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Gold & Silver Prices Tumble: Coin Shops Feel the Squeeze
8 Feb
Summary
- High gold and silver prices caused a surge of sellers, overwhelming refineries.
- Coin shops are limiting purchases to manage capital and serve more customers.
- Refineries stopped buying scrap silver in October due to market volatility.
Following a period of record gains in January, the precious metals market is now experiencing a sharp downturn, with gold and silver prices tumbling. This volatility has significantly impacted local coin shops, which serve as crucial intermediaries for individuals selling physical gold and silver. High prices have led to a surge in people trading in their metals, overwhelming refineries.
Refineries, such as Precious Metal Refining Services in Chicago, have stopped buying scrap silver since October due to the market frenzy. This has created a backlog of raw materials and disrupted the typical flow of metals, impacting the cash flow of coin shops. These shops, in turn, often sell most of their acquisitions to refineries to be melted and minted into new products.
Local coin shops are finding themselves in a precarious position. While they cannot completely stop buying due to their role in local markets, they are implementing measures like daily purchase limits. This strategy aims to manage their capital effectively, avoid running out of funds, and ensure they can serve a broader customer base with their immediate cash needs.
