Investing

CHART OF THE WEEK: Silver Eagle Premiums On The Rise Again

Four Leading Online Dealers July 24 2020 vs CLOUD Silver Eagle Premiums Rising

As the silver price surged nearly $4 this week, premiums on Silver Eagles also increased.  Due to the high demand for Silver Eagles, the premiums for the coins are still the highest versus competitors.  This is part of the reason that Silver Eagle sales in July are much lower in ratio to the Gold Eagles, as I explained in my previous article, Gold Eagle Sales Already 3X Last Year’s Total & U.S. Mint Still Struggling To Produce Silver Eagles.

At the beginning of the week, silver started trading at $19.75, reached a high of $34.67, and then closed on Friday at $22.86, according to Stockcharts.com.  As I also mentioned in previous articles, there is a difference between Kitco.com’s silver spot price and those quoted on Investing.com and Stockcharts.  Kitco.com uses the London Metals Exchange (LME) quote, and Investing.com and Stockcharts use the Chicago Mercantile Exchange (CME).  Thus, in one week, the silver price increased a bit more than $3 or 15%.

With rising silver prices, the precious metals dealers also have to increase their premiums.  However, from Wednesday to Friday, the 2020 Silver Eagle premium percentages began to rise.  The chart below shows the leading four online dealers average 2020 Silver Eagle premium versus Cloud Hard Assets (based buying 1-19 coins):

Since the beginning of July, the four leading online dealers’ average 2020 Silver Eagle premium was 43% of the silver spot price and then trended lower to 40% on Tuesday, July 21st.  However, over the next three days, the four leading dealers’ average 2020 Silver Eagle premium increased to a monthly high of 45%.

In contrast, CLOUD HARD ASSETS started the month with a 30% premium on its 2020 Silver Eagle coins, it then fell to a low of 25% on July 22nd, and is now 28%.  So, the difference between the two is 13%.  With the average spot price for the four leading dealers being $22.90, the group’s total premium for a 2020 Silver Eagle was $10.27 per coin versus $6.48 from CLOUD HARD ASSETS.

I am still surprised that the largest online dealer, who is one of the U.S. Mint’s Authorized Purchasers, is charging the highest premium for its 2020 Silver Eagles, and other silver bullion coins.  Here are the four leading dealers versus Cloud Hard Assets 2020 Silver Eagle prices as of close on Friday (based on buying 20-99 coins):

Again, the largest online precious metals dealer is charging nearly $2 a coin higher than its competitors.  CLOUD HARD ASSETS is the only dealer that is charging less than $30 for the 2020 Silver Eagles.

Some people have emailed me asking if the prices Cloud Hard Assets is charging is TOO GOOD TO BE TRUE or a SCAM.  Even one commenter stated the following in the blog:

“Yes keep saying CLOUD HARD ASSETS, where else can you pay almost half the premium of anywhere else on the market??? I wondered myself if it was a scam, but have now made two large orders through DAN at CLOUD.”

There is a reason I sponsor CLOUD HARD ASSETS on my website because I believe they are one of the most honest and upfront dealers in the industry, which also provides some of the best prices and services.  Another commenter said that he had been using the largest online dealer for ten years and had no problems.  I say… GREAT.  However, if you don’t mind spending $3-4 more per coin to buy your 2020 Silver Eagles from this dealer than I don’t have a problem with it.  But, if you do… I suggest you shop around.

It’s going to be interesting to see how the gold and silver prices trade next week and in August.  Some believe we may see a nice correction.  Others are saying that if the stock market crashes again, then the gold and silver prices may fall along with it.  This could be true.  However, it’s a WIN-WIN situation for gold and silver?  Why?

If prices continue higher, we will get more physical buying, which will put even more pressure on available supply.  If the gold and silver prices fall hard again, we will see even more buying than we did in March-April, when the Dealers silver inventories were wiped out.  So, precious metals investors should be prepared for either scenario.

IMPORTANT UPDATE:  I will be posting an exciting Silver Update on Sunday Night.  It seems as if the Silver market is experiencing a significant change that may lead to much higher prices.

You can contact Tom or Dan at CLOUD HARD ASSETS here:  PRECIOUS METALS INVESTING.

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