Is silver over valued??

If silver is so rare and valuable why do the U.S. silver mines need to lobby the U.S mint to only use their silver in the Silver Eagles and other bullion coins? Shouldn't they be able to unload it on their own?

 

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Well, they did that when silver was much lower than it is now. Also, since they succeeded they created a little extra demand specifically for their silver, which helps them market their product easier when silver isn't as "hot". The real question is why does the US public allow them to manipulate government purchases like that?

 

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Gold closed today at $1,246.60 and silver closed at $19.85. That is a Gold/Silver ratio of 62.8. Historically, the ratio was between 15 and 16 which roughly reflected the fact that silver is 17.5 times more plentiful than gold. Since 1970 the ratio has been anywhere from 20.36 (1970) to 89.31 (1991).

With a Gold/Silver ratio of 62.8 you will have to decide if a) gold is overpriced or b) silver is underpriced.

 

One thing to keep in mind about silver is that it has industrial uses along with being a PM. If its value was solely monetary like its golden big brother then it wouldn't be worth near as much as it is because the market would be flooded with it. Silver is often a by product of lead mining so there is really quite a bit of it all things considered.

 

No one yet has said it was under valued . well that is what i think . its used more than gold in everyday life.
so i am going to go with NO

 

When you consider that 100 years ago, pretty much every country in the world struck millions of actual silver coins for general circulation (as opposed to mere hundreds of thousands as bullion/collector products today), and that its use in film photography has declined since the rise of digital photography, I'm not surprised its value in relation to gold has declined. The relative demand for it should be much lower than what it was. Historically, the gold to silver ration was about 1:16, it is now 1:62. I don't know if that ratio is the right one, but it doesn't seem that outrageous considering the importance of silver as a commodity is a lot less than what it used to be. Gold on the other hand, has always been seen as a store of wealth, has tax advantages in the EU (world's largest economy), and is in HUGE demand in Asia, especially India, which is the world's biggest gold market. This will probably continue in the long term as India prospers and drags itself out of the third world...

 

i think option b... but i've been known to be wrong before.

 

To understand mankind`s fascination with gold and silver We have to go back to roughly 1450 BC. Whether they were first used for coinage, weapons, jewelry, building decor, etc, We have their allure in Our genes. I said it on another thread that the Bible even warns Us about their allure. Silver has the highest sheen of any metal, and gold supposedly "disperses" heat better than any metal.(which is why some engine compartments in exotic cars are gold plated.....That said, I think that with China, India, and even Brazil getting more and more into manufacturing electronics We will see the industrial usage of silver drive it up well past the $20 mark.

More and more I keep hearing about people dumping their stocks and going with gold and silver. They`re coming to the realization that manufacturing is not coming back to the U.S. and that both parties have and will continue to sell Us out.
Personally I see silver as a steal when compared to gold. I also think both metals have not even come close to hitting their ceiling.

 

I'm pretty sure that when you say "overvalued", that you really mean "overpriced." And this leads me to question, shouldn't you be looking at just the opposite? That is, is a Federal Reserve Note overpriced?

But, if you want to consider "value" then think about this situation: what a $100 bill will buy today will not buy the same amount or quality of goods in 1 year. But consider silver instead... will one ounce be comparable to that same good in one year? Most likely, one ounce of silver will either be equal to or worth more than that same good in one year. Therefore, silver is "undervalued" today, no matter what "price" is associated with it.

 

I always seem to hear the no more use in photography thing, but now we use it in just about every form of electronics on the market, plus many different medical uses because of it's antibacterial properties. I just got issued a 50 gram jar of cream from the doc that says it is 1% silver, which isn't much, but the doc told me it is the best new thing on the market as silver apparently has tremendous antibacterial properties, maybe we need to convince the gov. that all money should be made from silver to help stop the spreading of diseases,lol (yeah right). just saying that as we lose or get rid of one use for something, that same thing may find 100 other uses that will keep it in demand.

 

I think silver is still undervalued in relation to the U. S. dollar. The key part of the last sentence is "in relation to the US dollar". Silver closed today at $19.85/oz. If your time horizon for exchanging your silver back into US dollars is five years or more, I would venture to say that under the current fiscal policies of our government, you stand to make at least that exchange rate, and probably significantly more, five years down the road. We are bound to see inflation in this country over the next decade; as the US continues to increase the supply of dollars, their value (purchasing power) will decrease. ECON 101.

The real question is; "Will inflation erode the value of a dollar more quickly than it will erode the value of an ounce of silver?" My guess is yes. IMO, the longer you hold silver, the more you stack the odds in your favor.

 

Is Silver over valued? Maybe.
Is Silver under valued? Maybe.
No one really knows what will happen in the future, BUT here is an interesting article:
http://www.minyanville.com/business...15?camp=syndication&medium=portals&from=yahoo

 

The real question is; "Will inflation erode the value of a dollar more quickly than it will erode the value of an ounce of silver?" My guess is yes.

Your guess is as clear as crystal. Don`t let anyone convince You otherwise.....Our dollar has no reason to rebound. Once oil is no longer traded on the dollar We will see it`s ultimate demise. Maybe the Amero, maybe a one world currency. (which the U.N. is already pushing for) The metals have outlasted EVERY single civilization, and will outlast Ours as well.

 

well said :thumb: i read a article today that copper and silver could be worth more than gold. one does not know the future of these pm but goes to show that only those that is used in daily life will do well . just my op i could be all :foot-mouth:

 

Everybody can decide for themselves whether they think silver is under or over-valued. I happen to think it is undervalued.

-silver is consumed, gold is not
-there are more ounces of gold in above-ground storage than silver
-industrial usage is growing, even including the impact of photography
-it is almost impossible to take a new silver deposit from greenfields to production unless the deposit is very rich
-we don't know what the correct price for silver is because of the legality of unlimited naked short selling permitted in the futures market [but this is about to change], and the ability of market makers to sell the same ounce to several customers [legally]

I recall discussions on Cointalk with opinions expressed that silver would NEVER exceed $10. My personal opinion is that the silver price will hit an all-time new high before the present bull market ends.

 

I recall discussions on Cointalk with opinions expressed that silver would NEVER exceed $10.

Haha.....I wish I could have taken part in some of those. I remember roughly 10 years ago discussing with some people about America`s economy, and the fact that the manufacturing was going to continue to leave and never come back....."Not true" they said, "the government would tax the imports to even it out" they said.....they sounded much like the same types that You speak of.

 

I am really not sure about all time highs for a while Cloud. Remember the all time high was reached via some rich people trying to corner the market. It wasn't free trading that caused silver to get to $52. I could be wrong about silver being a little rich at $20, but above $30 would really take some catastrophe or disaster coupled with economic information to be reached I think.

You could be right, it really would be interesting times we would live in, just like the old Chinese curse...

 

Most people in 1999 would have thought it would take some catastrophe or disaster for gold to hit $1000 or for silver to hit $15.

 

I don't think most. The price today is about inflation adjusted for history. It was just abnormally low in the 90's.