Silver prices

American Silver Eagles, also AGE is gold eagles, APE platinum, etc.

I had to ask when I first came here too.

 

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Thank you, I feel a little less stupid now.

 

Gold can't cost 1500 an once. Nobody can afford that other than investors. As soon as the economy heats up, gold is dropping through the floor.

Silver, OTOH, is actually scarcer than gold and has a lot of industrial uses.

 

Looks like somebody is throwing lots of bait in the water here. No doubt he'll get some bites when the fish arrives.

 

Hey - I was serious and correct. But if you really want to invest in precious metals, then invest in weapons grade plutonium

http://www.nbl.doe.gov/htm/lists/plutonium_certified_reference_materials_price_list.htm

 

Now that I've clicked on that link, I'm guessing that my browsing habits will be particularly​ well-monitored for the next few months...

 

And your cellphones GPS will be reported to the FBI

 

http://jim.insource.com/elements/Pu.html

It also comes as coins

 

I agree. Silver will go up, as the price of gold is unsustainable. I'd bet on $45/ounce in 18 months, as it is low, relative to commodities, and other precious metals. With the volatility of the stock market, and problems in Italy, Greece, and Spain, investors are looking for an inexpensive safe harbor.

 

I would just say for investors, the price per ounce is not really a concern. I don't care if what I invest in is $5 an ounce or $5000, if its investment money neither are too large of sums.

"Investment" implies larger sums than retail does. Would I hesitate to buy gold at $2000 an ounce for my hobby? Yeah. Would it give me pause if I were buying for investment? No, not if I believe it was going up. Most investors have more than 2 nickels to rub together.

 

That is the issue. The only use for gold, more or less, is Jewerly and Coins (aside from investing). I few thousand worldwide investors have pushed the value far far far too high because they don't care about the cost and are afraid the world is ending and stocks aren't safe and the banks are collapsing. As soon as the economy picks up and gold reverts back to its commodity price, that price is not sustainable. It has to drop to about $500 an ounce.

Silver, OTOH, has a huge number of industrial uses including electronics, film (yes they still make film), photoelectric cells, batteries, soldering and construction, and TON of chemical processes as a catalyst. especially in the production of plastics. The auto industry alone is using about 40,000,000 ounces of silver a year.

So there is NO WAY gold can remain at its price and silver at its price....and you don't need to be a rocket scientist to figure this out.

 

I was just pointing out that even though eBay is higher (comparatively) than most other venues it is still a representation of what people are willing to pay. Yes the smart money will steer clear and go for the better deals, and there is no shortage of them, but nobody ever said the marketplace excluded dumb money. Not to say it doesn't happen, but it seems to me that a lot of other items on eBay are much closer to their retail value if not much cheaper on eBay where as metals are the opposite. This says to me that there are more people who want to buy metal than are educated about it, which lends creedence to the eBay marketplace being a more accurate representation of market sentiment than the big PM dealers who as I've stated hedge their positions and could care less if they sell at a loss. A lot of this is just my opinion so take it for what it's worth.

 

Disagree. I think that price per unit for ANY investment is a driving force, when investing in bulk. Is a specific number the motivating factor? NO. However, the TREND is what large and medium cap investors look for. It is exactly the same as the stock market in terms of large capitalization--look for value, and bank on an upward market trend. I am not referring to the hobby aspects of it, as we tend to buy IRRESPECTIVE of the price of the metal--we buy for the joy of owning the coin. However, I do not buy into static or losing investments.

 

Do you really believe so? I own stock that is value at $7 a share, and I own stock valued at $150 a share. Do I care? not a wit. If I wish to place $10,000 in either I simply buy more shares of the lower priced one. Looking at a unit cost of a bond, stock, PM, etc is meaningless if the unit cost is well below the dollars you wish to invest. The only caveat wouldbe if the unit cost got so huge its hard to afford a single unit, like a share of Berkshire Class A.

So, my contention would be gold could go to $10,000 an ounce and still not affect investors IF they still believed it was a bargain at that price.

That is a completely different discussion.

 

what makes gold crazy and volitile though is that a very small number of "investors" can cause its price to skyrocket.

If i was the government, I'd tax gold capital gains by 80%. It is terrible for the economy to have so much capital tied up in gold and its not good for gold prices either.

 

While I do agree that the gold to silver ratio will one day probably be in this ballpark of less than 10 to 1, I don't think we will see silver outperforming gold until either supply constraint becomes a real issue or that the US dollar is no longer a currency and things are revalued under new terms. So I don't expect to see gold dropping to 500 in USD terms without taking silver with it, but I'm not too focused on the dollar price from a selling standpoint either.

 

Gold is and probably will be a preferred reserve asset of central banks, and that will soak up supply and keep the price up. I tend to think in terms of cost of production as the floor price for metals. For silver, this is probably in the low $20s and for gold around $1,000. This would be the all-in cost including cost of capital. Forget cash costs published by the mining companies. It's a fraudulent calculation.

 

...but, isn't the cash costs their incremental costs? Don't companies continue producing as long as incremental costs are covered? They won't expand, but will continue to run operations as long as they are better off running than shutting down.

THis is why I consider incremental costs the short term possible floor to metals. Its hard though, since so much PM is a byproduct, (especially silver), that you really have to be that companies accountant to know what the incremental costs would be at various primary metal markets.

 

If the price drops so that companies are just covering their incremental cash cost, they will continue producing. But as the higher grade reserves deplete, production will trend down, and if the price never reacted, production would eventually go to zero. Companies must be able to show a business plan to investors and bankers that cover their total cost plus a return to investors in order to obtain financing for the next project that will replace the reserves being used up today.

I'm not saying this will happen. I'm saying it can't happen for more than a relatively short time. So I consider the total cost of production to be a long term floor on the price.

 

I agree. I was just discussing how it can be useful to see how low a price could possibly go before production gets taken off the market relatively short term.