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Nickelless
Administrator
USA
5580 Posts |
 Posted - 10/06/2008 : 05:43:03
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You know I've got problems when I can't sleep and start pondering variances in spot metal prices...but since you guys are my shrinks in that area, lemme throw this question out:
Copper spot prices have dropped about 15 percent in the past week or so, and some of you already know that I probably set a dubious Realcent record yesterday for a below-face final bid on a bag of coppers:
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Current copper melt value (because nobody cares about zinc) on a $50 bag of coppers is $88.32 at the current copper spot price of $2.712. That's 46.4 percent of melt value and only 82.02 percent of face value for this auction, which I realize is probably a fluke that it was THAT low, but bear with me. Glancing at a couple junk silver auctions about to end (rolls of pre-1965 Roosies), the bids are running about $55 for a roll of Ag dimes, about $15.40 an ounce, more than 35 percent above the current spot price. Is this more because silver has plummeted and everyone wants it and it's nowhere to be found, or because copper has tanked and nobody wants to buy it right now? Or is there another option that my sleep-deprived brain just isn't coming up with at the moment?
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jadedragon
Administrator
Canada
3788 Posts |
Posted - 10/07/2008 : 02:13:40
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Economics 101 - Supply and Demand Class:
There are three possible places to park spare cash - silver, copper pennies, and everything else. Silver and copper pennies are clearly closely linked alternative investments. Also consider that the amount of spare cash will vary from time to time (might go up if you just got a $700 billion bailout, will go down if you didn't). High prices depend on restricted supply, and/or increased demand.
First the Supply Side:
1. Copper Pennies are available at every bank (ok, except the ones that live on our dumps) for face value. In fact, Nickelless just proved they are available on eBay for even less then face! (so sorry man)
2. Silver is not available anywhere at spot (that I know of) and in many dealers it is not available at all at any price.
So there is too much supply on pennies, and not enough supply on silver.
Demand Side:
1. Copper penny demand has nearly dried up as everyone on realcent runs after silver as it continues to test lows not seen in years.
2. Investor demand for physical silver rockets up as everyone on realcent (and lots of other people) scramble to buy cheap silver.
So there is not enough demand for copper pennies and a lot of demand for silver.
What will change the current situation for Cu Pennies?
1. Lifting the export/melt ban results in massive melting or export for melting of Cu pennies. (reduce supply/increase demand from new markets)
2. Large scale sorting (driven by a spike in copper prices and lift of the export/melt ban) flushes out almost all the Cu-no way to get meaningful amounts of Cu at the bank for face (reduce supply naturally)
3. Cu Penny sellers unite and refuse to sell below a selected amount (constrict supply artifically)
4. Copper prices moving up again will get Cu Pennies back on people's minds (increase demand again)
5. Silver Prices moving up again will bring more silver out of storage (easing the supply situation) and cause people to look at Cu again
6. Export markets and melting operations start offering to buy sorted pennies (when melt ban is lifted)
7. Sustained flight to hard assets and real money |
“The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man.” – George Bernard Shaw.
Why Copper Bullion ~~~ Interview with Silver Bullion Producer Market Harmony
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NotABigDeal
1000+ Penny Miser Member
USA
3890 Posts |
Posted - 10/07/2008 : 06:13:24
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#3. Very important.
Deal |
Live free or die.
Plain and simple.
"If you love wealth more than liberty, the tranquility of servitude better than the animating contest of freedom, depart from us in peace. We ask not your council or your arms. Crouch down and lick the hand that feeds you. May your chains rest lightly upon you and may posterity forget that you were our countrymen."
- Samuel Adams |
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n/a
deleted
146 Posts |
Posted - 10/07/2008 : 10:28:49
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I think I would add a #3 to legacypac's argument
The general public is pretty ignorant about the realities and long term prospects of supply and mining base metals. Couple that with the fact that gold and silver get the lion's share of the press (mainstream and alternate) and if they're chasing metals at all they're chasing gold and silver (and silver more so than gold because it's comparatively cheaper per ounce).
Also I would add to legacypac's list of things that would change the current situation for copper pennies
8. Bank holidays / failures. Nothing like one of these to get people focused on holding something physical in their hands paper or metal
9. This kind of question that is commonly asked of the public by PM dealers but applied to pennies (and nickels):
Put a $1.00 bill in the hand of a person and $1.00 in pennies in the other hand (2 50 cent rolls) and ask that person which feels more valuable and substantial?
That said I'm quietly acquiring copper pennies now at a steady pace... |
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Ardent Listener
Administrator
USA
4841 Posts |
Posted - 10/07/2008 : 15:36:15
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| As we all know it's dam hard to find copper bars or "bullion" if you will, on the open market for anything even close to the spot price of copper. I can see a sitation were physical copper pennies might start to sell for a lot more than the spot price of copper just as silver is doing now. |
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Think positive. |
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starwarsgeek171
Penny Hoarding Member
USA
651 Posts |
Posted - 10/07/2008 : 16:38:59
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| That's why I seperate my pennies by various grades of quality. I'd like think a box of AU-BU Cu pennies might bring a nice premium someday. |
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moboman
1000+ Penny Miser Member
USA
2555 Posts |
Posted - 10/07/2008 : 20:40:24
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| I put mine in boxes that are unsearched. Yes they are truly unsearched! And one day on ebay, (I hope) they will sell like unsearched wheats are now. |
"99% of all lawyers give the rest of them a bad name" 
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eBay Ag auctions way over spot than Cu
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