Auctions, market efficiency, and the trade in second-hand and antique silver

Using a new, large, unique database relating to silver goods sold at two major UK auction houses we show that the scrap value of silver plays a significant role in determining the realised prices of items sold at silver auctions. However, although scrap silver can be sold for cash at guaranteed prices almost immediately, arbitrage opportunities are extremely limited. Just over 6% of silver goods sell below scrap value but once the buyer's premium is allowed for the opportunity for profit is tiny.