Auction Closed; Final Bids for 50k oz. silver

(Thank you!)

Silver Stock Report

by Jason Hommel, September 22th, 2008

Here are the bids for the auction.

Bid Update on 50,000 1-oz. silver Olympic Maples September 22, 2008
Update: Why Auction 50,000 oz. Olympic Maples? September 20, 2008
Auction: 50,000 oz. silver Canadian Olympic Mapleleafs September 19, 2008

$3.25 over spot = $16.23, 5000 oz.
$3.10 over spot = $16.08, 5000 oz.
$3.02 over spot = $16.00, 5000 oz.
$3.02 over spot = $16.00, 1000 oz.
$3.02 over spot = $16.00, 1000 oz.
$3.02 over spot = $16.00, 30,000 oz.
$3.00 over spot = $15.98, 5000 oz.  (Only 3000 allocated)

Final floor price: $3.00 over spot = $15.98/oz.!

That was the floor, the rest of the bids didn't make it.

$2.85 over spot = $15.83, 5000 oz.
$2.82 over spot = $15.80,40,000 oz. !  
$2.81 over spot = $15.79, 1000 oz.
$2.80 over spot = $15.78, 5000 oz.
$2.75 over spot = $15.73,10,000 oz.
$2.75 over spot = $15.73, 1000 oz.
$2.67 over spot = $15.65, 1000 oz.
$2.65 over spot = $15.63, 1200 oz.
$2.62 over spot = $15.60, 1000 oz.
$2.60 over spot = $15.58, 1000 oz.
$2.60 over spot = $15.58, 1000 oz.
$2.58 over spot = $15.56, 1000 oz.
$2.56 over spot = $15.54, 5000 oz.
$2.55 over spot = $15.53, 5000 oz.
$2.55 over spot = $15.53, 1000 oz.
$2.55 over spot = $15.53, 4000 oz.
$2.53 over spot = $15.51, 1000 oz.
$2.53 over spot = $15.51, 1000 oz.
$2.52 over spot = $15.50, 1500 oz.
$2.52 over spot = $15.50, 1000 oz.
$2.52 over spot = $15.50, 1000 oz.
$2.52 over spot = $15.50, 2000 oz.
$2.52 over spot = $15.50, 5000 oz.
$2.52 over spot = $15.50, 2000 oz.
$2.52 over spot = $15.50, 1000 oz.
$2.51 over spot = $15.50, 5000 oz.
$2.50 over spot = $15.48, 5000 oz.
$2.50 over spot = $15.48, 5000 oz.
$2.50 over spot = $15.48, 5000 oz.
$2.50 over spot = $15.48, 1000 oz.
$2.50 over spot = $15.48, 1000 oz.
$2.50 over spot = $15.48, 1000 oz.
$2.50 over spot = $15.48, 1000 oz.
$2.50 over spot = $15.48, 1000 oz.
$2.50 over spot = $15.48, 1000 oz.
$2.50 over spot = $15.48, 6000 oz.
$2.50 over spot = $15.48, 5000 oz.
$2.26 over spot = $15.24, 1000 oz.
$2.02 over spot = $15.00, 5000 oz.
$1.92 over spot = $14.90, 5000 oz.

Total bids for 197,000 oz. of silver.

Thanks for bidding.  I'm sorry if you did not win, or if my estimations on how the auction was going threw anyone's bid off.  I received most of the bids in the last two hours.

One bidder for 5000 oz. cancelled his bid, because I lowered the bid size to 1000 oz. in the middle of the auction, which allowed his potential customers to also bid.  His bid was for $2.80 over spot, and did not win.

When multiple bids came in at the same price, those who bid first, were allocated first, but there was not a tie at the final cutoff price, so that did not affect anyone's bid.

Three or more bidders may have been confused about "current spot" vs. the Fix spot, and bid low, below the minimum reserve, at $2.26 over the London Fix.

As we can see, lowering the bid minimum to 1000 ounces increased the number of bids, and increased a lot of work for me to keep track of them all, and report them, but did not significantly impact the final auction price, since there were only two bids for 1000 among the winning bids, and those extra 2000 oz. would have been allocated by the cutoff bid.

I think my biggest error in this auction was in not allowing people at least 3 trading days to sell stock to move to cash to allow participation from stock investors.

Another big error was in using the London Fix, which was at 4AM, whereas the auction closed at 12 noon Pacific time.  But that only affected the "minimum" reserve price of $2.50 over spot, which was lowered by the subsequent rise in the silver price after the London Fix. 

This auction seems primarily for the benefit of those who bid 30,000 oz. and 40,000 oz.  Unfortunately, with the closed auction format, those bidders were not able to bid against one another, as neither of those bids were submitted until the last half hour of the auction.  But maybe that's what they wanted.

I supppose that ideally, the auction should take place in real time where all bids can be better seen, such as at ebay, but for now, I have limited capacity with email technology.

The 30,000 oz. bid winner was Miles Franklin, who gave me permission to name their bid, and price.  They noted that there is a silver shortage, and that it is extremely difficult to locate product for their customers, or that the wait time is over 2 months!  They will re-sell this silver at their normal small markups to anyone who contacts them.

http://www.milesfranklin.com/splash.asp

I hope this auction helps dealers determine an appropriate price to charge for similar silver items.  I also hope it shows the buying public that the major dealers who have silver are not price gouging silver price premiums now.  This is the going price, for large wholesale lots, the price people are willing to pay.  This is the price that people are willing to pay over spot, now, for Olympic Maples.  This price seems to be trending up, and could be higher in the next few weeks and months.

Thank you all bidders for helping us all to determine a free market price for this particular product of silver, at this particular time.




Sincerely,

    Jason Hommel

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