world in 2008. And that's again assuming a knife edge one in trillions chance that the U.S. descends into that level of chaos and doesn't draw any other country into it.

We'd all be better served putting our effort into voting for people who are publicly committed to honoring the results of elections and stopping in their tracks those who are not and are trying to destroy faith in our electoral system, than buying silver coins (but only if you can get a good enough deal on them). Don't you think?

 

[morganist]

There seems to be a one to two day lag in the price of the USD to the GBP and the Euro that has a negative relationship with the price of silver e.g. the USD value increases the silver price falls one to two days later and conversely the USD value decreases the silver price rises one to two days later. This gives a leading indicator to the direction the silver price moves, although I am sure it is not fool proof it gives a good guiding signal to the silver price.