How low will silver and gold go?

Now that silver and gold have dropped below their support numbers, are we going to see sub $18 silver and sub $1200 gold. When I originally posted the sub $20 post, a lot of people did not see this drop happening by years end. Is the economy really improved to the point that people have said goodbye to precious metals for this up and coming year? Love to see what every thinks.

 

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We will not drop to sub $18 by years end according to my crystal ball.

 

Can I borrow your crystal ball, I have some ponys I want to bet on lol

 

Be my guest

 

I believe part of the weakness of pm has been the deal with Iran and general easing of oil prices. In many ways pm is storable oil, since it takes a lot of oil to get it out of the ground. I see oil prices easing for a few years at least, which should give me time to acquire more pm.

Specific prices? I have no idea. I will warn everyone though the next time I buy a large gold coin. I bought one Sunday, so I am personally responsible for it dropping yesterday. I always have great timing like that.

 

It doesn't feel as though the economy is doing so much better that precious metal prices should be dropping like they are. I had read a head line at the beginning of the year that a large silver mine had been uncovered, so I assumed that would cause prices to drop.

I keep telling people though, just because the price is dropping dramatically doesn't mean you should stop buying! you were willing to pay $30 an ounce before, now that it's dropped you stop buying? it seems preposterous. Precious metals will always be worth something even if the dollar is not.

 

According to this we are at the value of production now. It can't drop too much lower, can it?
http://www.zerohedge.com/news/2013-12-02/gold-tumbles-towards-marginal-production-costs

 

This

 

One of my newsletters (which is long-term bullish on precious metals) thinks gold could go as low as $1100. But that's got to be about the bottom because at that price a lot of miners will just stop mining.

 

$14.88 silver

$944.33 gold.

We'll see if I'm correct.

 

I have also said that the lower oil prices would be a head wind for PM's. Demand for oil in the US has actually gone down.

The weakness over the last two days however, looks to be directly linked to the better than expected ISM data. There are at least some PM bulls that seem to want to turn a blind eye that the economy is improving, but that could make you wallet a little lighter. IMO there will be strong head winds for PM's for all of 2014.

 

The short answer is: nobody knows. Now, stop posting silly crap like this.

We could know every variable related to those things that could have an effect on PMs and still not know for certain the behavior of their prices. They will do what they will do, period.

Unless, of course, you just like to hear yourself speak.

Oh, I mean....hear yourself type.

 

It does not work like that. Because of sunk in costs, it is still advantgeous for mines to keep operating even when the product drops below "cost of production" In addition, even if all mining were stopped today, that does guarantee that gold wouldn't drop further. There is a huge amount of above ground gold that would be more than suffient suppy if the demand dropped below current levels. I would seriously consider cancelling your subscription to that news letter. The is no hard floor at $1100.

 

Yes it can, and when it does we will hear a multitude cries stating that this proves manipulation, but of course it does not. Over the long term, the price of a commodity should roughly follow the cost of production, but in the short term wild swings can and do happen both above and below the production cost.

Mike

 

I always found it funny how some "experts" in "pm manipulation" have never had any education in economics or accounting, have never worked in the industry or at the market institutions, yet VERY confidently can proclaim how various facts "prove" a vast conspiracy.

Its like a lot of things today. There is a surplus of facts, and a huge shortage of knowledge. Knowledge helps a person make sense of facts, to put them in perspective, to evaluate them versus expected bahavior. The internet has given enough facts to anyone wishing to contruct any theory they wish, and those without any knowledge many times will blindly follow.

This is more of a general warning to everyone. Facts are meaningless, worthless tidbits of trivia short of knowledge. Its 36 degrees in Minneapolis today. What does that tell you? Is it warm or cold for the day? Without KNOWLEDGE of what miserable weather Minnesota experiences, there is simply no way to know WHAT the fact that it is 36 today means, right? Another example would be a salesman on HSN stating a true fact that "only 100,000 of these were minted". So, does this make it a valuable coin? Without KNOWLEDGE of the coin series, the date, what other mintages are, what good does only knowing "100,000 mintage" do you?

Same with people pulling crap off the internet like "X number of contracts were sold today" or "margins requirements did X". What does that mean to an average guy? There is no KNOWLEDGE, no structure into place this tidbit and if it is simply normal or unusual. Same with many "pm gurus". They also have no knowledge of what is normal, so trumpet seemingly "unusual facts" like they mean something, without KNOWING if they do or not.

Sorry to rant, just a frustration of mine.

 

Don't you think this is a little harsh TH? I mean, this section is called "Bullion Investing" not "World bullion coins", so as a function of investing I would think people trying to make intelligent, educated guesses as to when they want to purchase might be prudent, no?

I understand how we have many, many of these threads. I simply believe we will ALWAYS have "what is your price prediction" types of threads in this section. Now, anyone making investment decision ONLY based upon an internet chat board's opinion should have their head examines, maybe they might pick up a few ideas to check out on their own from such a discussion.

 

I think the name of this forum is how low will silver and gold go, so I think the idea is to talk about that. Of course nobody knows. If we knew we could buy with absolute certainty. When I buy silver I am never sure which way it will go. I call it the poor man's hedge fund. You are hedged against a few things that could happen, but if the price keeps going down it's hard to keep the faith.

 

Silver and gold are already much lower than I predicted at the beginning of the year...and I'm a PM bear in this rising interest rate environment.

According to the Bureau of Labor Statistics inflation calculator, Silver is fairly valued at $11/Oz. Will it drop that low? Can it go lower? ...perhaps, if the economy continues to improve.

 

Using what price and starting period sir? When I calculate from about 1925 I get around $20.

 

Once a mine is opened. The land has been purchased, enviromental impact studies completed, variances obtained, infrastucture has been built, equipment has been purchased and etc. - profitability becomes primarily a 3rd party concern. As long as that mine can cover its variable cost and provide some contribution in returning the sunk cost above - it will remain open.

Closing a mine carries significant future risks to the ability of ever being open again. It would require new impact studies, obtaining new variances and etc. more than likely subject to additional and more strigent rules and regulations. Possibly making re-opening the mine cost prohibative or maybe impossible.