How Low Will Silver Go?

Why not? Unless you wish to sell in the next few years, silver purchasers should be happy with lower prices. You are buying more ounces per dollar aren't you?

Everyone has different timeframes they wish to hold PM, therefor everyone has different desires for current market prices. Personally I still have a couple of decades to go before I will retire, so I appreciate prices falling back down to levels where I feel comfortable and enjoy buying.

 

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Aren't we always surprised when markets swing past equilibrium? I never in my wildlest dreams thought the DJIA could dip into 6000's a few years back, but it did. The pendulum swung too far. We all know this happens but we are all surprised (me too) when it does. Funny when you think about it. When that dang pendulum starts moving, it is really hard to stop it.

I think the silver pendulum got some more to go. More important though with silver, we are really just talking about matching inflation and not building weath, so I have a hard time itching to get into something, being afraid to miss it so to say, when the reward is simply that not great. So my take on silver is it is heading lower and patience is the key. Just when you think it just cannot get any lower, wait a bit more and see if it does

 

But as we have seen, sometimes matching inflation is about as good as a guy can do. This is true especially for at least part of a portfolio.

 

Marc Faber, publisher of The Gloom, Boom, & Doom Report was interviewed on CNBC this morning and his commentary pertains to this topic somewhat.

He didn't address silver per se, but he did say that the cost of production for new gold was around $1,100 per ounce. He didn't go quite so far as to assert that constituted a floor, but the implication was there. I'd remark, as an example of how that might not be, that the replacement cost of houses (in terms of construction expense) didn't seem to prevent existing home prices from sinking to levels below that figure over the course of the last several years.

He also noted that there's a credit bubble in China and that in general interest rates are artifically low. My takeaway would be that Chinese demand for precious metals could be severely curtailed in the near future and if the U.S. takes the lead in allowing interest rates to come back up, which now seems likely, that the dollar strengthens. Those factors would work to further depress gold and silver prices.

My impression overall is that silver has yet some negative room left to run. The real question might be when do large holders of physical silver capitulate and flood the market in the course of fleeing to more stable investments or business models, and to what degree that could contribute to a downside cascade. An indicator that this is impending might be if some of the smaller bullion and coin dealers, with whom we've already seen some aberrant practices, begin to give up and close their doors altogether.

 

I think that silver may go a little lower but will rebound. It is tough to predict the cellar but I'm not trying to make a quick profit. I'm guessing that it may go to $17 but return to $30 within the next five years. I'm buying silver this week in the form of ETF's. I already hold a lot of physical silver that I bought years ago at $10. I'm currently in India and they are currently crazy for gold and sometimes silver. I know that the Chinese are slowing their buying, but they like to have gold and silver and may move their money there pretty soon.

 

I agree. The devil is always in the details as well, meaning was this "cost" fully costed or incremental costs? A mine will continue producing as long as incremental costs are covered, meaning the costs above and beyond the cost of mothballing a mine and reopening later. This and future hedging is why mines can stay open and produce for a long time well under their fully costed price.

Bottom line, short term anything can and does happen. Long term I do not see PM being able to sustain $12 silver or $800 gold, but it sure could go there for a while. Will it? I have no clue, like anyone else really, no matter what pundits on either side might claim. Personally I am thinking for some reason if I could get a monster box for less than $10k it might be hard to resist. My main problem would be where the heck to keep it. That is the problem with silver, its too valuable to leave lying around the house, but very bulky for SDB storage.

 

I don't know how low but I want the premiums to drop a bit as well. I'm hoping for >$17 silver so hopefully cost of ASE will be $20 or less.

 

Welcome to the $18.xx

 

I'm going to buy a tube or two of ASEs tonight. Maybe going a bit lower, but this is a price I can live with either way.

 

Falling knife folks....
There is no reason to be thinking we will be seeing a quick recovery in these economic conditions. IMHO, patience will be rewarded.

 

this is what i'm hoping for , i'm stacking cash right now so when it gets below 15 or so.. if it does turn around I will be a sad panda

 

These are to hold for sure. I've been holding on to some money for a few months now to put into more PM. I've already saved about $400 on two rolls by being patient with this purchase.

Not throwing much into it at this point, I agree that there may be more of a decline, who truly knows though, right?

 

I am in total agreement with the premiums going down. Over $10.00 spot on some coins online. Unfortunately with silver dropping online sellers will keep the premium high to make up for the loss on the cost for the coins they are selling.

 

these guys are about 5 min from my house, pretty decent prices for getting in right when you buy... get to look at what you get.. and no shipping cost. Just walk in with some paper, walk out with silver/gold

here are the prices http://www.goldsilversupply.com/current-prices

 

WOW $18.71 from $18.69 a few minutes before that

 

It's on its way back up!!! BUY! BUY! BUY!!!!

 

18.87 now. this is it. 50.00 by months end

 

Hmmm, sure smells like a dead cat....

 

At the top of CNBC's Squawk on the Street segment this morning, Jim Cramer cited a number of circumstances as contributing to the present continuing decline in precious metals pricing - lack of Indian/Chinese buying, margin calls, increased borrowing costs. He also noted that of the Wall St. financial firms, Goldman Sachs got it exactly right when they made the call to short gold at $1,500.

I'm thinking that the cautionary "catching a falling knife" analogy referenced above may well be coming into play, dampening casual demand for the physical product. However, recognizing when the precise bottom has been reached (so as to make a bulk purchase at that point) will be very tough, if not impossible.

 

Its always hard. From my perspective, I know its hard to buy something that you keep going down. BUT, from personal experience I know that trying to wait to see a bottom is usually a bad move. What usually happens is it hits a bottom and bounces up, well you think to yourself "its going back down so I will wait", but it never does go back down. Sometimes you have to force yourself to buy today even though you are very fearful it will be going down tomorrow. By doing so you at least dollar cost average into a relatively reasonable market.

Would it be wonderful if you knew exactly when the bottom was reached and you could casually buy a 1000 ounces of silver at the exact bottom? Sure would. I wish I could have known in 2009 exactly when stocks were going to bottom, and which stocks were going to bounce back up. I didn't know that, though, and every stock I bought either was cheaper before I bought it or went lower after I bought it. Did it make for the beginnings of an ulcer? You bet it did, but I wish I would have bought twice as much as I did manage to buy at that time.

So, never try to be "cute" and time a market. If you believe pm is not going down much further and will rebound strongly, (like I did stocks in 2009), then just start buying and do not sweat if it drops a little further. The difficulty, however, is determining if pm will not drop much further, or if it will rebound strongly. I cannot help with those decisions, just comment on timing.