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Old 03-04-2013, 11:25 AM
freeier freeier is offline
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Hmm... but the Mint's revenue comes from selling their finished coins to authorised dealers right? So if silver price goes down, they will likely be selling to dealers nearer to the prevailing lower spot price and hence lower revenue while their cost is higher. Vice versa if price goes up, they gain with higher revenue. Yes? No? I don't really know how the Mint work, whether they hold lots of excess raw silver for future production or produce the coins on JIT basis...
precisely like u said. but there is a intake/production/delivery turnaround time. and its the price fluctuation between this turnaround time that matters... if its me i might just hedge the silver prices here.. but again for them since everything is ongoing (monthly intake/production/delivery) so technically when price is fluctuating it should have certain characteristics.
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Old 03-04-2013, 11:44 AM
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pika pika is offline
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Hedging also has a cost and it may help mitigate unfavourable drastic price movements to minimise operating losses, but fixed overheads and operating costs will continue to run and net profits cannot be achieved without a minimal level of revenue which fluctuates with the spot price.
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Old 03-04-2013, 02:42 PM
freeier freeier is offline
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Hedging also has a cost and it may help mitigate unfavourable drastic price movements to minimise operating losses, but fixed overheads and operating costs will continue to run and net profits cannot be achieved without a minimal level of revenue which fluctuates with the spot price.
hedging takes away the fluctuation of silver material so even if there is cost, the cost is necessary and will be added into the premium charge on the coin.

that's why we are paying spot + 15% or so for ASE ... the 15% plus any discount they get from silver producer for their purchase will need to cover their 'fixed' overhead ..
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