Silver Premium Charts

I'm going to dedicate this page to monitor Silver Premium Charts. You can go to this page by clicking on the favorites link at the top of the page.

I will monitor the silver premiums from First Majestic Silver, APMEX silver coins, APMEX junk silver and Shanghai silver premiums.

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Premiums on silver skyrocket

With the 10% smackdown of silver today, the premiums on junk silver skyrocketed to 25% (Chart 1). The disconnect between the physical market and the futures market is reality. The 10% drop in the futures market coincides with a 10% rise in the premium. That means that the physical market is completely ignoring the futures market right now.

Some of the junk silver bags are even sold out on APMEX.

EDIT: now the bags are all sold out.

EDIT 2: now all 90% junk silver bags on APMEX are out of stock.

Chart 1: Junk Silver Premium

The premium on the First Majestic Silver shop on silver jumped to 25% too.

Chart 2: First Majestic Silver premium on silver

APMEX premiums skyrocket to 20% (Chart 3).

Chart 3: APMEX Silver Premium

EDIT: and now they are out of stock:

Figure 1: Silver American Eagle out of stock

Meanwhile, Shanghai silver premiums are going to a high of 5% (since I monitored it) and 1% for gold.

I don't think these premiums are sustainable at all.

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Correlation: Junk Silver Premium Vs. Silver Price

Junk silver is the key to watch these days. So what is junk silver? These are coins with silver in it ranging from 35% to 90%. But mostly we are referring to the 90% silver bags. On APMEX you can buy these 90% silver bags here:  http://www.apmex.com/Category/17/90_Silver_Generic_Bags.aspx

Now what was the premium historically on these 90% silver coins?

In 2008, when we saw a collapse in gold and silver, the premium on junk silver went from a discount of $0.67/ounce or -4% to spot price to a premium of $3.81/ounce or 41% premium (Chart 1). This happened because the silver price was so cheap at that moment. Nobody was able to buy junk silver from the market without waiting several months. So that's why the premiums were so high. We all know what happened in the years after this take-down, silver skyrocketed to new highs of $50/ounce.

Chart 1: 90% silver US coins premiums historically

Today, we see the same happening again.

Miles Franklin posts on his website that junk silver premiums went positive last winter (Chart 2). This is comparable to the winter of 2008. On APMEX, the premium is already at 15% if you buy via Check or Wire Transfer. If we see the silver price fall even further, this premium could go up significantly and possibly go to 2008 highs of 41%. And we all know what that means: shortages and a higher silver price. Silver went from $10/ounce to $50/ounce in the years after 2008 because of a shortage. Today, silver would need to go from $25/ounce to $100/ounce by 2015 just to be comparable to 2008.

Keep watching the junk silver premium. You will know when it is time to buy silver, when premiums go to 41%. That's the moment where the physical market is ignoring the futures market. The physical market will set the price of the futures market as bullion is transferred from the futures market warehouses to the physical hands.

Chart 2: Junk Silver Premium

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