Silver Prices: Paper, Physical and the Coin Dealer

Confirmation of the coming end to the paper silver market will very likely pivot on the physical dealers’ bid price, so this key benchmark bears very close watching indeed.

When the buy back for physical silver price far exceeds the paper price, then you will know the silver market is just about ready to explode to the upside.

We recently surveyed a group of dealers. Basically, a physical silver dealer will pay more than the current spot price if he is desperate to obtain the inventory that he is buying directly from the public, but not under any other circumstances.

There is a natural limit to how much such a dealer will pay for silver, since he has to make a profit when he then sells it on to someone else.

That odd situation may actually have happened last month, and it may happen again in the future under circumstances where extreme shortages of the physical metal itself are seen.

Read more: MarketOracle.co.uk, 10 June 2013