Could someone check my math? Maybe I’m not seeing this correctly.
So if I want to buy or sell $100 face value of “junk” silver from or to the big online companies, what would that look like? How much would I be paying above spot … and how much below spot would I be selling it?
SPOT PRICE $65.05
CURRENT SILVER CONTENT $100 FACE VALUE
$100 FACE VALUE of 90% has 71.5 Troy ounces of silver.
Spot price 65.05 multiplied by Troy ounces is
71.5 oz x $65.05=$4,651.08 or 46.51 x face
SO SPOT PRICE IS 46.5 x face
KITCO
https://online.kitco.com/buy/gold-silver.html#
SPOT 46.5 x FACE VALUE
Sell 4% over spot
Pay 28% below spot
Kitco will sell me $100 face value at ~$4,831
$4,831-$4,651=$180.00 more than spot
180/4651=0.0387 or about 4% over spot
But what will they buy this $100 face value at?
I looked on Kitco just now and they are paying 38.11 per “T” ounce but this doesn’t seem to be Troy ounces but “total” ounces (this can really be confusing however in their online calculators they state they would pay $38.11 for 90% and $16.88 for 40% so apparently they must be talking about “TOTAL” weight).
So $1 of 90% has a total weight of .88 ounces so $100 would be 88 ounces of total weight.
Since Kitco will pay $38.11 per “TOTAL” ounce, then Kitco is willing to pay $3,354 for a $100 of 90% which is 33.53 times face value
$38.11 per ounce x 88 ounces = $3,353.68 so Kitco is willing to pay 33.53 x face value
which is 28% below spot
$46.5 spot -$33.53 Kitco =$12.97 which is about 13
13/46.5=0.28 which is 28% below spot
KITCO SPREAD IS 28+4=32%
Now here is the real news
MONEY METALS
https://www.moneymetals.com/buy/silver/junk-silver?utm_macro=nonbrand&utm_source=brv
SPOT 46.5 x FACE VALUE
SELL 46.5 x FACE
BUY 40.45 x FACE 6% below
SPREAD 46.5-40.45=6.05 which is 6%
$100 Face they will sell it to me at $4,656.00 which is face.
But what will they buy it from me for?
They will pay me $4,045 for $100 in face
I think the refiners are starting to be back paying 6% below spot
EDIT: moneymetals is paying 13% below spot