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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: Chispas who wrote (102059)	3/11/2009 9:14:05 AM
From: Horgad	4 Recommendations Read Replies (3) of 110194

"A couple of months ago I bid twice for a single 1oz gold American Eagle coin. I was out-bid each time. The winner was about $75 - $80 over spot. Now they'd be $100 or more over spot....Am I correct ?" 1. If a gold coin sells for $1000 on E-Bay, the seller will pay 3% PayPal fees and a minimum of 3.5% E-Bay fees or $65 in fees. That same seller would be happy selling the same coin outside of E-Bay for $50+ less. 2. If the bidder that you beat you had a 8% coupon, he under bid you and still won and paid $80 less than shown. Assuming that there has not been a rash of coupons released or a promotion started, a $20 increase to $100 over spot on E-Bay would mean that the real world premium has increased $18.7 ($20 - 6.5% fees). What it would not show is that the market price of bullion is $100 over spot. If you contacted that seller directly they would sell to you at discount, because that would net them same amount by avoiding selling fees and if there were no coupons, you wouldn't have to compete against bidders with a huge advantage over you. I am not saying that E-BAY data is not good to look at, but rather saying that it is not a straight forward or steady representation of the real POG. However, I could see it as being a GOOD place to get a general feel for the current enthusiasm in gold bullion based on relative price movements assuming that you could figure out a way to measure in the coupon factor. I would guarantee that some of the movements in the E-BAY premium (as seen on Bart's chart) are due to coupon releases and promotions starting and stopping and not due to changes in E-BAY market sentiment... Edit: sorry for all the deletions and edits. I am trying to get this right without stepping on toes.

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